I am glad to have the opportunity of continuing this important debate.
Financial Resolutions 2003. - Financial Resolution No. 5: General (Resumed).
Debate resumed on the following motion:
THAT it is expedient to amend the law relating to inland revenue (including value-added tax and excise) and to make further provision in connection with finance.
–(Minister for Agriculture and Food).
The Deputy should speak for Dublin. He should save the airport.
I would like to deliver a message to the people of Portlaoise, Macroom, Enniscorthy, Carlow, Killarney, Mallow, Cavan, Clonakilty, Carrick-on-Shannon, Knock—
No disrespect to the Deputy, but I live in Dublin south-central.
—Furbo, Clifden, Gweedore, Newbridge, Curragh, Portarlington, Shannon, Thomastown—
It is a milk rás.
—Arklow, Waterford, Wexford, Tullamore, Kilrush, Listowel, Newcastle West, Trim, Kanturk, Claremorris, Youghal, Dungarvan, Limerick, Tipperary, Roscrea, Thurles, Longford, Navan, Drogheda, Buncrana, Donegal, Sligo, Monaghan, Carrickmacross, Mitchelstown, Shannon, Ballinasloe and Loughrea.
Two places the Deputy was never in, I am sure.
I offer my apologies to anybody I left out of that list.
Birr.
The message I want to give on behalf of Fine Gael is that civil servants are not wanted in these towns. We now have an official Fine Gael policy—
We have a different message.
—against decentralisation of 10,000 civil servants from Dublin. The reason I strongly support this budget is that I understand the dynamics of Dublin.
That is a revelation.
I was Lord Mayor of this city between 2001 and 2002. The population of Dublin at present is 1.1 million. In 2030 it will be 1.6 million or 1.7 million. That is an increase of approximately 60% over the next 20 years. Anybody who feels this is sustainable and that we will be able to function is living in cloud cuckoo land. The Fianna Fáil Government since 1997 has invested hundreds of millions of euro in Dublin: the Luas project, the Dublin Port tunnel and the Ringsend sewage treatment plant, which on its own accounts for about €210 million.
The tunnel has to be expanded.
Deputy Durkan will allow Deputy Mulcahy to speak without interruption.
Is Deputy Durkan going to the opening of the Kildare bypass on Monday?
Wheel in Frankie Fahey.
Several billion euro have been invested in Dublin over the last few years. Anyone who says this Government has not been committed to proper investment in Dublin simply does not know what he or she is talking about. I am surprised that Fine Gael Deputies in particular have not done their homework. Anybody who knows anything about spatial planning realises that Ireland has the highest concentration of population in its capital of any country in Europe, except Luxembourg. These are some of the percentages: Belgium – Brussels 9.5%; Germany – Berlin 4.1%; Italy – Rome 4.3%; France – Paris 16.2%; Portugal – Lisbon 18.7%; Finland – Helsinki 10.8%; and Ireland – Dublin 28.7%. That is completely unsustainable from a planning point of view.
Did the Deputy check the populations of these countries?
Deputy Durkan will have an opportunity to contribute to the debate.
If people took the trouble to read the statistics published by the Central Statistics Office, they would understand that the population of Dublin is due to increase by 60%. Fine Gael is now in favour of a 60% increase in house prices. Fine Gael is in favour of 60% more traffic congestion in our city. It is a sad day for Ireland when the major Opposition party cannot do its research and comes out against a rational plan for decongesting Dublin and supporting balanced economic development throughout the country.
I am not surprised because I took the trouble to read the speeches of Deputy Richard Bruton and Deputy Burton on the previous budget. If anyone takes the trouble to read the speeches from last year, they will see that both of them criticised two aspects on which they were entirely silent following this year's budget. Deputy Bruton criticised the special savings incentive account scheme and the pension schemes. He stated:
How can the Minister for Finance ask the lowest paid in our community to accept that there will be no increase in their tax credits . . . while at the same time he is going to protect those who can afford to save in these schemes? Where is the justice or equity in that?
There was no reference this year to the SSIA scheme. He went on to criticise the national pension reserve fund as follows:
It is not justice or equity that is inspiring this but pride and ego. That is where this Government has gone so badly wrong. There is €1,300 million being stashed in the Minister for Finance's great pension fund. I agree with the principle of the pension fund. I am glad it was put in place. I do not agree, however, that at a time of serious bottlenecks in our infrastructure we should be using €1,300 million of taxpayer's money, most of it borrowed this year, in order to invest in the stock exchanges of New York and Japan.
The fact is that the stock exchanges of New York and Japan will deliver large increases to the capital value of the national pension reserve fund for the next few years. The stock markets are recovering and the value of that pension fund will increase significantly over the next few years.
Last year Deputy Burton also criticised the SSIA and the pension fund by stating:
He cuts investment and insists on shovelling money into a pension fund, which will not be invested in the country's infrastructure and which is losing money hand over fist on international stock markets.
In her speech this year there was no reference to the national pension reserve fund because she knows that the value of the pension fund will increase enormously over the next few years. She is embarrassed by what she said one year ago. I predict the fund will grow by 10%, 20% or even 30% over the next few years, while at the same time the Government has kept its promise of investing in this country. It is investing €5.5 billion a year in capital expenditure, which is a record across the EU.
I do not understand the Opposition's position in this regard. Does it oppose benchmarking and decentralisation? If so, what exactly does it support? I was dismayed by the speeches made by Deputy Richard Bruton and Deputy Burton. They had nothing positive to say. There were no words of congratulations for the Minister for Finance who in recent years has steadily brought us down to one of the lowest tax economies in Europe, which is essential. Ireland will be competing against the ten new countries joining the European Union. These ten countries, which have very low cost bases and many of which have very low tax bases, will compete with us job for job. If we do not have a low tax base, we will haemorrhage jobs to eastern Europe.
That is not to suggest that there is room for complacency. We must reduce our cost base. I do not understand the logic in the Opposition's point of view.
I wish to share my time with Deputy Connaughton. Last Wednesday when sitting here listening to the Minister, Deputy McCreevy, deliver his budget, I wondered when he would get to its main point. The Fine Gael spokesperson for rural development is sitting beside me and will speak for himself. Fine Gael is certainly in favour of decentralisation.
That is not what Deputy Gay Mitchell said.
Deputy Enright, without interruption.
Perhaps Deputy Mitchell is representing his constituency. Deputy Mulcahy appears to want to represent everyone's constituency except his own, which is his choice.
What is the party policy?
It is something which will be reflected in time. I welcome decentralisation. However, I would like to clarify a few issues. I assume the Government's cap on employment in the public service still stands, which should be clarified for people. Laoighis-Offaly is getting 965 jobs, which I welcome, as I am sure do my constituency colleagues. However, we are not getting new jobs in the sense of replacement industry for the jobs lost. It is great for the people of Birr, Portarlington, Portlaoise, Edenderry and Tullamore that public servants will come to live in the constituency. It will benefit the towns and provide more business for shops, restaurants, etc. but it will not replace the jobs that have been lost. It will not replace the 400 jobs lost in Leoni in Birr, the hundreds of jobs lost in Flextronics and Daiber in Tullamore or the jobs lost in Powerscreen in Kilbeggan.
Hundreds of foreign workers are employed in Offaly.
The Minister of State should realise that there is a great deal of unemployment in Offaly. Birr is one of just three towns in the country which has had consistently increasing live register figures for the past five or six years.
That is—
Deputy Enright, without interruption.
It is an important point to realise. While I welcome the benefits of decentralisation, it will not replace the jobs lost. The Government is not off the hook because of this announcement. It must be accepted that we still need replacement industries for those lost. I accept it is a nice position for the Government, but the reality is clear for the people who will not benefit from this measure in the sense that it will not create employment for them. The announcement on Wednesday was not relevant to the budget. It was a smokescreen to deflect from the proposals in the budget, a bit like the smokescreen of the smoking ban to divert attention from the conditions in many of our hospitals.
I would like to refer to the budget from an education perspective. These are some of the real issues we must accept. The Estimates announced last month indicated there would not be good news in the budget for education, which was confirmed last Wednesday. The Ministers for Finance and Education and Science have tried hard to create a myth that the budget will work for education. It will become clear that this is not the case because 2004 will produce real cutbacks. This is at a time when education services have already been cut back. If one examines the amount of money being spent on pay increases in the education sector, on the allocation to the institutional redress and child abuse boards and the demand-led schemes, current spending in the Department of Education and Science will have been reduced by €20 million for next year. I do not think there is any way of dressing that up and making it look better than it is. This will have a direct knock-on effect for everyone relying on the education system.
On Wednesday, the Minister announced an additional allocation of €30 million for the schools building programme. Given the appalling conditions in so many primary and post-primary schools, I welcome the allocation. However, it should be put in context and we should not clap ourselves on the back too quickly. Last year the Minister for Education and Science underspent on his capital allocation by more than €60 million. This was at a time when schools were crying out for grants for refurbishments and building extensions. There is no explanation why the money was not spent.
When attending the Committee on Education and Science yesterday, the Minister for Education and Science said that the money was or will be spent somewhere in his Department. That is not good enough. We are entitled to know why the money was not spent on the capital projects on which it should have been spent. Given the number of schools seeking building extensions, refurbishment and proper access for people with disabilities, I do not understand how the Minister could fail to spend €60 million.
More than 400 schools are on the school building programme, many of which have planning permission for their projects which are ready to proceed to tender, yet the Minister did not spend the money. There is no decent explanation for this. I do not believe that he can transfer willy-nilly €60 million to some other section, as he pretends. We need an explanation as to where exactly is that €60 million.
Science facilities in many of our post-primary schools are sub-standard or non-existent. We have witnessed the difficulties faced by the Minister for Education and Science when he tried to introduce a new junior certificate science syllabus. We are told that only 12 of our post-primary schools have no science facilities. The reality is far different. I have seen schools that are considered to have science laboratories but they are so antiquated that they cannot be used. I was in one school where it is hoped the Health and Safety Authority will not come knocking on its door because, if it did, its science laboratory would be closed immediately because of its dangerous state. Yet that is considered to be a laboratory. I do not understand how the Minister can justify that. Given that the Minister for Education and Science knew there would be opposition to introducing the new junior certificate science syllabus because of the existing poor facilities, I do not understand how he can leave €60 million unspent from capital programme. The Minister said it was €30 million in the budget and €23 million in the Estimates, which amounts to €53 million. Even if he is recycling the money, as it seems he is, that still leaves an extra €7 million unaccounted for by the Minister.
This budget will cause severe hardship for children and their families, particularly those waiting for psychological assessments. These assessments are critical. They provide valuable assistance to parents and teachers in discovering the best way to teach a child who may have a specific learning requirement. The appropriate intervention, at an appropriate time and as early as possible, can have a positive effect on children for the rest of their education and for their lives. If children are assessed prior to the age of six or seven they can participate fully in the education system with fewer special requirements in the long-term.
The provision for the National Educational Psychological Service in the Estimates has effectively been cut. We have seen an increase of 1% in the allocation to the National Education Psychological Service. This will not meet the existing demands of NEPS, not to mention expanding and rolling out the scheme. As well as its current workload, the Education for Persons with Disabilities Bill which is being debated places huge demands on the National Educational Psychological Service. It envisages a far greater roll-out into the education system and more NEPS staff will be required to do what is required under the Bill. We are proposing to pass legislation when we are cutting the funding from the agency that is supposed to provide this service. It does not make any sense. I do not believe NEPS will be able to meet the challenge.
Even in parts of the country where the highest number of its psychologists are deployed, more than one school in ten is not covered by NEPS. The figures for the mid-west, north-west and the midlands are truly appalling. In the mid-west region 71% of schools are not covered, in the north-west region 57% of schools are not covered and in the midlands region 44% of schools are not covered. The figures for other parts of the country are similarly worrying.
In his recent report, the Comptroller and Auditor General revealed that since 2002 the Department has spent more than €2 million funding private psychological assessments because its own service has not been rolled out as efficiently and comprehensively as it should have been. In the absence of the NEPS in one's locality, it is right and proper that children are allowed get a private assessment but it does not make sense to continue to do it in this way. If the service was rolled out properly and the money put into a fully fledged national service there would no need to spend this amount on private assessments. Unfortunately neither the NEPS system nor the provision of private assessments reach all the children in need of these service. This is deeply worrying. In recent months a number of families in my constituency have spent €1,200 each to have their children assessed because of the inadequacy of the service provided by the Department of Education and Science. Many of these families have borrowed to meet this expense. For children waiting for an assessment from NEPS the message from the budget is clear, "Hold on and keep waiting and we might get around to you in a year or two".
I wish also to focus specifically on the National Educational Welfare Board. A year and a half after its establishment the board is nowhere near to meeting its targets for the recruitment of education and welfare officers. As with NEPS, huge parts of the country have no access to the National Educational Welfare Board. The announcement earlier in the week of an expansion of the service is still seriously short of what is required. The number of education and welfare officers employed to date is far short of the target sought by the National Educational Welfare Board. The lack of funding provided by the Government has created this situation.
Prior to the establishment of the board, schools could report any prolonged student absences to the Garda Síochána but since last year the Garda has no statutory entitlement to any function in this area. This is a shift in emphasis which I welcome. It was not appropriate for the Garda to be involved but there was no other system in place at the time. It is away from prosecution from forcing children into schools and is a more holistic approach looking at the reasons behind a child's absence from school. The chronic shortfall in officers means the Government has not provided any alternative form of assistance to schools with these problems. The Garda Síochána is not entitled to be involved, yet the officers of the National Educational Welfare Board are not in place.
It is unacceptable, despite the Minister's attempt to create the impression of a huge improvement, that some counties, including Laois and Offaly which I represent, are left without any dedicated welfare officer. Some 73 are employed throughout the country. yet those two counties do not have one between them, not to mention one each. The increase of 1% for the National Educational Welfare Board in the Estimates will not even be in line with inflation. The board wanted to recruit its officers in three phases to roll out a nationwide service. However, the allocation to the board in the Estimates will not allow it complete the first phase. The Minister is deliberately ignoring the fact that the National Educational Welfare Board has a statutory duty to carry out specific functions, a duty it cannot fulfil without the proper provision of funding by the Minister.
All the long-term positives for individuals and society that arise from tackling early school leaving and drop-out rates are being ignored by a Government that cannot see a bigger picture. I fully accept the Minister's point that we do not need or want a duplication of services. That is a waste of money. I do not believe the National Educational Welfare Board is trying to duplicate its services. At present it is barely able to react in basic way and in some places it is not reacting at all. Its function is not just to be reactive but to offer positive answers and ways of addressing drop-out rates rather than the heavy-handed forcing of people into a school situation.
The budget is a sharp blow also to the third level sector. Our universities and third level colleges have been through a period of uncertainty and confusion. Last year the planned release of vital investment to build and equip laboratories and scientific research facilities was put on hold, even though it was a stated objective of the Government to ensure Ireland developed a world class research capability. I welcome the fact that this hold has been removed. We have to plan for this sector in a more definite way. Research and attracting researchers from abroad cannot work if we put it on a stop-go. They have to know that if they come to Ireland they will be able to continue to carry out their research here.
This year, it was the turn of capital programmes in the universities and institutes of technology to suffer savage cutbacks. There was a reduction of 47% in building grants and capital costs at the institutes of technology, and a 45% reduction in the same area for universities. How does this square with the commitment in the Fianna Fáil-Progressive Democrats programme for Government to support advanced research in the physical renewal of third level campuses? It is not good enough to say it cannot continue to apply for new buildings and expect them to be funded. It is only a year and a half since the programme for Government was drawn up. Our campuses have not changed or improved dramatically since that time. Did the Government believe what it negotiated then? Why include something in a programme for Government if there is no intention of doing anything about it? It appears to me that it was nothing more than a token nod to our universities and institutes of technology. Rather than a real attempt by Government to foster and assist in the development of a dynamic, forward looking education sector with well-developed research facilities, capable of attracting people from all over the world, we have taken out the scissors and cut.
Already we are hearing about university libraries closing earlier. One college is taking an extended Christmas break to save on heating and lighting bills. That is not acceptable. If this is what the budget means for the third level sector we have to be worried about the long-term damage this may do to third level education in Ireland, the third level facilities being curtailed, the consequences for the students of today and tomorrow and Ireland's reputation as a knowledge-based economy. After the last general election third level students had to cope with a 69% increase in college registration fees. Those fees have increased again by €80 to €750 per annum. The idea of free education is one that does not hold much sway on the other side of the House.
I wish to refer to the effect of the budget on those involved in youth work nationally. I met representatives of the National Youth Council on Wednesday evening who were a very disappointed group. The importance of youth work programmes and other similar initiatives in the non-formal education sector has been overlooked by the Department of Education and Science. Youth work will receive very small increases in funding in 2004, far less than the organisations involved hoped for. The National Youth Council said the budget bypasses young people and raises serious questions about the Government's commitment to them. The Government has failed to recognise the benefits that derive from youth work programmes. The Minister for Justice, Equality and Law Reform would not require so much money for his budget if more was given to the Department of Education and Science.
Were it not for decentralisation, this would have been a non-budget. There was nothing to talk about. All the ills that existed previously still exist.
I spent a lifetime seeking decentralisation of Departments and other facilities. As far as this change goes, I welcome it. There is no reason Departments will not work in these areas. There might be some difficulties at policy level but they can be overcome. We are led to believe that the thousands of people who would like to live and work in their own areas will be facilitated.
I do not know, however, which Minister will be handling the programme. The Minister of State at the Department of Finance takes up the front page of half of the national daily newspapers to congratulate himself and I do not know what the Minister for the Environment, Heritage and Local Government is at now. There seems to have been a change of policy because the decentralisation of jobs will be arranged in an extraordinarily uneven manner. When speaking on the national spatial strategy, the Minister for the Environment, Heritage and Local Government gave us a lesson on sustainability. We were told that unless there were sustainable hubs and gateways, the focus for future development would be lost. He said that we need a counterbalance to Dublin and that unless the centres are sustainable economically and socially, Dublin's problems will continue to get worse.
For four years the Minister for Finance would announce from the side of his mouth at various elections that there would be decentralisation. One year followed another but all of a sudden we get the message for 2004. The fact that 11 June is the date for European and local elections never crossed the Minister's mind.
The Deputy's colleague was complaining last week in the local newspapers that decentralisation had been put on the long finger.
When the Minister of State goes around the doors canvassing in June, the people will have plenty of questions for him.
I am looking forward to it.
They will tell him that they will wait in judgment on decentralisation because many of them will not see it for five years, not even until after the next general election. They will have questions to ask of the Minister for Justice, Equality and Law Reform as well.
He never leaves Dublin.
They will ask where the 2,000 gardaí went and why schools that were promised were not built. The Minister of State should make sure he has answers because those promises require finance and hard decisions that he cannot make.
Many people in Dublin seem to think Lucan is in County Mayo, that is the culture. Between Fianna Fáil, the Progressive Democrats and the Minister for Finance, Departments will move out of Dublin but not too far to the west. Knock got a Department and I support that. The Minister for Arts, Sport and Tourism managed to decentralise his Department to Killarney. Everything else will be in the midlands or closer to Dublin. The Government took this decision on a political basis and, like the Milk Rás, it went everywhere. There is nothing wrong with that for those who benefit but I am sorry the Minister for the Environment, Heritage and Local Government is not here because Tom takes responsibility for everything in the midlands.
The Deputy must refer to Ministers as "Minister".
I apologise, the Minister of State at the Department of Finance, Thomas Parlon, Esquire.
I will read a list similar to the one Deputy Mulcahy read to give the House an idea of where the decentralised jobs went. At the top of the list, County Cork came out with 930 jobs. Well done to Cork.
It is the largest county.
The next largest county is Galway but it came 21st on the list in terms of the number of jobs decentralised.
We would have given more but Deputy Gay Mitchell objected.
County Kildare comes next. It received 750 jobs. That is a long way from Dublin, a significant decentralisation. County Laois got 510 jobs, County Clare got 450, County Meath got 370, County Tipperary got 480, County Waterford got 500 and County Wexford got 540. East County Galway got 150 jobs. Ballinasloe got 110. Why do I mention Ballinasloe? I do so because the leader of the Progressive Democrats is from just outside the town and she spent the last ten years telling the people there that she will solve their problems. No other town in Ireland has been ravaged by unemployment like Ballinasloe. We lost 1,100 jobs in five years and we got 110 decentralised jobs out of 10,000.
How many people work in Portiuncula Hospital?
How many work in the mental hospital that is almost closed? How many work in AT Cross? How many work in Dubarry on a three-day week? Every single one was cleared out.
They can get good jobs in Galway city.
That is the Minister of State's answer, send them 50 miles to Galway city.
They will be working in their own county.
The Minister of State must want to do on a local basis what he did in the national newspapers this morning. His comments will appear on the front pages of the Galway newspapers tomorrow –"Send them to Galway, says Tom Parlon". Send them anywhere, that is his answer.
What is the Minister of State, Deputy Treacy, doing? Is anyone listening to him? What about the Minister for Community, Rural and Gaeltacht Affairs? What about the Minister of State at the Department of Enterprise, Trade and Employment? County Galway got next to nothing. Why would it, when we consider the antics on the plinth last week? Clifden got a few jobs and Na Forbacha got five or six.
Are those towns not in County Galway? How many Galways are there?
Those are the figures, the county is 21st on the list. There is a turf war going on in west Galway but it is having a huge effect on the lives of everyone in the county. The Minister of State, Deputy Fahey, appeared on the plinth to argue for the community employment schemes, something we would all back because the ethos of the Government is far removed from the people who work in the schemes and from the communities that use their services. On the other hand, the Minister for Community, Rural and Gaeltacht Affairs, Deputy Éamon Ó Cuív, in the same constituency would have to do something to help Deputy Fahey. In one day we heard about the savage cuts in the CE scheme and a new scheme born, namely, the social employment scheme for farmers who are on farm assist.
It is all a scheme.
It is a scam.
A scam, yes.
Are we not speaking about the same people? One who would qualify for a CE scheme is also likely to qualify for Deputy Ó Cuív's scheme. The Government cut the CE scheme savagely four years ago. Deputy Parlon, Minister of State at the Department of Finance, should understand this because his Minister capped it so one could not work more than three successive years on a FÁS scheme. That is when the damage was done, not today or in the last election or the last budget. The Progressive Democrats are trying to run the schemes down and they are extremely good at it. When their candidates call to the houses in advance of the elections next June the people in every halfparish, parish and county will ask them, "Why did you not give us an opportunity to work for the community?"
I am looking forward to next June. I can hold my head high.
Allow Deputy Connaughton speak without interruption.
The Progressive Democrats might not have many councillors by the time they are finished. They have few enough now and they will have very few then.
It is easy to talk.
There might be potential for the leadership there.
I hope people will understand what happened in this House on budget day and last week concerning the community employment scheme. The Government had no intention of doing anything about it and has none for the future. It is as well for it to be realistic and honest, and say so.
I heard much talk about the benefits of decentralisation and I agree with the policy. How is it that under the national development plan last year, the spending on roads in and out of Dublin was 50% more than was programmed for, while 47% less was spent in the BMW area? That is a fact. What type of Government can oversee that sort of spending? If it will not change its ethos and approach on planning for the future of the regions it should at least ring-fence whatever sum it decides to spend in a particular way in a region. The Government did not do so. Its behaviour on the roads projects in the BMW region is a scandal. The Minister for Transport tried to tell me last week that somehow much of the money spent on Heuston Station in Dublin, of which we all approve, was good for the BMW region. It is difficult to understand how that could be.
There is no point in having a train from Galway if there is no station to take it.
If that is the case what is spent in Brussels is good for us.
The Deputy has one minute left.
I am sorry I do not have 21 minutes.
We are disappointed too.
I know.
There is a lot more to be said.
Why is the Government trying to put the boot into every young person trying to build or buy a house? What does it have against young people? What has it decided to do over two years?
That is a good question.
The people who made the country.
That is right, the people who made it and will make it and they will be lying in the long grass for Progressive Democrats candidates when they appear. The first-time buyer's grant is gone, now the development contributions in several counties amount to between €5,000 and €12,000. That, added to the increase in house prices since last year, obliges more young people to pay at least €15,000 or €16,000 extra because of the Government's actions.
It is €90,00 in taxes.
There will be 60,000 houses built.
At what cost?
Built for the landlords.
The well-heeled members of the Progressive Democrats might be able to pay for them but the ordinary people cannot do so. If the only thing the Government has to offer next June is decentralisation there will be few Progressive Democrats councillors re-elected.
There will be 60,000 houses.
They should tell people with no homes that there will be 60,000 houses.
With the Ceann Comhairle's permission, I intend to share time with Deputies Parlon and Jacob.
The Minister will share time with Deputies Parlon and Jacob.
I am surprised. I did not think Deputy Parlon had that much to say.
It is a pleasure to be here this morning in the wake of a very successful budget. The ritual hand-wringing and loud breast-beating from the Opposition has been more than usually empty and vacuous on this occasion.
So was the budget. The Minister is the specialist in that area.
We will hear a sermon now.
On taxation particularly, the Opposition seems to speak from a position of abject political and moral bankruptcy. Far from occupying the moral high ground it is lying in wait on the moral equivalent of the grassy knoll.
That is a habitat well-known to the Minister.
It has always believed in high tax, high spend and high unemployment policies, and still does.
The Minister should not leave out value for money.
We need to pinch ourselves sometimes to ensure that its published statements are not part of some political hallucination or nightmare.
Like climbing a pole.
In the last seven years Ireland has undergone an unprecedented revolution in taxation and employment creation. Hundreds of thousands of people have found employment in a dynamic fast-growing economy that has weathered the storm of international recession. Far from being a society of mass unemployment and emigration, ours has become a society of low unemployment and substantial immigration.
They want to go again.
While the tax strategy is not the only ingredient in the recipe for economic success, it is one of its most important components. Each part of the strategy, which has underpinned the dramatic change for the better in terms of substantive social justice, has been opposed, derided and fought tooth and nail by the erstwhile rainbow coalition and by most of the hard left, including some members of the Technical Group, Sinn Féin and the Green Party. The Opposition parties have all opposed and voted against every step in the reduction of income tax to 20% and 42% which contrasts with the regime of 35% and up to 68% when they were in office during periods of mass unemployment and emigration.
There were different standards.
They have all opposed the halving of capital gains tax from 40% to 20% even though the yield rose by 500%.
We opposed its abolition.
I do not know why they want to do that. Do they want to reduce the yield to its former levels? Are they so ideologically driven that they are blind to the consequences for the Exchequer?
What does the Minister call development charges? They amount to €13,000 for a house in Laois.
They are stealth taxes.
Yes, stealth taxes.
Some but not all of the Opposition parties – I excuse the Labour Party on this point – are opposed to the 12.5% corporation tax. The Green Party and Sinn Féin are strongly opposed to that. They do not want foreign direct investment on the scale we have had in the past. All of the left-wing Deputies have advocated raising our tax levels to the European norm which would decimate our employment and investment levels. The leader of the Labour Party, Deputy Rabbitte, has also revived the Labour Party's proposal for a wealth tax on property. Neither the media nor his potential allies in the Fine Gael Party have asked him what exactly he is talking about.
Coalition allies.
Tell that to the people who have to pay development charges. They are a penalty tax on houses.
They are a penalty.
The Government is making sure that those who do not have houses will never have them.
The Minister should wake up.
The Labour Party is on record in this House as stating it will reintroduce a wealth tax on property. It is time someone asked it what form this tax will take.
The Minister put a wealth tax on the homeless. Was that the policy of the Progressive Democrats?
The Minister, without interruption.
I am interested to note that Deputy Durkan in his excited interventions is still not coming off the fence as to whether he will support the Labour Party's demands for a wealth tax.
That would go down well in Kildare.
The Minister would know all about the wealth. He has been there long enough.
The Green Party and Sinn Féin Members called last week for the raising of the top rate of tax from 42% to 50%. All this shows is that the real choice is between a successful economic policy which has been adopted in the face of an Opposition which is in effect a shattered mosaic of ideological misfits—
The Minister is describing his own condition.
—and a disastrous high tax, high spend, high unemployment strategy based on a willingness to revert to the failed policies of the past which beggared and stunted this country in the pursuit of ideology and office.
We should remind ourselves of a few little items which appear in the budget tables. People are inclined to ignore the contents of the budget tables because the news is too good.
Yes.
In 1997 a single worker earning €12,000 had 18% of his or her earnings confiscated in rainbow coalition income tax.
The year 1997 was in a different century.
This young man, Deputy English, was not born then.
The Deputies should listen.
This is not comparing like with like.
In 2003 such earnings attract no income tax at all. In 1997 a single worker earning €25,000 had 33% of his or her earnings confiscated in rainbow coalition income tax. In 2003, such earnings attract tax at the rate of 14.7%. In 1997 a couple with two children and one income of €20,000 paid 20.7% of their income in rainbow coalition tax.
People could buy a house.
That couple now pay 4.7% of their income in tax.
Some of the people who were paying those low rates now pay the high rates.
In 1997 a couple with two children and two incomes totalling €30,000 paid 22% of that total in rainbow coalition income tax. That couple now pay 6%.
A couple today cannot afford two children.
They had lives in 1997.
The Deputy ignores the major revolution in child benefit since 1997.
They can no longer afford to have children. They are not having children.
It is interesting to compare the equity in our tax system then and now. In the tax year 1997 the percentage of income tax which came from those earning incomes below the average industrial wage was 14%.
Child benefit is only 21 cent per day.
This year, 6% of income tax will come from those earning below the average industrial wage. I lay those facts before the House. This year's figures show real tax equity.
There is no greater agent of social justice or poverty fighter than a job. The Government has put another 400,000 people into the workplace.
That is the continuation of the book. The Minister should move to the economy proper.
We have moved from a society of mass unemployment to one where there is constant growth in employment. This coming year, in difficult international circumstances, 23,000 extra jobs will be created in this country. This is the achievement of a Government which has always understood one thing: there is no social justice without participating in the economic life of the country and that it is the failed policies of the left and the hard left in Ireland which led us to the situation of human set-aside.
That is what we have now. We have human set-aside.
Entire communities had 80% of their households without a bread winner. Some houses had third generation unemployment. These policies will never be revisited in Ireland.
The Deputies on the benches opposite will have no say in it.
The differences that have come about are substantial. The minimum wage has been introduced by the Government which will increased it by 10% next year.
Those people will lose their medical cards.
Those who were previously exploited by people who pretended to be socialist in office are now protected from being exploited at the lower end of the earnings ladder.
They are not on the ladder. Under this Government they have fallen off.
I understand fully why a speech of this nature is bound to evoke mere bluster and noise and hot air from people who, when confronted with the truth, can only shout and roar about it.
The speech is bluster. The Minister protests too much.
I made a speech on my first day in the House in reply to the budget presented by the then Minister for Finance, Ray MacSharry, in 1987. Having little or no time to prepare it, I listened carefully to what Mr. MacSharry said, and realised that a sea change had taken place in politics and that employment was now taking centre stage. I praised the then Minister for that. I said that, as long as I was in the House – although my presence here has been interrupted by the odd brush with democracy—
I wonder why.
—I said I would focus on one aspect.
The Minister would not get much praise from the Deputies opposite.
I would focus on what is the cornerstone of social justice, namely, the question of whether budgets were pro-jobs or anti-jobs.
What was the name of that book?
It is that philosophy which has transformed this country and has led to the huge sense of hope and confidence in Ireland.
There is hopelessness.
I am proud that this budget has focused on the weaker elements of society and that €600 million extra has been allocated to social welfare.
A large part of the population has been ignored and continues to be ignored.
I am proud that the tax burden on the lowest paid in society has been reduced and that the result will be that, this time next year when the Government produces the next budget, growth in employment and tax equity will have been consolidated.
The Minister should explain that to the homeless people.
I strongly support the budget.
What about the homeless?
In response to that, 60,000 houses have been built this year.
That is a joke.
They were built for the financial institutions. They were built for landlords. If they are allowed continue like that there will be no houses for people.
Allow the Minister to speak.
Last Wednesday, the Minister for Finance, Deputy McCreevy, presented the seventh budget for the Fianna Fáil-Progressive Democrats Government. The budget implements our strategy for economic and social progress in every county, especially the 25 outside Dublin. Despite Deputy Connaughton's concerns, every county was accommodated.
The budget has four key objectives: to encourage employment and growth in every region by means of decentralisation, to target tax reform and social support for people on lower incomes, to continue to manage our public finances well and to secure competitiveness by controlling inflation.
This is a strategic budget, one which will begin to transform the regions. It will be known for many years as the decentralisation budget. It follows the publication of the Government's national spatial strategy last year. It also follows a clear pledge given by the Tánaiste in April last year at the annual conference of the Progressive Democrats in Galway that this would be the year of action on decentralisation.
It is talk, not action.
As the Tánaiste said yesterday, politics is about getting things done. The budget proves it. It will happen.
Let us look at what has happened. The Minister of State should stop exaggerating. It is talk, not action. It is a lie.
Deputy Enright said last week that decentralisation had again been long-fingered by the Government.
That was the response I received to a parliamentary question from the Minister of Finance.
I will be delighted to see Deputy Enright correcting her statement in the local media next week.
I welcome it. It was certainly well-delivered.
It is a budget which delivers fairness in a new way, not alone in tax reform and social welfare but in where and how Government spending will be distributed across the country, even in Deputy Enright's county.
The Government has decided that eight Departments and the Office of Public Works will move their headquarters outside Dublin. As many as 10,000 civil and public servants will be involved. This radical change will offer substantial benefits for the communities to which the Departments will move, for the Departments themselves and for the staff who will be involved.
The Office of Public Works will work from a new office in Trim and will co-ordinate the implementation group to oversee the process. I am pleased that Mr. Phil Flynn has agreed to chair the group. He is an experienced negotiator and his impartiality and fairness are respected by all. He is joined by a team of people with a track record at top management and I am looking forward to working with them in this programme of strategic change for Ireland. I am sure they can also count on the support of this House in getting the job done.
This radical and reforming budget is only possible because our economic and social strategy has worked for people, for jobs and for our communities. Our main economic objective is to consolidate the gains that have been made in recent years and to build on our future prosperity. The significant gains made by Ireland in recent years are due in large part to the Government's sound budget policies. The proof of these policies is in our achievements. Over the course of the past decade a thriving economic climate has been created in Ireland and we have recorded one of the best economic performances in the world. Employment is up by 50% and about 600,000 more people are at work. From 1997 to 2002 Irish GDP grew by an average of 9% compared to an average of approximately 2.5% in the EU.
The fruits of this economic success have been put to good use. Taxes have been cut and the tax system has been reformed. We have invested in public services. Our top three spending areas are social welfare, health and education, in that order. Our public finances have been put on a sound footing. We are increasing spending at a rate we can afford and manage. The general Government debt level has been more than halved from 74% of GDP in 1996 to just 33% in 2003, the second lowest in the European Union. This means public resources can be used for services and investment instead of heavy debt payments. Provision for the future has also been made with the establishment of the National Pensions Reserve Fund. This budget aims to build on these successes and strengthen the resilience of our economy.
Our economy has had to cope with a much more challenging environment over the past 18 months or so. However, we can conservatively expect GDP growth of 2% and GNP growth of 2.5%. These rates of growth are still well above the European average. The European Commission expects EU growth to average just 0.4% this year.
The economic performance of our country is excellent. It means we have a very sound basis for future social and economic development. Governments and policy makers around Europe now want to learn from Ireland and thousands of people come here for jobs and opportunity. That speaks for itself.
In recent years inflation has been a cause of concern. However, it has eased significantly this year from a high of 5.1% in February to 2.8% in October, its lowest level in four years. We now expect that it will average 3.5% this year and fall to 2.5% in 2004. This is a very positive development for all our people, including consumers, pensioners, savers and investors. Low inflation is critical for the business environment and competitiveness. This is what creates jobs and wealth and generates the resources needed to build the sort of society we want. We must continue to focus on competitiveness and value for money for our future progress. The more competitive we are the more we will benefit from the international upturn.
We are also investing in the future by putting record levels of investment in research and development. We are providing €340 million across enterprise, agriculture, health and education. We have also introduced, this year, a research and development tax credit to encourage private sector research. Our future is based on knowledge and innovation.
We expect that our economy will respond to the international recovery as it develops so that Irish growth levels will remain significantly above the European average and will return to a trend growth rate of approximately 5% by 2006 if we continue to manage our economy prudently.
The Government is committed to providing public services which are of a high quality and give value for money. Since 1997 there have been real and effective increases in public spending on social welfare, health, education and infrastructure. We will continue to provide substantial funding for these key priority areas.
We are committed to pursuing policies which improve social inclusion, protect those most in need, reduce the numbers living in poverty and raise living standards. The budget builds on our work to date and provides substantial funding for the most vulnerable in our society. The improvements announced in the budget provide total social welfare expenditure in 2004 which is €750 million higher than this year. All the social welfare rate increases in this budget are well ahead of projected inflation. The lowest social welfare rates will be increased by more than three times the rate of inflation.
Old age pensions will be increased by €10 a week. This brings the old age contributory pension to €167.30 per week and the old age non-contributory pension to €154 a week.
That is €1.64 per day. If those people smoke a few cigarettes they will not have much left out of it.
If I had my calculator I would give the Deputy the amount his Government granted, down to the last decimal point. They were so minuscule they could hardly be worked out.
The Minister of State should have got his calculator out before he began to speak.
Widows and widowers will see their pensions increased to €173.70 per week. The monthly rate of child benefit for the first and second child will be increased by €6 to €131.60—
Big deal. That is an increase of 26 cent per child.
—a 245% increase since 1997. Deputy Durkan should put that in his pipe and smoke it.
Speaking of smoke, no one raised more smoking mirrors than the Government.
For the third child and subsequent children the rate will increase by €8 to €135.30, a 234% increase since 1997. If Deputy Durkan wants the Government to treble the rate he should wait until next year.
Does the Minister of State not realise that 1997 is history?
I thank God it is. I am delighted it is history and I would love to write it off.
All other personal weekly rates will be increased by €10, bringing the lowest full personal welfare rate to €134.80 per week.
The old age pension is being increased by €1.43 per day.
What will it buy? That is the way to look at it.
In addition, €25 million is being provided to assist persons with physical, intellectual or sensory disabilities.
The Government has delivered dramatic reductions in personal taxation over the past five years. This policy has helped to generate unprecedented growth in the Irish economy, a spectacular increase in the number of people at work and effective elimination of long-term unemployment. This is great credit to the vision and determination of the Tánaiste and others who had the courage to cut taxes against the loud advice of people on the left at every step of the way.
She cut taxes, schools, hospitals, housing and services.
Changes introduced in the budget will remove 41,400 taxpayers from the tax net, of whom 2,500 are aged over 65 years. The employee credit is being increased by €240 per annum, ensuring that 90% of the minimum wage is not taxable.
The Minister for Finance has made only minor changes to indirect taxation to keep the rate of inflation under control. The price of a packet of 20 cigarettes will increase by 25 cent and petrol and diesel will increase by 5 cent per litre. These changes will raise €243 million in revenue next year and will add less than 0.4% to the consumer price index.
To encourage better use of our agricultural land resource, relief for certain farm leases has been increased. For leases of five to seven years the exemption goes from €5,078 to €7,500 and for leases of more than seven years the exemption will increase from €7,618 to €10,000. The farm organisations have welcomed these changes very warmly.
The scheme of capital allowances for investment in farm pollution control has been extended by a further three years to end in 2006. Income received by Gaeltacht households under the summer student scheme will be exempt from income tax. Such income is already disregarded for social welfare income purposes.
The Government recognises the need for an effective infrastructure network for all parts of Ireland in order to allow us to sustain and encourage investment. Since 1997 the Government has invested over €33 billion with the aim of closing the infrastructure deficit in Ireland. We will continue to prioritise our infrastructure development. In 2004 investment in infrastructure, including roads, rail, schools and hospitals, will rise to €5.6 billion. This is almost 5% of GNP and is double the EU average.
I am please that this infrastructure investment includes the budget's additional €30 million capital for education—
Last year's leftovers.
—bringing the spend on building and upkeep of primary and secondary schools in 2004 to €387 million.
How many prefabs will that pay for? Is that just for new prefabs? The Minister of State should get real and look around the country. He should not boast about that spending.
If Deputy Durkan wants to get real he should look at the quality of prefabs. If he is suggesting there is something deficient in prefabs he should go and visit one.
In another year we will have prefabs all over the country. Any place that does not have one now will have one next year.
In this year's decentralisation budget the Government has made a decisive step forward for economic development across all regions. This is a historic budget. It signals an end to the thinking about going up to Dublin and down the country, about the rich east, the poor west and the forgotten midlands. We are putting an end to that and making a start to a balanced, fair and inclusive Ireland, east, west, north, south and the magnificent midlands.
I am grateful for the opportunity to make a brief contribution to this debate. I thank both colleagues for sharing their time with me. From the perspective of the Government backbenches, I view this budget in a positive light, I laud its thrust and it has my wholehearted support. The economy is emerging from a downturn which has also affected the global economy. I commend the Government for resisting what must have been a great temptation to borrow heavily, particularly as there were those who strongly advocated this course. Happily, it appears that lessons have been learned from the mistakes of the past made by Governments of all hues when this course was embraced with disastrous consequences. The Irish people and Irish taxpayers are still paying through the nose for those mistakes. We would have a wonderful economy today if we did not have to service that debt of yesteryear. The Government is now dealing with it in a more sophisticated and professional fashion and not as in the past, heaping all the take from the PAYE sector into that bottomless pit of borrowing.
Decentralisation seems to be the main topic of this budget. Members on all sides of the House have concentrated on this issue. I welcome the proposals for decentralisation. I envisage that it will breathe new life into many towns and communities throughout the length and breadth of Ireland.
Speakers on the other side of the House, such as Deputy Enright and my good friend, Deputy Connaughton, have welcomed this proposal. Deputy Connaughton stated he has spent a lifetime striving for decentralisation, as indeed have many of us in this House. Year after year during debates such as this I have advocated progress towards decentralisation because of the merits it can and will bring to the country. It is a logical and meritorious issue and I am pleased it is being done. In my wildest dreams I never thought that such a large step would be taken on the issue. The scale is very encouraging.
All Members of the House should take a bow with regard to decentralisation. We all have our own drums to bang but I do not think it should be the subject of adversarial comment. For instance, in my constituency of Wicklow, the public representatives met as a group on a regular basis. At that time I was the senior political figure in the constituency because I was a Minister of State. I sat around the table with a Fine Gael councillor, Mr. George Jones. We worked together to make a presentation to Government. It was a superb presentation which displayed the wares of Wicklow, its towns and communities. The chambers of commerce and my colleagues from this House, such as Deputy McManus, now deputy leader of the Labour Party, Deputy Timmins and those of my own ilk, were all together at the same table. We produced what we regarded as a very meritorious application for an allocation to Wicklow. We were successful and we did it together.
Speaking as a Deputy for Wicklow I am somewhat disappointed at the scale of the allocation which it received. Deputy Connaughton spoke about his town of Ballinasloe being run down. He claimed it was perhaps one of the worst towns in Ireland. I suggest that he come to Wicklow and visit Arklow. In the past it was a thriving town but with the run-down of traditional industries it became the worst or one of the worst towns in Ireland, economically speaking.
I remind the Deputy that Wicklow has Deputy Roche.
Thousands of jobs were gone in one fell swoop with the run-down of those traditional industries. I welcome decentralisation but the scale of County Wicklow and its large population warrant something more than those 140 new personnel. They will be greatly welcomed to south Wicklow but there are other areas of the county requiring attention.
In his contribution yesterday, the Taoiseach spoke about decentralisation as did all the other speakers. He stated it would be an ongoing policy for the placing of future Government offices or services. He said that even in the present round, not all of the locations have yet been decided upon. I will rely on the statements by my party leader, the Taoiseach, that there is more to come. I ask him to bear in mind my comments and my appeal to further consider the requirements of County Wicklow with its scale and its large population. There is a downside to its situation on the immediate periphery of Dublin and it could do with further benefits from this programme.
I heard the Minister for Justice, Equality and Law Reform, Deputy McDowell, and Mr. David Begg speaking on the radio this morning. They were discussing economic prosperity and social justice. I suppose everybody expected blood and an adversarial battle between those gentlemen who in their particular fields do an excellent job for the country. That did not happen and they spoke about the appreciation for the employment that has been created over the last number of years.
The Taoiseach in his contribution to this debate stated that schools were as important as roads in infrastructural requirements and progress. There are many schools in my constituency screaming for attention such as St. Saviour's Church of Ireland national school in Rathdrum, Lacken national school and Hollywood national school. The mother of all mistakes has been made in Avondale community college which is situated in my home town. I have had an excellent response on that matter from the Minister, Deputy Noel Dempsey. I am confident he will address and correct that faux pas in the short-term.
I wish to share my time with Deputy Gilmore. Having listening to Deputy Jacob's contribution I suspect that were he still a Minister, Wicklow might have figured more prominently in the budget, particularly concerning the schools' programme, but that is the way of politics.
It is a pity the Minister for Justice, Equality and Law Reform has left the Chamber because I want to make a few comments on what he said. His political vision needs to be scrutinised somewhat. He has a rather schoolboy style of debate and when one strips away the trimmings, all that is left is the rhetoric of a traditional class warrior.
That is right.
This is a Minister who defends privilege and wealth. He is quite happy to tolerate and promote the idea of a heavy new form of levy on young house buyers, while at the same fighting tooth and nail to prevent a wealth tax. That is the reality of his position.
The budget, promoted by the Progressive Democrats and Fianna Fáil, is about defending the super wealthy and providing tax breaks the wealthy can avail of, while others cannot. The budget is about middle income families struggling to pay for education to ensure their children have a good start in life so they can deal with the rising cost of living. That reality has not been addressed in the budget.
The Minister has been quick to rewrite history but during the time of the rainbow Government there was a record level of house building. More importantly, however, people could afford to buy the houses being built because the balance between income and the cost of housing was reasonable. During the period of office of the Fianna Fáil-PD Government that balance has gone totally awry. The relationship between income and the cost of housing is completely out of kilter, to the point where many people are either getting into enormous debt or have great difficulty getting a foothold on the property ladder.
The other legacy of the rainbow Government was its contribution to combating crime. It is important to point this out, particularly as the Minister for Justice, Equality and Law Reform did not mention crime in his speech.
Not once.
He has been very silent on the subject, yet everyone is conscious of the fact that we have a serious crime problem. The level of gangland killings is frightening people.
That is right.
The Minister has opinions about everything except his brief, which is to tackle crime. Where are the great achievements, such as the establishment of the Criminal Assets Bureau for which the rainbow Government was responsible? Where are the Minister's great initiatives? He is battling with the Garda Síochána and the prison officers but, meanwhile, gangs are killing each other in the streets and creating a dangerous environment for the rest of us.
That is right.
The Minister says he is only interested in jobs and claims that his Government has generated all the new jobs in recent years, but that is childish rubbish. Everybody knows that the jobs have not arisen as a result of something that happened in the last couple of years because the Government played around with the tax bands. This is about serious deep-rooted investment in education that goes way back. It is about EU transfers of large amounts of money to this country. It is about partnership where workers made sacrifices and reached agreements for the benefit of the entire community. Let us get real, therefore, and stop telling little stories that do not tie in with reality. It is a sign of the bankruptcy of the Progressive Democrats that we have this kind of flim-flam, while at the same time the Progressive Democrats are shoring up the so-called decentralisation plan, which is the greatest example of pork barrel politics we have seen in years.
Some 71,000 workers are now being brought into the higher rate of tax. Is that PD policy? Is that what they want to see in Ireland? I thought the Progressive Democrats were the low tax party. They are the low tax party for very rich people, which is essentially the impact of what they are doing. The fact that the budget has been overshadowed by the decentralisation programme does not mean it will not have a negative effect. Some 71,000 extra people will come into the higher tax rate, while mothers are wondering what they did to deserve an increase of only 20 cent per day in child benefit. What is it for? What can one buy for 20 cent? A lollipop perhaps. People are more interested in these sums when they come to assess the budget than the Government's grandiose decentralisation scheme, which is a minor distraction in most people's lives. Decentralisation is a fig-leaf to cover the embarrassing deficiencies in the budget, as well as being designed to create a benign context for next year's local elections.
It is worth repeating that the plan does not involve decentralisation at all. It is a scatter-gun dispersal of offices around the country, if it ever happens, which is hugely debatable. It is being done by a Government that has abolished real decentralisation through the health board structures, where there was accountability and decision making at local level. Flawed as the health board system was, it at least provided for local decision making, yet the Government has no compunction about abolishing the entire structure instead of reforming it. The Government is thus centralising the decision-making process that operated hitherto on a local basis.
The decentralisation plan has been driven by political rather than planning considerations. No impact assessment has been undertaken to inform us whether or not it will produce better Government or whether it will create a further fragmentation of services. Nor will the Minister for Finance tell us how he can reconcile his ambition to decentralise with the free choice of thousands of civil servants. He cannot do so because he has never bothered to find out what approach these civil servants, both senior and junior, would take to any such dislocation.
I am concerned that the Minister of State, Deputy Parlon, did not put on the record his approach to State property. Nothing has been said about the cost of long leases the Government is already tied into concerning State properties, or about such properties that are part of our historical architectural inheritance. The Minister of State should have been able to tell the House that he is not going to sell the Custom House, contrary to what has been floated in the media. It would be a disaster if that kind of architecturally important building fell into the clutches of commercial interests. That is the kind of thinking the Progressive Democrats have been promoting for a long time. While my fear may be groundless, it would be important for the Minister of State to make that commitment in the House.
Health matters are of great concern to people but the budget has done nothing to alleviate their concerns. The most disgraceful of all the broken promises of this Government, and there are many, is the cold-blooded decision to refuse to increase the number of medical cards to those on low incomes. A specific commitment to provide 200,000 new medical cards was given by Fianna Fáil, while in its healthy strategy the Government promised to increase income limits for eligibility, but neither promise has been kept. The Government's record is truly shameful. Excluding the better off over-70s, the number of people with medical card cover is the lowest ever since the scheme was instituted in 1972. At 27.7% of the total population, it is a stark and telling figure. At a time when the country's finances were significantly restricted, approximately 38% of the population had medical card cover. The Government could have increased that, without any difficulty, to 40% of the population but it chose not to do so.
I ask that a commitment be given in the House that where incomes go over the limit because of an increase in the basic minimum wage or in social welfare payment, people will not lose their vital medical cards. These people are on low incomes. For them, the cost of attending a general practitioner, which is €40 or even €45, is the same as it is for those on high incomes. The cost of the community drug scheme has increased to €78. These people are trapped in an out of date and cruel level of income eligibility which dictates that a married couple cannot get a medical card if their combined income is over €200 per week. A single person under 66 years of age is over the limit once his or her income goes over €138. People cannot look after their health in those circumstances. I would like to see the Minister for Justice, Equality and Law Reform manage a family on that kind of low income and deal with medical bills. That would be a real and new experience which might enlighten him somewhat when he comes in here and patronises the rest of us.
The people who cannot afford to see their doctor either get better, which does happen sometimes, or, more often, become unnecessarily seriously ill and end up in accident and emergency departments. That puts greater pressure on an already pressurised emergency service.
At the Joint Committee on Health and Children I requested the Minister for Health and Children to correct the record after his Minister of State, Deputy Callely, made grossly misleading statements on radio the other night and I do so again because it has not been corrected. The Minister of State, Deputy Callely, stated that eligibility levels for a medical card are the responsibility of the chief executive officers in health boards. That is mischievous nonsense. It is also dangerous nonsense because it shows the length to which the Government is willing to go to avoid bearing its responsibilities and living up to its commitments. We teach our children to tell the truth yet, increasingly, the truth is being bowdlerised by this Government. Ministers do not care about accountability.
Before the general election we had a health strategy which promised a great deal but what did it deliver? It delivered a general election. That was the net effect of the health strategy. Since then we have had three new reports, Prospectus, Brennan and Hanly, which referred to fundamental changes, the abolition of health boards, the institution of new bodies to manage the health service, a doubling of the number of hospital consultants, a greatly enhanced ambulance service, highly developed primary care, hundreds of acute beds and their replacement, and the resourcing of the hospital service, none of which has been costed or measured.
We often talk in health care about evidence-based medicine. It is important to base any comment on the Government's spin on evidence, and the evidence is very clear. The budget is telling a totally different story to the story being told by the Minister for Health and Children. The multiannual part of the investment programme makes sense but the figures published for capital investment simply do not add up if we are talking about a health reform programme as outlined by the Minister for Health and Children. There is no additional funding to implement the recommendations in the Hanly report. That is the clear message coming from the Estimates and the budget.
I will briefly refer to the figures for the next five years. We are not just talking about next year but over a period of time. In 2003, the capital investment in our health service was €514 million. In 2004, that figure will not be increased but will be cut to €509 million. Direct Exchequer capital funding will reduce further to €475 million. In fact, over the five-year framework enunciated in the budget, the average increase in capital health spending by the Exchequer will be 0.5%. That is the true nature of health reform. What we are talking about in reality are cutbacks, not investment, as we have seen them in terms of hospital bed closures and difficulties experienced by people in getting access to health care. That is a tragedy because for so long money has been available to do the right thing in the health service yet the possibilities were not availed of. Instead we have this smug, small vision from the Progressive Democrats which appears to be driving this Government in a direction where it concentrates solely on jobs, as if economic prosperity and social justice were somehow incompatible. They are not. What we do know is that when the economy is good and there is an equal society, we also have a healthy people.
It is a pity the Minister for Justice, Equality and Law Reform did not remain in the House after he had delivered his "L and H" style contribution in which he defended wealth and capital gains and gave a condescending impression of the poor – if he meets a poor man he must always be the defendant.
In the context of the budget it would be interesting to hear from the Minister why there is not a penny for the provision of the 2,000 additional gardaí promised during the election and which are needed to provide safety and security for people and for which he is directly responsible. I have never before heard a Minister coming into this House and speaking on the budget about everything except the areas for which he is responsible and on which he is failing.
That is right.
I received a letter from a constituent who tells me that she is an out-patient at a liver unit in one of the hospitals and that she was sent to her dietician earlier this year for the management of a severe food intolerance with an associated bowel disorder. Arising from that, she was put on special diets because of her intolerance of lactose and a variety of other foods. She gets a dietary allowance of €74 per week. She is on an income of €132.50 per week disability allowance. This woman is a victim of the cutbacks introduced by the Minister for Social and Family Affairs, Deputy Coughlan. She is one of many who are facing the loss of the dietary allowance and many more like her who will be prescribed such allowances in the future. People who are renting, for example, and who have been in their accommodation less than six months, are facing the prospect of not getting a rent allowance. Unemployed people will not be able to go back to education. People who lose their jobs will see their unemployment benefit cut by 11 weeks because they have only four years' social insurance contributions. For every one of the 16 cuts made by the Minister, Deputy Coughlan, there are real people who are suffering.
I expected to hear in the budget that there would be a reversal of the €58 million in cuts made by the Minister, Deputy Coughlan, or at least some adjustment to them. I also expected to hear some proposals to provide for the community employment schemes which are so important to disadvantaged areas. Unfortunately, there was no such announcement in this budget nor was there any additional money for homelessness or special needs education. There was not much joy in it either for taxpayers because 73,000 additional taxpayers who are now on the 20% band will go into the 42% band. Ministers and Deputies on the other side of the House who constantly tell us that this budget favours the less well-off should explain to this House why, when tax and PRSI are taken into consideration, somebody now on the average industrial earnings will pay tax and PRSI at 48% but somebody on three or four times the average industrial earnings will pay tax and PRSI combined at a rate of only 44%. They might also explain how those people will deal with the hidden taxes that are implicit in this budget, such as the increase in local authority service charges. These charges will inevitably rise because of the Government's failure to provide adequately for the benchmarking awards which must be paid by local authorities.
Much has been made of the €30 million provided on a once-off basis in the budget for the local government fund. When inflation is taken into account, this additional sum will still leave the local authorities €90 million short of what is required to meet their benchmarking commitments. This will inevitably mean higher commercial rates and local service charges, which are regressive stealth charges on people who can ill afford it.
To cover up for this lazy budget and provide some cheer for the demoralised Government backbenchers, the Minister for Finance announced on budget day a grand plan for decentralisation. These proposals are a test of the gullibility of the people. The people of the 53 towns selected for promises of Government offices and decentralised civil servants need to ask themselves why they should believe this promise from the same people who lied to them before the general election about school extensions, 2,000 additional gardaí and 200,000 additional medical cards. I listened to a representative of one of the chambers of commerce, when asked this question on television on budget night, make the point that the promise could be believed because it was in the budget speech. I remind him that the same Minister who delivered the budget speech explained away the promises made in the Fianna Fáil election manifesto in mid-2002. After the election he told us that if we had read the small print of the manifesto, we would have realised that the promises were all conditional on economic performance and availability of resources.
What, therefore, does the small print of the budget tell us about decentralisation? It tells us a story quite different from the press releases now being issued by Government Deputies to local newspapers and radio stations. In the budget speech, we were informed that the full details of decentralisation were in the budget summary. Turning to the summary, we find three facts regarding the details of decentralisation. First, the status of the plan is described as just a proposal. Second, responsibility for implementation is being given to an implementation committee, which will mean, for example, that when a town finds that the promised decentralised office and staff are not materialising and asks where they are, it will be referred to the hapless chairman of the decentralisation committee, Mr. Phil Flynn, which is being set up to take the blame. Third, we are told the Government may make adjustments to the detailed provisions below, where necessary, to ensure continued effective delivery of public services.
All this is in addition to the requirement that decentralisation must be voluntary. We all know that many civil servants would happily volunteer to move out of Dublin but it is stretching credibility to believe that the staff of an entire Department, including all its professional and Department specific personnel, will volunteer to move out of the city to the town selected for them. Many of the towns being given the big promise will eventually be told "Sorry, but they would not volunteer."
In his budget speech, the Minister proclaimed "the locations which have been selected take full account of the national spatial strategy." Here, he is wrong again as only a quarter of the proposed decentralised jobs are to go to the hubs and gateways identified in the strategy and some of the towns already promised decentralisation will get nothing. These are Letterkenny, Ballina, Castlebar, Tuam, Galway, Ennis, Tralee, Cork, Waterford and Dundalk. The proposed decentralisation is the big promise for the local and European elections in June and any town or county which believes it deserves the disappointment it will eventually suffer.
In today's newspapers we read that the line Ministers and civil servants in the Departments affected were only told about the plan 48 hours before the budget. If this is true, the decentralisation proposals are not serious or thought-out. If they were serious, the Minister for Finance would be able to tell us a few things about them. He informed us in his budget speech that the proposals were first flagged in budget 2000. If that is the case, discussions with the Departments affected must have taken place during the past three years, not only the past 48 hours. The Minister should be in a position, therefore, to tell us something about these discussions, for example, the reason the Minister for Defence was able to inform the House on 4 November that there were no further decentralisation plans for his Department, yet on budget day we were informed that the entire Department of Defence will be decentralised to a number of towns in County Kildare.
The right hand does not know what the left hand is doing.
How were the eight Departments selected for decentralisation and what criteria were used? Why were these particular Departments found guilty of what was referred to as the Dublin mindset, for which decentralisation is the rehabilitation? Why are the Departments headed by the Minister, the Taoiseach, the Tánaiste, the President of the Progressive Democrats Party and the two powerful Ministers for Foreign Affairs and Health and Children, the heirs apparent, not on the transfer list? Will we now have two-tier Government in which a premier division of powerful Departments, coincidentally headed by the politically most powerful Ministers, is based in Dublin, while all the other Departments are scattered to the 53 centres selected? How will the decentralised Departments compete for resources and attention with the top level Departments which will remain within the Dublin 2 loop?
How were the towns selected? What criteria were used and alternatives considered and why were most of the national spatial strategy towns excluded? How were sections of Departments selected for allocation to specific towns? Why, for example, in a country with a longer coastline than France was it decided to locate the Department of Communications, Marine and Natural Resources in an inland town which could not be further from the sea? What consideration was given to the consumers of departmental services? For example, when representatives of a group water scheme in the west want to talk to officials of the Department of the Environment, Heritage and Local Government, they can now simply take a train to Dublin, but if the proposals are implemented they will have to take a train to Heuston Station, a bus to Connolly Station and another train to Wexford.
Provided they can get a train.
The location of the Government offices will obviously deliver economic benefits to the towns concerned, but what assessment has been made of the implications of the removal of the jobs in question from Dublin? Assuming many of the partners of the 10,000 civil servants involved are also in the workforce, it is probable that 15,000 jobs will move out of the capital. In addition, the services and suppliers of the Departments affected will also have to move. What economic impact assessment was made of this decision?
I hear Deputy after Deputy from the Government side refer to the 25 counties. It is remarkable that Fianna Fáil, the republican party, now seems to believe in a 25 county Ireland.
They sold out long ago.
How will the jobs being moved out of Dublin be replaced? For example, is it intended – there appears to be a hint of this in the budget – that they will be replaced by high value-added jobs in companies that will benefit from the proposed new tax measure exempting the disposal of subsidiary companies from capital gains tax, which is intended to enable Ireland to compete internationally for headquarters and holding companies? Is it intended, therefore, that the public servants will move out of Dublin to make way for high value-added international companies which will come here to replace them? If that is the case, are the provincial towns concerned being sold a big pup, namely, the emphasis and direction of encouragement for inward investment will be focused on attracting high value-added companies to locate in Dublin? I assume some assessment has been made of the economic implications for Dublin of the decentralisation proposal and I would like it on record and explained to the public.
This proposal does not involve real decentralisation because the political and administrative structures it has been proposed to decentralise will remain as centralised as ever. Real decentralisation involves the devolution of functions to local and regional authorities, as happens in many other countries in Europe and elsewhere. This is not the case with the current proposal. The Government, if it is serious, is proposing to retain the highly centralised governmental structures, while simply scattering them to various parts of the country. That conclusion could leave the country, whatever about the individual towns and counties concerned, worse off in a situation where the Government, which sometimes leaves us wondering about how joined up it is, is less joined up.
We will return to these matters during Question Time and other debates in this House. It will be interesting to hear how the Government intends to proceed in practical terms with a decentralisation proposal which it seems to have dreamed up off the top of its head to provide cover for a bad budget.
I wish to share my time with the Minister of State at the Department of Health and Children, Deputy Callely, and Deputy Fitzpatrick.
An Leas-Cheann Comhairle
Is that agreed? Agreed.
It is ironic to listen to the contributions from the opposite benches about decentralisation. I am sure you, a Leas-Cheann Comhairle, are as pleased as I am, given that you also come from the same county, that a number of jobs will come to Kilkenny and its small rural towns, such as Thomastown. It appears that is against the wishes of the Opposition benches. They should be open and say they are against decentralising to places in our constituencies.
That should not be believed.
They want it all here in Dublin.
That is ridiculous.
As a representative of a rural constituency, I am pleased that small towns in locations outside Dublin have been recognised. I look forward to decentralisation and I hope it continues. There are many small towns in my constituency and across the country which need an injection of jobs.
How far forward will it be?
I am glad the Opposition has gone on record as saying that it opposes the decentralisation programme.
We did not say that.
It is ironic that a former Fine Gael-Labour Government stopped the decentralisation programme in the period between 1980 and 1983. It is showing consistency in that regard.
Is that the best the Minister of State can come up with?
The Deputy was not here when it happened. I was here and I saw what it did.
I was here as well and I saw what happened.
Ireland today is the envy of every other member of the EU and all ten applicant countries want to emulate the success of our economy. This success has been achieved by a Fianna Fáil-led Government which has managed the economy more successfully than any other Government in the history of the State. I will give the House a few examples of this unprecedented success.
We created 28,500 new jobs in the past year alone and we have immigration, not emigration. We are now one of the richest countries in the EU and our incomes are 125% of average EU income. Income tax rates have been halved since the Fine Gael-Labour Government last had a full term in office. Corporation tax has been reduced from 50% to 12.5%. Unemployment at 4.5 % is less than a quarter of what it was when Fine Gael was in Government in the 1980s. GDP growth is down to 2.5% this year from 9% in recent years, but key economic forecasts suggest it will increase by up to 5% next year and remain close to 6% over the coming years. Interest rates are at their lowest level in the modern era. The House may remember that interest rates under the Fine Gael led Government were at 23%.
What were they in 1979?
I was here at that time.
I was also here. Interest rates were at 21% in 1979.
Inflation has also fallen to 2.3%. The Deputy was endeavouring to get a seat in the House at that time.
The Fine Gael-Labour Government's public capital programme peaked at €4.4 billion in 1997 when it told us the country was doing well. In 2003 we doubled it to €8.9 billion and it will be €9.7 billion in 2004.
We do not doubt the Government's ability to waste money.
One might ask what all that means in real terms. I will illustrate what is being achieved with a few examples. This year alone 58,000 houses will be completed compared to 35,000 houses when Fine Gael and the Labour Party were last in Government.
They are twice the price.
There are 420,000 more people at work than there were when we took office in 1997.
What houses? Where are they?
The Deputy should not get lost when reading my speech. I have moved on from that.
I am not lost.
An Leas-Cheann Comhairle
The Minister of State should be allowed to make his contribution without interruption.
Corporation tax generated €4.8 billion this year compared to €327 million in 1986. That is a significant increase of 1,300%. We have removed 690,000 lower paid workers completely from the tax net. We have the most generous minimum wage in Europe.We have trebled child benefit payments and increased the old age pension by two thirds.
We have the highest number of homeless people in any European city.
Does the Deputy not remember what happened? He got his message at the last general election. He should not try to live in the past. He should try to forget about that time.
The Minister of State will get his message at the next election.
There are more homeless people here than in the city of London.
Since 2000 we have completed 230 kilometres of motorway and we are currently completing a further 200 kilometres, despite the attempts of certain "green" elements to disrupt and delay progress.
All this progress has been achieved by careful management of the national finances by Fianna Fáil and by prudent capital investment over the years this Government has been in office. We are now the envy of the rest of the European Union and Ireland is the member state which all ten applicant countries want to emulate. Are all those countries wrong and are Fine Gael and the Labour Party right?
Are the Fianna Fáil 40 wrong?
The only depressing thing about Ireland today emanates from the Opposition benches of Dáil Éireann.
The fruits of the economic success we enjoy today are sometimes taken for granted, particularly by young people. Many of us remember the disaster of the last Fine Gael-Labour Government which lasted a full term in the mid-1980s. Do we want to go back to the dreadful state the country was in then when parents were genuinely worried if their children would get a job at home or if they would have to emigrate?
What about 1979 and 1980 when there was no budget to pay the Army, teachers, nurses or gardaí? Where was the Minister of State then?
An Leas-Cheann Comhairle
Order, please. The Minister of State should be allowed to make his contribution without interruption.
The Deputy will get his chance.
I cannot wait.
We all remember the issues surrounding Knock, Shannon and Dublin airports.
Fianna Fáil was draining the Shannon then as well.
Our young people were leaving the country. That was a time when householders were unable to meet their mortgage repayments because of spiralling interest rates and when the towns of rural Ireland were dying on their feet. We are trying to do something about that.
Fianna Fáil killed them and treated them with contempt.
Since the last election the twin parties of doom and gloom have been preaching their contradictory economic theories. Their wanton irresponsibility is evident on the Order of Business every day in this House when they demand spending increases. I remind the House of what life was like under the wild spending and heavy borrowing of the Fine Gael-Labour Government which doubled the national debt to €30 billion in its four years in office.
What happened between 1977 and 1979? Who did it and how?
It wrecked the economy. High borrowing, high interest rates, high inflation and high tax became the hallmark of the economy. Such irresponsible Government served to cripple economic activity, reduce competitiveness and erode all incomes.
Interest rates were at 21% and inflation was at 23%.
An Leas-Cheann Comhairle
The Deputy should allow the Minister of State to continue without interruption.
It caused increasing unemployment and it was accompanied by a national feeling of doom and gloom that was fed by further borrowing to pay an increasing number of unemployment benefit recipients. The country was enveloped in a sense of paralysis, helplessness and depression. Income was taxed at an unbelievable 65%, in addition to three 1% levies. When the levies were taken into account, they brought the then standard income tax rate of 35% up almost to today's highest rate of 42%. In those dark days corporation tax was 50% compared to 12.5% today. In other words, we were taxed out of existence by the Fine Gael-Labour coalition Government to enable useless day to day spending which did not show any return. Those appalling economic policies pushed the national debt to 125% of GNP compared to 35% today. Some 50,000 people left the country in despair each year and almost one fifth of the workforce was on the dole. It is no wonder Fine Gael is the party of depression.
Fianna Fáil ran away. It sank the country in 1977 with outlandish promises.
An Leas-Cheann Comhairle
Order, please. The Minister of State should be allowed to make his contribution.
It was not for the first time, but this time it got caught.
Today it has the brass neck to lecture the most successful Government in the history of the State about the running of the country.
What about Fianna Fáil's friend at Kinsealy?
Those startling facts are getting to Deputy Durkan.
It was the greatest atrocity committed against the people.
If people think Fine Gael has changed, they are wrong. If it had formed the Government after the last election, what policies would it be implementing now? I remind the House of only two of Fine Gael's irrational promises at the last election. It planned €400 million in compensation for taxi drivers. It also planned to spend millions more of taxpayers' money to compensate Eircom shareholders.
The Government could not do that because it conned the people out of their money. It could not give it back to them.
Is it any wonder the electorate decimated that party in the election? Those people and certain elements of the media would have us believe that Ireland today is in some type of crisis. They have failed to come to terms with the fact that Ireland today is a wealthy country and that our people are seeking services commensurate with that status.
There are no schools, houses, hospitals or law and order.
There is no Luas or runways.
There is no metro.
The Government is addressing these issues such as health, education and infrastructural problems in a positively planned programme that we will deliver.
There is no Luas or Dublin Port tunnel.
The Deputy is baying. It is about time he listened. On agriculture, my Department's responsibility, I am glad to see that the Central Statistics Office has announced today that aggregate farm income has increased by 2% this year. Direct payments continue to be an important component of incomes, amounting to more than €1.6 billion in 2003 or an average of €13,000 per farm.
Some farm specific tax measures have been enhanced in the budget and these will benefit the farming sector to the tune of €21 million or about 1% of aggregate farm income. A significant provision has been made in the budget for 2004 to encourage the leasing of land on a long-term basis. From 1 January next, the current income tax exemption for land leased out by farmers aged over 55 years on a long-term lease to unconnected persons is being extended to farmers aged over 40 years. The rental income exemption limits for this relief are also being raised from €7,618.43 to €10,000 for leases of seven years or more and from €5,079 to €7,500 for leases of five to seven years.
This amendment will help improve land mobility which is central to the Government's strategy of developing a core of commercial full-time farms. At present, 19% of agricultural land is leased but mostly on a short-term basis, and land sales are at their lowest levels at less than 0.2% of agricultural areas. The improved income tax exemption should help free more land and make it available on a long-term basis.
An increase in the supply of land should facilitate better long-term planning by farmers who may be required to scale up production at a reasonable cost. Concerns have been expressed that decoupling and the linking of the single farm payment to the area farmed in 2000 to 2002 may result in rigidities in land movement at a time when the availability of land will be critical for those who wish to remain in full-time farming.
The provision is estimated to be worth €13 million in a full year. The Government's commitment is underlined by the high level of public expenditure. The gross provision in the Abridged Estimates of €1.39 billion is an increase of 5% over 2003. In addition to this, my Department is also responsible for a further €1.6 billion of EU-funded agricultural measures, bringing total expenditure to just less than €3 billion.
Following decoupling, farmers will be free to focus more sharply on the market and the demands of the final consumer. Any incentives to maintain livestock which do not make a viable return from the marketplace will be eliminated, and the burdens associated with compliance, with a myriad of schemes involving various application dates and retention periods, will also be reduced. This provides a better basis for a competitive agriculture and food industry than a system that required farmers to base decisions on eligibility for premium.
Great strides have been made this year in securing the future of agriculture. We have laid the basis for a simplified Common Agricultural Policy with a financial framework agreed until well into the next decade. Cushioned by single farm payments, farmers will now be able to direct their attention to the market to enhance their incomes. Our agri-food sector, in turn, must respond to this more market related approach and embrace the new system. I have no doubt or hesitation in commending the budget to the House.
I support the seventh budget of the Minister for Finance, Deputy McCreevy. It has been difficult to listen to Opposition speakers repeatedly attempting to criticise aspects of the budget for 2004.
How could we not?
My message is one of optimism and confidence. Never in the history of this great country have things been going so well.
Romans and countrymen.
Some might think, with a Fianna Fáil-led Government, that it automatically follows that we should have economic progress and social gain. I understand, arising from our proven track record, that Fianna Fáil is identified in the public mind with economic development and success.
Identified indeed.
The Minister of State is deluding himself.
However, it does not come automatically. The budget, like its predecessors, has set out a strategic framework for further economic progress. Over the past six years, Fianna Fáil-led Governments have followed a vision and taken decisive decisions to make society an even better place.
Where are the frightened 40 now?
Acting Chairman (Mr. Ardagh):The Minister of State, please.
There is hardly a local area from Malin Head to Mizen Head in which some new project or development is under way. We hear every day of new success stories, projects and achievements.
What achievements?
Let us not forget the progress that has been made in recent years. We have diversified our industries and markets. We have sound economic policies and substantial job opportunities.
We also have the highest prices in Europe.
We have a tremendous international reputation.
This is the dearest place one can visit.
We have found a new confidence and belief in who we are and our capacity to succeed.
It is just as well.
All the progress we have made has not been the result of one or more budgets. It has required tough and hard decisions, strategy, vision and determination. It may take a decade before the seeds that have been sown reap rewards.
It will take us 100 years to recover.
Our vision must crystallise into specific goals at the right time. Road maps must be put in place to achieve these specific goals. This good Government has performed all the necessary homework to build on our progress and experience to date to take us as far as we can go as quickly as possible.
Into the tunnel.
The budget continues the vital investment in our infrastructure with more than €28 billion invested to date and a further €33 billion investment over the next five years in what is for the first time a multi-annual envelope.
The decentralisation programme offers a tremendous opportunity for balanced regional development. I especially welcome the €20 million capital allocation upfront and the implementation committee to progress this programme.
It is often said that, with the economic growth that this country has enjoyed, the rich get richer and the poor get poorer. I do not support this myth. Some of the rich may get richer, but we only have to look around us to see that there is broad, general improvement in our standards, disposable incomes and lifestyles.
What about the people?
I accept that we need to be vigilant to ensure equity and fairness. We have made great strides in the development of social inclusion. With ever-changing goalposts these social inclusion policies must and will continue. Health, social welfare and education must be continually investigated with a view to their perfection.
I warmly welcome the range of good social welfare measures as announced in the budget for 2004, especially the fact that the highest percentage increase in social welfare payments has been granted to older people.
There is only 21 cent for child benefit.
These measures include the increase in older persons personal rates, respite care grants and widowed parents' grants, the improvement in the means test for the carer's allowance and the after death payment, and the generous tax benefits, especially the tax exemption limits.
There has been no increase in child dependant allowance.
There has been a continued increase in the number of older people qualifying for these benefits and all the secondary benefits of the free schemes. There are free electricity and gas units, free television licence, telephone rental, fuel allowance and living alone allowance, extension of the free travel and companion passes, medical cards, chiropody services, etc.
Do children not matter?
In the area of health, we will spend more than €10 billion on the provision of services in 2004. We have a blueprint in our health strategy, Quality and Fairness, and considerable progress, maybe not as much as I would have wished, has been made.
There are fewer medical cards than there were ten years ago.
I warmly welcome the additional sum of €25 million for services for people with disabilities. We still have some way to go in this area to bring our society, supports and structures to the level of equal opportunity for all.
The increase in child benefit is 21 cent a day.
The disabled persons grant has been reduced.
Many good things are happening in our health services and in every community. As a young member of Government I am determined to press ahead with the work we in Fianna Fáil have begun in building a better Ireland.
What about homeless people?
My vision is to achieve a first class health service by working to eliminate the gaps and variances in the regions. While the wide range and complexity of services makes this a difficult task, I look forward with enthusiasm to the challenge of improving our health services to the standard of a fair, equitable and world class service.
My highest priority is a marked improvement of all services for older people. The cornerstone of my Department's policy is to keep older people in their homes according to their wishes by creating proper supports and structures. With expenditure in health we can and will continue to develop and enhance our services.
Following successful pilot projects on home subvention community supports, I am working with all health boards to roll out personal care packages, including home subvention, in every region. This will involve the client in deciding and implementing his or her home care plans—
Where will the homeless go to implement these plans?
—and is fully in keeping with the principles and objectives of the national health strategy in that it offers person-centred care, co-ordinated planning between agencies and service providers, integrated care plans for older people and support for informal carers. The initial feedback from service providers on my proposal to explore the enormous benefits arising from personal care packages is proving that it has been tremendously successful. Government policy on health services for older people was outlined in the report, The Years Ahead, and reaffirmed in the review of that report which was published in the late 1990s.
The Deputy should not forget the dancing classes.
This policy was given further impetus in the national health strategy.
We value our older people and therefore place a specific emphasis on an approach which aims to maintain them in dignity and independence at home.
What about young people who cannot buy a house?
I will demonstrate the Government's commitment to a comprehensive range of services for older people by outlining the resources made available to my Department in recent years. Additional revenue funding for the development of services for older people has increased significantly from €12.7 million in 1997 to €87 million in 2002. More than €270 million in additional funding has been provided for services for older people from 1997 to the present. This has resulted in the recruitment of 1,000 additional staff. Between 1998 and 2001 more than 550 additional beds have been provided in new community nursing units and more than 1,250 day places have been provided in new day care centres.
A root and branch review of the nursing home subvention scheme is under way in my Department and is considering all aspects of the scheme, including the allowances given for assets, assessment procedures for means and dependency and all other elements of the scheme. My Department is also in the process of consulting all stakeholders with an interest in the scheme to hear their views on how it might be improved to benefit the most important person involved, the patient. I invite Members to participate in this. It is planned to bring forward proposals for additional measures that may be necessary arising from the expenditure review and the Ombudsman's report together with the experience gained from the operation of the scheme. The review of the scheme must also be considered in the wider context of how we as a society will fund long-term care in future.
It is acknowledged that there is insufficient provision of public long-term care beds to cater for our growing elderly population, with a resulting over-reliance on the public nursing home sector. This was acknowledged when my Department was preparing the national health strategy, and there is a commitment in the strategy to provide 1,370 additional assessment and rehabilitation beds as well as 600 additional day hospital beds. In addition, the strategy proposes the provision of another 800 extended care beds per year over a seven year period.
Patients are being sent all over the country because they cannot be treated. With the treatment purchase scheme they are being sent out of the country.
This will include the provision of long-term care beds for people with dementia.
Since my appointment as Minister of State with responsibility for services for older people, I have viewed that responsibility in the broadest possible sense, beyond matters of health, in that services provided and work done by many agencies and Departments affect the lives of older people. I am keenly aware of certain issues that have a detrimental effect on the lives of older people. In that context I established and chair the interdepartmental group on the needs of older people. This group provides the opportunity to exert a positive influence on the different services provided to older people.
Does that include the home help service?
This group is taking a cross-cutting approach to its work, with members speaking with authority on behalf of their Departments and having influence on their Department's policies on services for older people. The interdepartmental group also decided that the Department of Health and Children might take on the development of the equality strategy, incorporating all groups, including older people, and it was agreed that a number of strategy documents might be drawn together to satisfy the equality agenda.
Significant progress has been made and I am committed to the continuous development of our services through innovative and creative measures such as I have mentioned. My commitment to older people cannot be denied. It is through the efforts of previous generations that our economy and society are as healthy as they are today. Our success has been achieved by standing on the shoulders of giants and it is only right that older people are afforded the required supports for living in the dignity to which their immense contribution to our country's development entitles them.
I welcome and take some credit for the first step in establishing the principles for public service pensions. The Government agrees that the age for receiving a pension should generally be 65 and I appreciate the removal of the compulsory retirement age of 65 to allow older people to remain in the workforce should they so wish.
Why does the Minister not extend it to 75 or 80 while he is at it?
This is a particular interest of mine and one on which I have worked since my appointment. All the research and evidence shows that people over 65 who wish to remain in the workforce remain more independent, active and healthy. These measures should stimulate national debate on the subject of retirement age.
They will.
A submission from the Society of St. Vincent de Paul states: "In a year when Mick Jagger hits 60, Paul McCartney becomes a dad again at 61 and Brigitte Bardot turns a stunning 70, it is clear that growing old ain't what it used to be".
The Minister of State is right about that.
Is Brigitte Bardot a member of Fianna Fáil?
It goes on: "With longer life expectancy, better health and widening horizons, life in the slow lane seems to have really picked up the pace for a new generation." It also states: "There's a dawning realisation that society actually needs the enriching presence and participation of those who have seen what life has to offer – and survived to enjoy the ‘afters'." I am determined to ensure that older people continue to have an active, fulfilling and empowering role in our society.
The Deputy is beginning to sound like Arnold Schwarzenegger.
I join with the Minister of State, Deputy Callely, in his hymn of praise to the over-60s—
The Deputy should take it easy.
—although I would not like to suffer from some of the afflictions to which he referred.
Social welfare improvements in this year's budget will cost €630 million in a full year, a substantial increase of €100 million on last year's budget package. This should correct the misrepresentation that has been peddled about social welfare cutbacks. In the budget for 2004, the personal rate of disability unemployment benefit is increased by €10 to €134.80. Other key positive aspects of the budget include an increase of €28 per week in family income supplement thresholds, a €7 increase in the minimum payment, an increase of €835 per annum in the respite care grant from June 2004, and an increase in the widowed parent grant to €2,700 from budget day.
All our budgets since 1997 have been characterised by measures designed to improve the position of older people in society when it comes to pensions. Since the large increases of the early 1980s, their relative position had fallen back and they needed a sustained boost to lift them above the poverty level once again. Before the 1997 election we promised that, in Government, we would increase all old age pensions to at least €127 per week over our term. We delivered on that commitment and provided even more than that.
Before the 2002 election we promised to increase the State pension to €200 per week. The budget for 2004 puts us well on track to delivering this commitment. It provides for a €10 per week increase in the full personal rate of old age and related pensions.
What about a retirement age of 90? The Government would save money that way.
The number of social welfare recipients under the Minister's budgets now stands at a significant 975,000. In monetary terms the statistics are even more stark. The effect of the increases under Fianna Fáil is that the rate of old age contributory pension will now stand at €167.30 per week. Other pensions, for example, the over-66 widow's contributory pension and deserted wife's benefit, increased by €11.50 per week. In the budget for 2004, all other personal weekly rates increased by €10 per week. This benefits almost 1 million people who claim a weekly social welfare payment or 1.5 million when their dependants are included.
I am happy that this substantial increase will apply in full to more than 400,000 people on the lower rate of weekly social welfare payment. The increase is more than three times the expected rate of inflation. The payments affected include unemployment benefit and assistance, disability benefit and allowance, pre-retirement allowance, one-parent family payments, carer's benefit allowance and the supplementary welfare allowance.
The Government is committed to making substantial improvements in the income position of those on the lower social welfare rates in line with our policy, under Sustaining Progress, of achieving the income adequacy targets under the national anti-poverty strategy.
Building on the massive increases we have devoted to child benefit, this year we are announcing an additional €80 in the full year to increase further this vital support. Child benefit rates will increase by €6 per month for the first and second child and by €8 per month for the third and subsequent children. Mick Jagger, I suppose, will be applying.
If he was to wait for a pension from these lads he would be 102 before he gets it.
To appreciate the scale of child benefit increases under this Administration, it is worth emphasising that when we returned to Government in June 1997 child benefit was payable at the rate of €38.09 per month for the first and second children and €49.52 for the third and subsequent children. The increases and the greater priority Fianna Fáil has attached to child benefit mean that, following budget 2004, child benefit will be paid at the rate of €131.60 for the first and second child and €165.30 for the third and subsequent children. The rate of child benefit payment has increased by 3.5 times the figure it was on the day we first took office.
The budget increase is 21 cent per day.
I wish to share time with Deputies Gogarty, Cuffe, Connolly and McGrath. I want to refer to the Taoiseach's claim that the budget and the Government are not right wing and that they are acting in the interests of the less well off. I presume when the Taoiseach says the Government is not right wing – whatever about Fianna Fáil, the Progressive Democrats are not known for sitting on the fence in the centre – he must believe it is left wing. My understanding of a left wing budget is one that seeks to redistribute wealth with the objective of creating a fairer and more equal society. This seems to be at odds with the fact that the last six budgets of this Fianna Fáil-Progressive Democrats Minister for Finance, Deputy McCreevy have left us with the most unequal society in the European Union.
When I examined this week's budget I could not find any evidence of a radical left wing redistributive element, or any strategies to tackle the major inequities of our two-tier health and education system or the concentrated urban alienation and deprivation that produces the crime and drug problems that cause so much public concern. No strategy exists, even to bring Ireland's standard of social provision in education, health care and social welfare up to average European Union levels.
I felt that perhaps I was missing something, so I looked at an objective analysis of the budget by an apolitical group. I refer to the CORI justice commission's analysis and critique. It suggests that the Minister's budgetary approach will ultimately fail to address social exclusion. It points out, for example, that the Minister for Finance's claim that job creation is the appropriate goal if real social inclusion is to be achieved fails to recognise that almost 60% of those living in poverty are in households headed by persons outside the labour force. These people are retired, ill, have a disability that keeps them out of the labour market or they are on home duties. As they are not in a position to take up a job, the Minister's response to their situation adds insult to injury. CORI goes on to state that the poorest people have again been told to wait and that Ireland has the widest rich-poor gap of any country in the European Union. We should be ashamed.
CORI argues that if this Government's approach continues, this will be an even more deeply divided two-tier society. This situation, it says, is unjust, unfair, unacceptable and unsustainable. While Ireland's per capita income is now one of the highest in the EU, the country's infrastructure and social provision are far below the Union's average. Our unequal income distribution, growing rich-poor gap and under-equipped health and education systems represent the most visible signs of the extensive gaps in social provision.
The insufficient supply of social housing and the problems with public transport impact on poor people every day. In the context of continued economic growth, the opportunity to address these deficits remains available, but CORI argues that this Government has chosen not to avail of this opportunity. CORI says that the necessary money could be raised, not through income tax increases but by the elimination of tax shelters and tax handouts to the wealthiest in our society – as Deputy Joe Higgins put it yesterday in the House, the tax exiles, the stud farm owners, the property developers and the super-rich rock stars, among others. CORI concludes that ultimately the Government's choices in budget 2004 were based on its vision for the future, which maintains a deeply divided two-tier society in a period when we have the opportunity and the resources to provide for meaningful work, relevant education, essential health care and appropriate accommodation for everyone, where all can participate in shaping the decisions that affect them and where everyone's culture is respected and the environment protected.
The resources exist to build such a society but CORI maintains budget 2004 shows once again that the political will is missing. It seems to me that if a left wing budget is redistributive in nature with the objective of achieving a fairer more equal society, then this budget has failed miserably to even point in that direction. I have to conclude that either myself or the Taoiseach does not know the difference between right and left. No strategy is set out in this budget to tackle the inequity that leaves patients lying on trolleys in hospital corridors or that has thousands of children unable to achieve even a basic second level education. There is no strategy to tackle the alienation and deprivation of the urban wastelands where crime gangs rule. There is no attempt in this budget to ensure that the richest in our society should pay more towards providing sustainable social provision. There appears to be some sort of warped manoeuvre in the so-called savage 16 social welfare cuts to hurt the least well off even more.
Hear, hear.
That is not to mention the undermining of community structures in areas of disadvantage built up by community employment schemes, job initiatives and the social economy programme. Some 5,000 part-time jobs in community employment have been cut this year and 400 full-time job initiative posts. Even the supposedly ring-fenced community employment drug-related projects have been reduced from the commitment of 1,000 places to the current level of 822. Interestingly, the community employment cuts are disproportionately greater in the Dublin area which contains the largest concentrations of deprivation.
While I generally welcome the new rural social scheme, I notice that it is to be funded from the dormant accounts fund. I sincerely hope this will not mean any diminution in the priorities set out for that fund's disbursement board, namely educational disadvantage, persons with disabilities and economic and social disadvantage. Great expectations have been built up for this relatively small fund. I trust they will not be dashed yet again as they were in the RAPID debacle.
Leaving aside the decentralisation scam, probably the most cynical element in the budget is the €30 million to local authorities in a once-off grant to help keep the show on the road, to avoid temporarily the massive increases in local charges until after the local elections on 11 June.
Debate adjourned.