Is that agreed? Agreed.
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).
Mr. Morgan: I propose to share my time with Deputies Finian McGrath and Gogarty.
An Leas-Cheann Comhairle
My party colleagues have addressed the broad implications of the budget for 2004 and I will make some general points before concentrating on the specific issue of housing.
There has been a budget every week for the past 18 months with the announcement of stealth taxes on a daily basis, never mind a weekly basis, and the concept of an annual budget is almost a thing of the past. This year we had a particular rabbit pulled out of the hat with the trick of decentralisation. We were told that this was a major budgetary announcement but it was nothing short of a rabbit out of the hat and an illusion or trick to deflect people's concentration from the ridiculous project announced in the budget. I note that the Minister for Finance managed to refer only to what he would regard as the better items in the budget. He did not bother referring to some of the serious cutbacks in the Book of Estimates.
Decentralisation is itself a misnomer. It connotes the concept of devolving Government to either local government or some type of authority in the regions. Nothing could be further from the truth. We know central government has been taking powers from local authorities. We have seen that with planning regulations and levies and waste management plans. This means that, far from decentralisation taking place, the opposite is happening under the current Minister for the Environment, Heritage and Local Government and has happened under his predecessors.
What is happening is a relocation, which in itself is dubious. While I support the concept, I question the sincerity of the Government's announcement because apparently there has been no planning for this relocation. No budget has been announced for it save that we are told that, for any buildings to be built wherever the relocation is happening, buildings in Dublin must first be sold to provide the necessary money. Is that budgeting? It leaves a lot to be desired.
Cock-up might not be a parliamentary term, but the greatest catastrophe of all in the relocation process is that the unions involved have not been consulted about their members going—
The Deputy will be surprised.
They say they were not consulted and various Ministers have said they did not consult civil servants. The unions involved have all expressed considerable alarm at the announcement. It is time the rabbit was put back in the hat so that the Government can get on with the serious work at hand. That is much more important than carrying on with this nonsense.
The budget represents an attack on the poor. The social welfare cutbacks amounting to €58 million announced by the Minister of Social and Family Affairs will widen the gap between the rich and the poor. Social welfare increases and alleged tax benefits for the lower paid have been eaten up by welfare cuts and stealth taxes. Child benefit will increase by a mere €6 per month while 300,000 children live in poverty, which is a scandal. The poor and low paid will also suffer because the lowest ever proportion of the population is eligible for a medical card. What has happened to the Fianna Fáil pre-election promise to include an extra 200,000 people in the general medical services scheme? We all know how it stands but no Minister or Government backbencher has shared the answer with us.
The budget has failed to tackle the inequality in the taxation system. The Minister did nothing to target the highest earners or to tackle multimillionaire tax exiles or tax evasion. More people will pay the higher rate of income tax following the budget. A total of 60,000 workers on the average industrial income will be liable to pay tax at the marginal rate of 42%, the same as if they were millionaires or super earners. Stealth taxes are announced on a daily basis in the form of bin charges, planning levies or hospital charges.
I would like to correct the record of the House which was distorted by the Minister for Justice, Equality and Law Reform last week. During the debate he grossly misrepresented Sinn Féin's policy on taxation. He deliberately stated Sinn Féin was seeking to increase the top rate of taxation to 50% to create the impression that all workers who pay the current top rate of 42% would pay 50%. This is completely and calculatedly false. Sinn Féin has called for a new top rate of 50% for people with an income in excess of €100,000 per annum to ensure the highest paid will contribute their fair share. The Minister knows this well but he could not resist the temptation to put the boot in, even if this meant distorting the facts.
The budget will do nothing for people attempting to house themselves and their families. What is in the budget for the 48,000 people on housing waiting lists, 85% of whom have an annual income of less than €15,000? What has it done for the 5,581 homeless people in the State? The Government has chosen to attack rent allowance for the second consecutive year and this will result in an increase in homelessness because vulnerable people cannot get into the private rented sector. It is a year since the Government abolished the first-time buyer's grant, leaving people in that category much worse off. This measure should have been reinstated in the budget and should have been applied to both new and second hand homes.
The failure to address the problem of local government funding will also exacerbate the housing crisis. Local authorities are imposing significant development charges, which are passed on to new house buyers, because local government is not properly funded and this makes houses increasingly unaffordable.
A number of local authorities are seeking to get out of housing provision, even though it is one of their core functions similar to the provision of water and sewerage schemes. That also says a great deal about so-called decentralisation. The Government's once-off increase in local government funding will do nothing to tackle deficiencies in such funding, which must be addressed as a priority.
It is seriously questionable that the budget does not provide for the ending of tax relief for speculative buyers of second homes and the restoration of capital gains tax to its 1997 level of 40%. The budget shamefully fails to make adequate funding available to increase the total social housing rental stock and to bring about the reduction and elimination of housing waiting lists. The Government thinks such lists and the major difficulties associated with the affordability of houses are an acceptable part of life for the disadvantaged. This regressive behaviour is an absolute scandal in this day and age and should be addressed.
A host of stealth taxes is introduced on a daily basis and the concept of an annual budget is a thing of the past. It is unfortunate the Government did not at least live up to its pre-election promises, particularly in regard to medical cards, which fooled the people into electing it.
I thank Deputy Morgan. The budget was a clever act of deception as with no hands the Government kept its hand on the coloured handkerchief of decentralisation while it withered away people's quality of life and returned no more in benefits than it took in taxes. The Government mesmerises us with facts and figures about increases in social welfare and the widening of tax bands while the magician, Deputy McCreevy, attempts to grab the wealth by stealth. If one is wealthy, he will make one richer. The increases contained in the budget mean Deputies will receive as much as the low paid. The Minister can normally be relied on for razzmatazz. However, times are getting tough and, at the end of the show, more people will pay tax with no tangible return in terms of their quality of life. The less well off are in the cheap seats and they will be left on the scrap heap at the end of the performance, hopefully in 2005 rather than 2006 or 2007.
It will be 2007. We will perform our duties.
This colourful distraction is full of holes. The entire decentralisation programme bears no resemblance to the national spatial strategy. Its intention is to relocate central Government to areas where Ministers can claim to have delivered. A total of 130 Irish Prison Service employees will move from Clondalkin to Longford, even though only one person from Longford works in the service. Deputy Sexton can claim a victory like Deputy Parlon while the Tánaiste and Minister for Enterprise, Trade and Employment will hope her personal popularity protects her from a backlash.
The Green Party supports decentralisation but this is anything but and is only a distraction. This mediocre budget contains no vision, compassion or decrease in the gap between the rich and the poor. My pet cat, Fluffy, has more compassion in her hind paws than the budget or this sad Government. This is a holding budget as the Minister waits for give-away budgets prior to the election in 2007.
That is terrible guff. The Deputy should be ashamed of himself.
With regard to my portfolios, the proposal on section 481 is welcome. However, I also welcome the increase in funding for schools building projects and multi-annual funding for capital projects. The Green Party proposed the allocation of €2.5 billion over four years. This is a greater allocation, which is index linked to inflation. The issue is whether investment will generate both economic and non-economic returns.
More funding is required so that the National Educational Welfare Board can operate fully and efficiently. The National Youth Council of Ireland stated the budget bypasses young people and raises serious questions about the Government's commitment to them. The Government made a number of commitments under Sustaining Progress, for example, which have not been honoured in the budget. The NYC sought an increase of €5 million but received only €1 million extra.
Rent supplement will be refused to people who have not rented for six months and lone parents are discriminated against. For example, people in receipt of one parent family allowance or widow's pension are still expected to pay employee PRSI contributions while the one year half rate for one parent family claimants and the half rate child allowance have been withdrawn. Unemployment benefit has been reduced from 15 to 12 months and the dietary allowance will be phased out over a number of years. This will not be a problem if one is a Member of this House and a coeliac. However, it is a major problem if one is on social welfare.
The crèche supplement to cover emergency child care will be discontinued. There are also community employment and JI cutbacks. Given that I will raise those issues on the Adjournment, I will elaborate on them at that stage.
There are no cutbacks. There will be an additional 3,000 jobs in the rural employment scheme. This kind of blatant propaganda is an abuse of procedure.
It is a cutback in real terms. I will discuss it later because I want to share time with Deputy Finian McGrath. I wish to refer to CORI's Justice Commission's, analysis and critique. CORI stated there has been a dramatic widening of the gap between rich and poor and pointed out that the gap is now €294 per week. That is a harsh criticism from an independent body.
Is the Deputy citing CORI? Will he ask it to pay more to victims?
The increase in child benefit is a mere 10 cent a day and we also have housing issues. The Minister of State can criticise all he likes in his contribution. It could have been a positive budget and tax credits could have been made available.
There is an argument that Government should tax and spend – that it should increase income tax to pay for services which will have long-term benefits. If the Government was honest, there might be some merit in the argument. Let us consider, for example, the issue of green taxes and Government obligations under the Kyoto Protocol. If the Government examined the situation it could reduce income tax and employers' PRSI and increase green taxes instead. This would increase economic competitiveness and have a neutral impact from a budgetary point of view.
I raised the issue of the public's faith in the political process before but was accused of being a hypocrite. Today I wrote to all Deputies on a matter I feel compelled to raise once again, namely, PPP – politicians, pay and perception. When I described the pay and expenses of Oireachtas Members as a urination on the less well-off, I was not being facetious. I was trying to be polite because the cutbacks in real terms are an issue when we seem to have double standards in terms of our pay and expenses. I do not in general disagree with the benchmarking process being tied in with the pay of senior civil servants but it is higher in real percentage terms.
The public perception of politics has never been lower. There are double standards for those who walk through the corridors of power compared to those who kick their way through broken bottles and syringes in less sheltered areas. This perception is exacerbated by the extremely lax system of expenses, where I can sit at home, butter my toast, fill in a form and claim €61 a day without a check. I stated the matter before and will not go into it now. However, as long as we have this perceived unfairness, the fat cat tag for politicians will remain.
We know the hours required by the job. The Minister of State is a prime example of an excellent Deputy who works long hours and whose non-sitting days are as busy as sitting days. The public do not understand this and are influenced by media reports which correctly highlight the lack of days spent considering legislation but sometimes wrongly imply that the rest of time is spent doing nothing. I was rooting for some of the Fianna Fáil Deputies on "Liveline" with Joe Duffy. The criticism is fuelled by the public knowledge that while our long hours are reasonably well rewarded, they are topped up by generous expenses, some of which do not have to be vouched for. We are accepting our benchmarking award increases at a time when others are suffering and insulting those struggling through no fault of their own.
I disagree with Members of the Seanad who wasted their Order of Business time by attacking me personally in an over the top defence of their pay and conditions. They protested a little too much but failed to put up a coherent argument. I agree that I sometimes wear an open-necked shirt, am still relatively young and may just fall into the category of "gentleman". However, that has nothing to do with real debate. An opposing argument eloquently put deserves some respect. Given the array of talent among the group concerned there was no eloquence, only insults which are like water off this green duck's back. Further discourse is needed.
Deputy Fiona O'Malley has been quoted as saying that we need more visible parliamentary productivity from these Houses. I fully agree. In the absence of such productivity, we should give up our increase, collectively, as a gesture towards those who earn less in a week on social welfare than we get in unvouched for expenses for turning up for work. I call once again for a voluntary pay freeze and tighter expenses. I will write to the Committee on Procedure and Privileges in this regard. The lax expense payments speak for themselves but more motivation is needed with regard to our pay increase.
Despite stating that collective argument would be preferable, it seems that money must be put where the mouth is. Although, on principle, I have given up €12,800 and the sweetener for giving up the dual mandate, I am still being accused of hypocrisy for not forgoing my benchmarking increase. Therefore, I am announcing that I will give up my benchmarking increase. However, I will not give it to the Exchequer but to those organisations affected directly by the cutbacks. I urge other Members to do the same, particularly Deputy Fiona O'Malley who indicated in the newspapers that she might give up her increase. However, on Newstalk 106, the Deputy said something different. I ask her to clarify this issue.
We need to increase the goodwill of the public towards politicians. Local elections are on the way. The Government may, perhaps, hope that the low turnout will continue and the same old die-hards will vote its people in where communities such as south-west Clondalkin are ravaged by cutbacks. I will elaborate on that issue in the debate on CE. I ask other Deputies and Senators to consider forgoing their benchmarking pay rise as a gesture to those who are less well off. We are approaching Christmas and although it is a bit of a cliché, I hope some of the Christmas spirit will emerge. When everyone else has to make sacrifices, Deputies and Senators should do likewise.
I have sat and listened to a lot of talk and nonsense over the past few days about a fair society and a budget based on equity. If we examine the details closely we can see it is neither a fair nor caring budget. This is a budget for the well-off. There is a cosy consensus around this House, and in broader political circles, that the Minister for Social and Family Affairs, Deputy Coughlan, for example, is doing a good job. I strongly disagree.
Let us look at the facts. This is not a caring budget and the €1.50 a week increase in child benefit is derisory as it is just 21 cent a day. That is a disgrace. Basic welfare increases are not generous. There is no increase in child dependant allowance, families are still stuck in the poverty trap and there was no attempt to abolish the means test for the carer's allowance. Despite the fact that carers save the State approximately €1.6 billion, they are treated with contempt. Only an extra €25 million was provided for disability whereas Punchestown got €15 million. Most people campaigning for funding for those with intellectual disabilities wanted €35 million. This has happened at a time when we have 1,382 people on residential waiting lists, 621 seeking day care places and 823 families waiting for respite care.
Let us remind ourselves again of what the Minister provided. She gave 21 cent a day in child benefit. The Government claims to be pro-family and children yet backbenchers dance up and down on the issue of stem cell research while 70,000 children live in extreme poverty. It is about time this Government began to live in the real world.
We have also seen pensions cut for new recruits to the Civil Service. We will now have a two-tier Civil Service. Young people have been bypassed by budget 2004. We see 5,000 young people drop out of our education system each year and 1,000 young students do not make the transfer to second level. Educational disadvantage was ignored in the budget and we now have a situation where approximately 1,800 children are seriously at risk. We could have done with an extra €20 million for educational disadvantage.
There is a lack of planning in this budget. It lacks a vision for the future and shows the direction in which the country is heading.
It is not often that as a Government Deputy or a member of Fianna Fáil, I get to quote Kevin Myers with approval. In today's edition of The Irish Times he writes of the Minister who introduced this particular measure and states:
Our wealth has been created by opting for an open economy, with low taxes and a flexible, intelligent workforce – 100,000 of whom will change jobs this year. We have the most open economy in the world, and we have in Charlie McCreevy the most successful Minister for Finance in the history of the State; indeed, the most successful in all of Europe.
That speaks volumes about the credit people are prepared to give this Government for the enormous changes the Minister and the Government have introduced, not just with this seventh chapter in his ten chapter book. I welcome his pledge to deliver another three budgets in the lifetime of this Government.
This has been a reforming Government, as was its predecessor. Far from being harsh, this budget is redistributive. It redistributes income from middle and higher income earners to those who are on no income or on very low incomes. Upwards of 30,000 people are being taken out of the tax net and will pay no tax as a result of this budget. Neither of the two previous speakers referred to the fact that those on social welfare will receive increases of 6% to 8% when the inflation target of 2.5%. That is a fantastic achievement.
I am proud to be a Member associated with this redistributive left-wing Government that has introduced this budget. It is the first tangible sign that economic recovery is under way, and I look forward to it being fully delivered over the next three years in the run up to the next election.
Debate adjourned.