Dáil Éireann debate -
Tuesday, 20 Nov 2007

Adjournment Debate.

Tax Code.

Deputy Paul Connaughton

The decision by the European Union to remove a refund of almost 3.5 cent per litre of fuel used in passenger transport services will have a detrimental effect on private bus operators in rural areas and the passengers who use their services. It will also add to the cost of bussing children to school. The EU derogation which was sought by the Government will be discontinued at the end of the year. Some of the people involved in the business report that the decision will put an additional burden of up to 10% on their costs. The users of the services will have to pay for this.

Problems also arise in respect of private bus owners. While this rebate will apply to Bus Éireann as well as to private carriers, many bus owners believe the level of subvention given by the Government allows CIE companies to mask the loss of the rebate whereas the full cost will be met by private operators. I do not need to tell the Dáil what will happen if competition is removed from the sector because we all know what private operators have done for bus transport. Had they not existed, the cost of travel would be much higher.

One of the criticisms made by private bus operators is that they only read about the decision in last week's edition ofThe Sunday Business Post. For whatever reason, it was one of the most closely guarded secrets in the country. It is hard to understand why the Government did not ensure the operators received adequate notice because the people directly in the eye of the storm should have been informed. I call on the Minister for Transport to delay the decision for at least a year.

Deputy Jimmy Deenihan

The Government's intention to remove fuel rebates on school contract work from 31 December 2007 came to the attention of private bus operators through an article inThe Sunday Business Post on 4 November 2007. The announcement, which came out of the blue, places private bus operators in a difficult financial situation, especially in light of enormous increases in fuel prices. Operators are in the middle of a contract agreement with Bus Éireann and the withdrawal of the fuel rebate puts them in a no man’s land because the rebate was used as a bargaining tool when negotiating the contract. The usual response from Bus Éireann was that operators would always have the fuel rebate. The fact that the company knew about the imminent removal of the rebate further infuriates the private operators, who were aware that the prices agreed were for a period to June 2008 and based on receiving 3.4533 cent per litre of a refund for fuel consumed on each contract.

I received a number of letters from operators, one of whom states:

We presently employ eight school bus drivers on our payroll and transport approximately 550 children daily to and from school. The impact that this withdrawal will have for us will be devastating as we now have to operate for six months of 2008 without the rebate which we based our figures on initially, and which Bus Éireann allowed us do, knowing full well that it was to be withdrawn. This is coupled with the fact that we had to absorb the costs of the seat belt changes over the last few years but these were for the overall good of the school transport system unlike this present problem which will inevitably push operators out of the business. The long term issue will be who will transport children to and from schools in the 2008-09 school year.

Another operator wrote:

All of my prices and contracts for 2008 are based on this fuel rebate and they cannot be withdrawn. My business will fail. I do not know what I can do now with such short notice and I plead with you to make the strongest representation on my behalf to have this decision at least postponed to allow me seek alternative arrangements. I have been put at a serious disadvantage also, as the State company, Bus Éireann, were made aware of the removal of this rebate last year. I employ two people and carry approximately 70 kids to school each day. The removal of this refund, 3.4533 cent per litre, will make my business unsustainable and I will be forced to cease trading.

Another operator wrote:

All of my prices and contracts for 2008 are based on this fuel rebate and they cannot be withdrawn. My business will be severely disadvantaged. I don't know what I will do at such short notice and I plead with you to make the strongest representation on my behalf...I employ 20 drivers on a part time basis, and run numerous amount of tours from March to November each year. The removal of this refund, 3.4533 cent per litre, will make my business unsustainable and I will be forced to lay off workers earlier in the season, and I might even be forced to cease trading.

I urge the Minister to postpone the decision until June, when the contract ends. That is reasonable.

Deputy James Bannon

I join my colleagues, Deputies Deenihan and Connaughton, in highlighting the need for the Minister for Transport to outline his plans to alleviate the hardship caused by the sudden removal of the refund of excise duty on fuel used in passenger transport services, which will seriously impact on the private transport industry and lead to increased fares and the closure of many businesses.

It is outrageous that a plan to remove a tax relief worth €29 million to public and private bus operators in order to comply with an EU directive should be kept from the private bus industry. Every effort was made to keep them in the dark. Shame on the Minister and his colleagues for creating a situation whereby private operators accidentally discovered that the rebate was to be removed. So much for transparency and openness. The Minister has placed the private transport industry in a grave situation, yet the Government is once again hiding its head in the sand.

I have been approached by a number of private bus operators in Longford-Westmeath who were devastated by the news which came to them by rumour rather than direct communication from the Government. Of course, the Government did not fail to make the situation clear to CIE, which has the ability to hold an entire city to ransom. The private sector is the only sector that will suffer from the removal of the refund of excise duty on fuel used in passenger transport service. The removal of the tax relief will be cost neutral to CIE and the Exchequer but the private transport sector will bear the brunt as its costs cannot be absorbed. Many companies will be forced out of business. They were not even given the courtesy of official notification by the Government. These companies have benefitted from the lower rate of excise duty of 2.3 cent per litre of fuel compared with the EU's minimum rate of 30.2 cent. Removal of tax relief will result in an increase in the price of a litre of diesel and impact on operational costs, which will be reflected in increased fares and excessive operational costs. Can the Minister of State even begin to imagine the panic among private bus operators who have already signed contracts for 2008, having agreed rates for schools and set fare levels on scheduled services which reflect the refund of excise duty? Much of the fault lies with the usual passing of the buck between Departments. The Department of Finance has stated that the EU viewed the fuel excise derogation as a form of state aid and there is now no tax solution. It has transferred the matter to Transport where, if there is any justice, it will force the resignation of the Minister — it is more likely to fade from sight.

The removal of tax relief would be a death sentence for private coach operators and would deliver an appalling blow to rural communities, particularly those in remote areas who do not have regular public services and rely heavily on private coach companies. Shame on the Minister.

Minister of State at the Department of Enterprise, Trade and Employment (Deputy Michael Ahern)

I speak on behalf of the Minister for Transport. The Government is aware of the importance of the fuel duty rebate scheme for passenger bus transport services. The current scheme is a matter, in the first instance, for the Minister for Finance and the Revenue Commissioners.

The background to this issue is that the 2003 EU energy tax directive incorporated special derogations which allowed specific excise duty reliefs to be applied in a number of members states. In the Irish context, these derogations allowed for reduced rates to apply to fuel used for scheduled public and private bus services and bus tour services. While the derogations expired on 31 December 2006, Ireland and other member states sought retention of their derogations beyond that date. However, the European Commission, the deciding authority, has refused all such requests. The Commission maintains that, in keeping with the EU energy tax directive, member states must apply at least the EU minimum rates of excise on fuels in such circumstances and any further favourable excise treatment is not allowable. The Commission's decision was published on its website in March 2007. I understand the Minister for Finance will avail of the forthcoming Finance Bill to provide for the necessary legislative changes to conform with the directive.

As I stated, the Government is aware of the importance of the fuel duty rebate scheme for the passenger bus transport sector. With this in mind officials from the Department of Transport are engaging with officials from the Department of Finance to explore the possibility of replacing the scheme, where appropriate, by alternative non-tax financial support mechanisms to achieve the same policy objectives, subject to EU state aid requirements. I understand that in the interim the reduced rates applicable to fuel used for public transport services will be maintained.

Foreign Orphanages.

Deputy Michael Kennedy

I thank the Ceann Comhairle for allowing me to speak on this topic concerning orphanages in Bulgaria. Although not immediately significant to this Parliament, this is an incredibly important and tragic issue which requires the greatest possible airing.

Some Deputies may have seen a BBC documentary on Sunday entitled "Bulgaria's Abandoned Children". It was made by film-maker Kate Blewett who last year visited the Mogilino social care home to investigate the conditions in which the children are kept. I am not exaggerating when I say that this is one of the most disturbing programmes I have ever seen. The circumstances shown in the film appear to be replicated throughout Bulgaria and I understand similar conditions obtain in at least 11 other orphanages.

I bring the issue to the attention of the House to ask what we can do. I cannot sit idly by without trying to publicise this issue. There are 75 children living at Mogilino, ranging from toddlers to teenagers approaching their 20s. Many have been abandoned to the orphanage because they have severe mental disabilities with which their parents simply could not cope. Others are affected by mild and treatable cases of cerebral palsy. Some were blind or deaf when they entered the orphanage. Many of the children at Mogilino cannot speak and they are neither taught nor spoken to. They cannot interact with each other or their carers whose job does not appear to extend beyond washing and feeding the children. It is clear that not much caring takes place.

The children are considered incapable of being educated and receive no treatment for their disabilities. While they are diagnosed on admission to the facility, their diagnoses are not re-evaluated at any point during their lengthy stay. Even the children with the mildest forms of disability degenerate quickly. They rock endlessly in chairs, bereft of any mental stimulation, and many are heavily sedated. They all appear to be malnourished and many sit on potties all day because it is easier for their carers to leave them in this position. Their limbs resemble those of children in famine-torn African countries.

One 18 year old girl who broke her leg was filmed lying curled up in a ball in bed. Her condition was not noticed until the television crew asked her what her problem was and only then did she received medical attention. Another child, a young boy, walked only when led by the hand by a carer. If the carer moved away from him, he stood motionless until the carer returned.

An 18 year old girl named Didi who has mild cerebral palsy initially wrote letters to her mother but these were never posted. She also interacted with the television crew in a typically lively teenage fashion. However, when the television crew returned eight months after initially meeting her, she had become a mute child who had adopted the rocking motion practised by all the other children. I was equally concerned by a scene in the programme where two male carers supervised a group of adolescent women, many of whom were fully developed physically, as they showered. This occurred in a home staffed almost entirely by females.

It is not an exaggeration to say that domestic animals are treated better than the unfortunate boys and girls in the Mogilino home who are condemned to rock silently while they slowly waste away in mind and body. Nothing on television this year has brought me closer to tears.

What can Ireland do about this case? How has Europe permitted this to happen while allowing Bulgaria to enter the European Union? Will we turn away from this pain and suffering? I hope not. We all remember watching similar scenes from Romania 20 years ago. The scenes I describe are taking place in 2007 in Bulgaria, a member state of the European Union. I ask the Government to take action in this matter. It should contact Ms Kate Blewett who is setting up a charity known as Bulgaria's abandoned children's trust to campaign for immediate changes to address the plight of the children in the Mogilino orphanage. Bulgaria is a European country with a population of more than 8 million in which one in every 50 children is growing up in an institution. As Kate Blewett stated in the television programme, it is not a destitute, war-torn or famine-stricken country. Many of the large number of Irish people who visit Bulgaria as tourists buy apartments there. Our role must be to try to influence the Bulgarian authorities and, more important, the Bulgarian people. I sincerely hope action will be taken on this issue.

Minister of State at the Department of Education and Science (Deputy Seán Haughey)

On behalf of the Minister for Foreign Affairs, I share the deep concern and disquiet provoked by the recent BBC documentary "Bulgaria's Abandoned Children". The large number of children resident in state-run institutions in Bulgaria is a difficult legacy of past policies and attitudes. This sad reality must now be addressed and further reforms must be made to protect a particularly vulnerable section of society.

The Bulgarian authorities have been working on the issue for some time. It was a topic of concern that formed part of discussions during Bulgaria's negotiations for EU accession. While some progress was made before accession, concerns were expressed by the European Commission and member states regarding areas where further actions are required. In particular, concerns have been expressed regarding living and sanitary conditions in many institutions. The Deputy can be assured that the EU continues to support the process within Bulgaria to reform this sector. Next year, some €5 million of EU Structural Funds will be directed towards the development of alternative care arrangements for children such as those featured in the documentary.

We have been told that the Bulgarian Ministry of Labour and Social Policy is committed to closing the institution mentioned in the documentary and similar ones that still exist in Bulgaria. Since 2001, the number of children in them has decreased by over 30% to approximately 8,500. Of course, this figure is still too high. Ideally the type of care to be provided involves finding relatives or foster families to look after these children. Placing them within a safe, reliable and family oriented environment must be the goal. This need is recognised by the Bulgarian authorities.

A group of non-governmental organisations, working together with UNICEF, the Bulgarian Association for the Protection of People with Disabilities, and the Bulgarian authorities, have drawn up an action plan to deal with the situation at the Mogilino institution. Medical evaluations of the children have been carried out and a group of specialists have provided some basic training to the staff. They plan to assess the needs of the children and provide an alternative form of care. The orphanage will be closed and specialist care provided by the creation of smaller group homes.

A special screening of the documentary took place in Sofia last week and was attended by a representative of our embassy. Attendance at the event also included representatives of the Bulgarian Government, members of civil society, academics, social workers, journalists and foreign diplomats. Children with disabilities and their families also attended. Following the screening of the film, there was wide-ranging debate on the issue. There was general recognition that a quick-fix to the problem is not realistic and that closing the particular institution in question immediately would simply shift the problem elsewhere.

The solution must be well thought out, lead to change across the system and have the interests of the children as the driving force behind it. I understand that contributions made by representatives of the Ministry of Labour and Social Policy, and the Ministry of the Interior, indicated their strong support for continuing to work with the NGO sector to bring about real change.

Our embassy in Sofia has regular contact with organisations working to improve the living conditions of the children and young adults in such institutions. A number of Irish citizens and organisations are also involved and the embassy supports them in their work where possible. Over the past five years, the Government has supported NGOs active in Bulgaria in the protection of children at risk and the rehabilitation of people with intellectual disabilities. Organisations supported include the Bulgarian Association for People with Intellectual Disabilities.

The Deputy can be assured that we will continue to remain engaged and to encourage the implementation of the important reform process. Our embassy has been instructed to seek a meeting at senior level with the Bulgarian Ministry of Labour and Social Policy to convey our concerns and to get an update on the situation. It will also inform the Bulgarian authorities of the strong public interest in Ireland, and across the EU, in seeing a dramatic improvement in the standards of care given to orphaned or abandoned children in Bulgaria.

Schools Building Projects.

Deputy Pat Breen

I am delighted to have the opportunity to raise this important issue and to see the Minister of State at the Department of Education and Science here. He can imagine the frustration and anger of the board of management of Ballyea, given the fact it has spent almost €200,000 on a temporary site and should have had prefabricated portacabin buildings in place for September.

The first application for a new school in Ballyea was made approximately eleven years ago and the board has worked hard since to get that school in place. I will not go into the history of the application because the Department has that information. However, I want to hear tonight when the construction of this badly needed school will commence. I do not want to hear that all building projects have been put on hold while waiting confirmation of the budget allocation from the Department of Finance.

The Ballyea project had gone further than any other project. I raised the issue in a parliamentary question last week and was told the tender report was currently under examination, but my information from the Department is that the tender report has been approved and a contractor has almost been appointed. Somebody is misleading someone with regard to the Ballyea project and the result is that nothing has happened since last September with regard to the putting in place of the temporary school that should have been set up. The local board of management has entered a lease agreement with the local GAA club for 12 months for the use of the car park, facilities have been put in place and €200,000 has been spent, but nothing has happened with regard to provision of the buildings. The board is frustrated and angry about this and has been in constant contact with the Department in an effort to find a resolution.

Deputy Carey and I want confirmation of a date from the Department tonight as to when the project will commence. It should have begun in September, but unfortunately it did not. Is it the case that the Department has overspent and there are no further funds? If so, why was a supplementary budget not put in place to meet this demand? I am angry about the situation and want a commencement date from the Department.

Deputy Joe Carey

Ballyea national school is in my parish. The current school was designed to cater for three class groups, essentially 75 to 85 pupils. As of September 2007, the school has 159 pupils. There is an overcrowding crisis in the school. Ballyea is a rapidly expanding area on the outskirts of Ennis and has a genuine need for a new school. The board of management, parents, staff and children first submitted an application for extra school accommodation eleven years ago.

After many delays, the new school got full sanction from the Department of Education and Science. This decision was greeted with delight by the residents of Ballyea. The promise of a new school made it easier for staff and pupils to continue to deal with the dreadful overcrowding problems. The development of a new school requires the demolition of the existing school and temporary accommodation must be provided. The local GAA club has given permission for the use of its car park for the development of the temporary accommodation.

Now, however, the news has come that funding has been suspended. To date, €200,000 from the public purse has been spent on the development of the temporary site. The board of management of Ballyea national school has been in constant contact with the Department to get final approval for buying the portacabins, but it has encountered major problems. I want some good news for my fellow parishioners and the people of Ballyea. Will the Minister of State inform us tonight that funding will be provided immediately to Ballyea? It is outrageous that this project has been put on hold. We have been waiting eleven years for it to come to fruition. Give us the money and let the project proceed.

Deputy Seán Haughey

I thank the Deputies for giving me the opportunity to outline my Department's position regarding the provision of a new school premises at the location referred to by them. The proposed project involves the construction of a new two-storey eight classroom generic repeat design school, preceded by associated decanting works to facilitate the main project. Planning permission and a fire certificate have been obtained and the tender report for the project is being examined by my Department's building unit.

Under the National Development Plan €4.5 billion is assigned to the capital requirements of the primary and post-primary sectors. More than €540 million will be spent this year on school buildings. The level of construction alone in the primary and post-primary sectors in 2007 is such that it will deliver more than 700 classrooms to provide permanent accommodation for approximately 17,500 pupils. The progression of all large-scale building projects from initial design stage through to construction is considered on an on-going basis in the context of my Department's multi-annual school building and modernisation programme in which the main focus is to deliver school places within rapidly developing areas. The progression of the school referred to by the Deputies will be considered in this context, as is the case with all large-scale projects.

I assure the Deputies that the Department is committed to providing suitable high quality accommodation for the school in question at the earliest possible date.

Deputy Joe Carey

There is no answer in that. Will the Minister of State give the money?

The Dáil adjourned at 9.05 p.m. until 10.30 a.m. on Wednesday, 21 November 2007.