Adjournment Debate.

Tax Code.

Deputy Joe Carey

I thank you, a Cheann Comhairle, for allowing me to raise this important issue.

The hospitality industry is in free-fall, with hotels closing and jobs being lost. The Government, however, has done nothing to stem the tide. In fact, the Minister for Finance's travel tax will make this horrendous situation even worse. If the travel tax goes ahead as planned, Ryanair has warned that it will reduce flights to and from Shannon from 30 March. Last year Ryanair accounted for 60% of all traffic through Shannon airport, carrying 1.9 million passengers to and from 30 different destinations. In recent weeks Ryanair has said it will have no choice but to reduce its Shannon-based aircraft from six to four this summer. It will also reduce from 30 to 25 its route network at Shannon. Ryanair's weekly Shannon service will be reduced from 136 flights to 116. These cuts will mean a reduction of 700,000 passengers using Shannon airport this year. The mid-west region, including County Clare, can ill afford this loss.

I spoke with Ryanair's chief executive, Michael O'Leary, two weeks ago and he informed me that his company would reverse its decision on these cuts if the Government scrapped the flat €10 travel tax. The average price of a Ryanair flight is €10 during the winter months and, in effect, the Minister is imposing a 100% travel tax on Ryanair passengers. There is no fairness or equity in this tax, which must be either scrapped or introduced as a scaled percentage on the price of the flight ticket. It is simply not right or fair to charge a passenger travelling to America the same tax as one travelling to London.

Earlier today the Minister for Finance announced that airports in this State which had less than 50,000 departing passengers in the previous calendar year will be exempt from the travel tax. This is positive news for airports in Donegal and Sligo. The Minister's statement, posted on his Department's website, states:

Concerns have been raised regarding the impact the air travel tax could have on small peripheral airports and their ability to develop new routes. The importance of such airports to the local area has also been stressed. I indicated that I would take the matter into account and reflect on it.

Shannon airport is the key economic driver of the mid-west region. We too have major concerns about the flat €10 travel tax, as it will have a devastating impact on our economy. The travel tax has placed in jeopardy Ryanair's €400 million investment in Shannon airport. Some 100 direct jobs and 700 indirect jobs will be lost at the end of March. The lost revenue from 700,000 fewer passengers will place further pressure on retailers in County Clare who are already reeling from the effects of the recession. The tourism industry is being thrown to the wolves by this tax. On a practical basis, it will mean fewer bed nights, fewer coaches, fewer taxi fares and fewer meals in restaurants.

I plead with the Minister to reflect on this damaging tax, as he has done for other airports. He should consider the immediate dire consequences the tax will have on the mid-west region, including Shannon airport. Let the Government put balanced regional development first. The Minister should either scrap this tax for Shannon airport or introduce a fair tax based on a percentage of the cost of flight tickets. The Minister should not lose sight of the fact that we are an island nation.

Minister of State at the Department of Enterprise, Trade and Employment (Deputy John Moloney)

I am pleased to take this opportunity to clarify matters relating to the introduction of an air travel tax that the Minister for Finance announced in budget 2009, which will come into force for passengers departing from Irish airports as and from 30 March 2009. The Finance (No. 2) Act 2008 confirms the introduction of an air travel tax from 30 March 2009. The general rate applying will be €10 per passenger, with a lower rate of €2 for short air journeys. The Minister, however, took account of concerns raised by the regional airports, particularly those on the western seaboard.

The lower rate of €2 will apply to departures from any Irish airport where the destination is 300 kms or less from Dublin airport. This means all Irish departures to locations such as Manchester, Liverpool and Glasgow will be subject to the €2 rate. The Minister has also decided that a relatively short air journey should reflect a lower charge. It is not unusual for the price of fares for longer journeys to be higher than those for shorter journeys and the tax reflects that position. The Minister was also conscious that the tax would apply to both the outward and return journeys in respect of domestic flights. In addition, the Minister was cognisant of the greater competition that exists from other forms of travel for that sector relative to longer flights.

Ireland is not unique in applying a tax on air travel. Many EU member states and other countries worldwide apply similar taxes. For example, our nearest neighbour, the UK, has applied a similar tax for several years. Currently, the UK applies an air passenger duty of £10, approximately €11, for a standard ticket for any destination in the UK or Europe. For all other destinations, the rate is £20, approximately €22. Both these rates double for tickets other than economy class.

Moreover, the UK Government announced in its 2008 pre-budget speech that it would be revising the duty with an introduction of four bands of 2,000 miles each together with an increase in rates of air passenger duty with effect from 1 November 2009. The new rates will comprise the following: band A, zero to 2,000 miles, £11; band B, 2,001 to 4,000 miles, £45; band C, 4,001 to 6,000 miles, £50; and band D, over 6,000 miles, £55 in the case of economy class. These rates double in the case of tickets other than economy class. The base band A rate will be further increased to £12 from 1 November 2010, with increases of 30% to over 50% being applied to the other three bands B, C and D.

A new Dutch aviation tax entered into force in July last year. The tax is charged at €11.50 for EU destinations and €45 for other destinations. In France, the civil aviation tax is charged at approximately €4 for EU destinations and €7 for other destinations. Australia and New Zealand, both dependent on air travel like Ireland, also apply departure taxes.

The proposed air travel tax rates, both for shorter and longer journeys, are not unreasonable when compared with rates in other countries. For example, a person travelling in the UK will be liable to pay the UK air passenger duty of £10, approximately €11, on each leg of the journey. A passenger departing from Manchester to London will be subject to the £10 tax and on the return journey departing from London to Manchester will also be subject to the £10 tax, giving a total tax liability of £20, approximately €22. In Ireland, a person travelling in the State will be liable to pay €2 in tax on each leg of the journey, giving a total tax liability of €4. Furthermore, both the UK and Dutch rates in respect of longer flights are over two and four times higher, respectively, than the Irish rate.

The Government also acknowledges that low cost travel has been good for Ireland. The pioneers in this area deserve to be commended. However, in analysing the new tax, we must not overplay its impact.

For example, a fare from Shannon to London Stansted that is initially presented as €15 with a similar €15 return fare will actually cost a passenger over €90 when all charges are included.

Deputy Joe Carey

That is not correct.

An Ceann Comhairle

The Deputy cannot interrupt the Minster of State because this is the Adjournment.

Deputy John Moloney

It is in this briefing, so I must assume it is correct. I do not make it up as I go along.

This assumes no luggage is checked in which would cost more. Included in the €90 is a €5 credit card handling fee per flight segment. This latter practice has been the subject of much criticism by consumer bodies. Assuming fares remained the same, the price of this trip would rise to €100 on foot of the new tax. In the case of trips to Manchester, Liverpool and Glasgow the price would rise by just €2.

An Ceann Comhairle

The Minister of State's time has expired.

Health Services.

Deputy Tom Sheahan

I thank the Ceann Comhairle for affording me the opportunity to raise this matter on the Adjournment. I am glad the Minister of State at the Department of Health and Children, Deputy Moloney, is in the Chamber to address my concerns.

I chose the term "contraction" in my submission for the Adjournment because, after several announcements in the past week, health services in County Kerry are being decimated. At Kerry General Hospital, the Annagh ward, a male surgical ward, will only open five days a week. From now on, one should not even think of getting sick over the weekend in Kerry. How will, for example, an accident that requires male surgery be dealt with on a Saturday?

The hospital's orthopaedic unit, the Rathass ward, will be closed for six months for refurbishment. Where will male orthopaedic patients be cared for? It must also be remembered that Kerry's population doubles over the summer due to visitors. How will the health services deal with these extra numbers when these wards are closed?

Six beds in the psychiatric unit in the hospital have been closed. Psychiatrists across the country are inundated with cases. The other day I learned from a GP that 80% of his patients looking for anti-depressant prescriptions were under 30 years of age. However, six beds in the psychiatric unit in Kerry General Hospital are closed. In these cost-saving measures the health of the people of County Kerry is irrelevant.

Up to 21 community beds in the Rowan ward at St. Columbanus's Home in Killarney have been closed. The ward was upgraded in 2007 at much expense. I do not have the exact figure for the remedial works as it is quite difficult to get information from the Health Service Executive. Where are the health services going? The Minister of State and his colleagues are jeopardising the health of the people in the county. After the closure of the Rowan ward, the female community bed ward will be next to be closed. I met recently with union representatives at the hospital and they are concerned that capacity will be reduced from 150 beds to 97.

Some children in County Kerry have been on orthodontic waiting lists for the past seven years. Kerry General Hospital still does not have an accident and emergency consultant. The last one left because he had no supports such as junior doctors or a registrar. He went to Tullamore, the Minister of State's locality, because in a similar sized hospital there he had two registrars, ten junior doctors and two other consultants. Recently, I met with the HSE representatives in Kerry who believe they will not bother appointing a replacement accident and emergency consultant for the county. Will the Minister of State explain what he will do for the health services in County Kerry?

Deputy John Moloney

The Minister for Health and Children, Deputy Harney, apologises that she cannot be present to reply to this matter.

As outlined and agreed in its national service plan, a key objective for the Health Service Executive for 2009 is to manage the delivery of activity targets. The Deputy will appreciate that the executive is facing financial pressures arising, to a large degree, from the broader economic situation, particularly an increase in the number of medical cards and lower receipts from the health levy. These cost pressures are factors outside the control of the HSE and, therefore, it must take measures to counter their effects in so as far as is possible. It must maintain a strong focus on achieving the maximum efficiency in the delivery of services. This will also require the co-operation and flexibility of all involved, including those working at the front line of care delivery, so that the effect on services for patients will be minimised.

Among the key objectives across the health service are the provision of a greater proportion of elective hospital treatment on a day basis, a shift in mental health services from the acute hospital setting to community-based services and the development of multidisciplinary primary care teams. In response to the serious challenges I have described, the executive management board at Kerry General Hospital is reviewing all areas across its services to ensure that all opportunities for increased efficiency are pursued and that the hospital remains within its allocated budget for 2009.

Specific areas identified for cost containment and efficiencies include the non-filling of management-administration vacancies, the co-ordinated planning of leave hospital-wide to ensure that locum cover is not required and ensuring that private patients are accommodated in the beds appropriate to such patients. One ward will also be converted from seven-day to five-day use. In other words, it will be closed at weekends. This will generate a significant saving without compromising patient care. Senior staff and heads of department at the hospital, as well as union representatives, have been briefed in respect of the efficiencies and cost savings plan being put in place. Local Oireachtas Members have also been briefed with regard to these measures.

The HSE must keep its financial position under constant review, particularly in light of the evolving situation in respect of demand-led schemes such as the GMS. Accordingly, the executive management board of Kerry General Hospital will continue to review its service delivery arrangements as necessary throughout the year. It is clear that the State and the agencies responsible for the delivery of public services face unprecedented economic and financial pressures in the current year. This represents a major challenge on many fronts. In the health sector, we will be obliged to deliver more for a given level of resources and this will require the co-operation of all involved. The key priority for the Government and the HSE in dealing with serious budget pressures on the health services is to ensure that the maximum level of service is provided within available financing and that the impact on front-line services will be minimised.

Public Transport.

Deputy Thomas P. Broughan

I was delighted to learn earlier this afternoon that discussions between the NBRU, SIPTU and Dublin Bus at the Labour Relations Commission, LRC, have resulted in the strike action at Dublin Bus that was set to begin on Saturday next being averted. Commuters and businesses, as well as rugby fans, in the greater Dublin area will breathe a sigh of relief that the planned massive disruptions to services have been avoided.

A major interruption of bus services is the last thing the Irish economy needs or can afford at present. An all-out bus strike is an appalling prospect for many workers who rely completely on public transport services. It would also place huge added pressure on businesses that are already under massive strain due to the horrendous economic conditions which currently obtain. However, workers at Dublin Bus and Bus Éireann felt they had no option but to withdraw their labour in light of the proposed sacking of approximately 600 of their number. Plans to cut up to 600 jobs and perhaps as many as 300 buses at Dublin Bus and Bus Éireann is an unprecedented and appalling attack on bus services, particularly in light of the collusion of the Green Party in this despicable act. Commuters have been stunned and devastated to learn that their local bus services — which are already under severe pressure due to the Government's neglect of them during the past 12 years — will now be reduced or cancelled completely.

I have been inundated with e-mails from young bus drivers and their families who have been devastated to learn that they are to be made redundant. Many of these young drivers left permanent and pensionable jobs in other sectors in the past 12 months in order to join our public bus companies because they believed they had a future with these companies. In the context of the current disastrous economic situation, losing their jobs is a devastating body blow. Each job lost costs the State an additional €20,000 per annum. This means that the State would lose a further €12 million each year as a result of what is proposed at Dublin Bus and Bus Éireann. We should not be obliged to cope with such a loss at present.

Is the Minister of State in a position to provide any hope tonight to all or some of the young drivers — and their families — who face the possible termination of their contracts in the next week or two? Will he indicate whether there have been any moves to consider a full or partly voluntary redundancy scheme at both bus companies? Will he also comment on the natural wastage that occurs in a large workforce and indicate how this will impact on the proposal?

The Minister for Transport, Deputy Dempsey, has direct responsibility for the funding and operation of our national public transport system. However, when a crisis of this magnitude occurs within the bus sector, he runs for cover or tries to use the Green party or the recently published Deloitte & Touche report on Dublin Bus and Bus Éireann as a mudguard. A constituent pointed out to me last week that the Minister and his Government colleagues have approved or sanctioned Dublin Bus and Bus Éireann business plans in recent years which included fleet expansion plans and the associated recruitment of new drivers. How is it possible that the Minister approved these plans and is now abdicating all responsibility when hundreds of young bus workers are being summarily dismissed?

Both bus companies will clearly be obliged to deal with exceptionally difficult financial circumstances this year. However, the Government has done little to strengthen and support them. Late last year, the Minister abolished the public transport fuel rebate, which CIE warned would add millions to operating costs this year. The funding Bus Éireann and Dublin Bus receive under the public service obligation is among the lowest in the European Union. I understand that Dublin Bus receives 29% of its revenue support in this way, while Bus Éireann receives only 12%. The recent Deloitte & Touche report, which the House will discuss tomorrow, indicates that they occupy positions at the bottom of the table in the context of public support for bus companies.

Even though an all-out bus strike next week has been avoided, it is clear that deep problems remain and that what has occurred may just be a deferral of strike action. One of the appalling features of the current industrial relations crises at both companies has been the complete absence of any political leadership from the Minister for Transport. On numerous occasions in recent weeks and months I asked the Minister, both in this Chamber and at meetings of the Joint Committee on Transport, to adopt a hands-on approach and to do everything possible to avoid an all-out bus strike in light of the profound consequences this would have for workers and businesses throughout the country. It is disappointing that the Minister has continually shirked his responsibility and that matters are as they now stand.

Deputy John Moloney

I apologise for the fact that the Minister for Transport cannot be present to take this matter.

As the House will be aware, the resolution of industrial relations matters in the CIE companies and elsewhere is a matter for those companies to deal with in conjunction with their unions and, if necessary, by means of the industrial relations machinery of the State. The background to the current dispute is that CIE is projecting an operating deficit of up to €100 million for 2009. This is despite an increased subvention of €313 million and 10% fares increase. With falling revenue and passengers numbers and a worsening financial position, measures need to be taken immediately in order to secure the future viability of the companies. Dublin Bus and Bus Éireann have prepared cost recovery plans to achieve this and their representatives have made themselves fully available for engagement with the unions in respect of these plans.

As the House will also be aware, the LRC intervened in the matter and invited the unions and Dublin Bus representatives to attend discussions earlier today in an effort to avert strike action. The outcome of this initiative has resulted in all proposed strike actions being postponed for one week to allow intensive negotiations on cost reduction measures to get under way from Monday next under the auspices of the LRC. The intervention of the LRC is welcome and the Minister for Transport encourages all involved to work constructively to avoid strike action. Such action will not serve the interests of the workers, the public or the companies and nor will it support public transport as an alternative to the use of private cars.

School Staffing.

Deputy John O’Mahony

I wish to share time with Deputy Perry.

An Ceann Comhairle

Is that agreed? Agreed.

Deputy John O’Mahony

I thank the Ceann Comhairle for allowing me to raise this important issue which relates to the removal of a rural co-ordinator for a number of DEIS schools on the Mayo-Sligo border. This matter first came to light when the rural co-ordinator was withdrawn from non-DEIS schools in the area as a result of recent cutbacks. As a result, St. John's national school, Carramore, Kinaffe national school, Swinford, Castlerock national school, Aclare, and St. Attracta's national school Kilmactigue, have been left without either a home-school community liaison officer or a rural co-ordinator.

I am disappointed that the Minister for Education and Science is not present to take this matter. However, I am aware that the Minister of State, Deputy Moloney, is a fair-minded person and I urge him to obtain a successful resolution in respect of this matter.

The schools to which I refer have been informed that they will receive some form of grant in lieu. However, this can in no way replace the service on offer at present. Principals, teachers and parents have informed me about the wonderful service that the rural co-ordinator provides at present. She runs parenting, preschool and many other courses for each of the schools and undertakes home visits which create a healthy understanding among families and the schools their children attend and ensure that a holistic and caring education is delivered to those children. Rural co-ordinators have been one of the success stories of the primary education system in recent times. They give children in rural schools an even playing field and help to overcome disadvantage and isolation.

Any grant given in lieu of the loss of a rural co-ordinator, while a help, will not in any way replace what it is proposed to remove. A recent letter from the Department states that it is reclustering review considered the size and geographical proximity of other schools and indicated the service was withdrawn for this reason. Surely the overriding decision should have been based on the level of disadvantage. To be constructive, the schools in question produced a new cluster involving Lahinch national school, which would be an acceptable solution if it were taken on board.

In rural parishes the rural co-ordinator becomes the spokesperson for parents who will not or cannot speak for themselves. I appeal to the Minister of State to use his good offices to ensure those with responsibility for this decision change their minds. The savings obtained from removing the rural co-ordinator in the primary school cluster in question would be minuscule, whereas the loss of service would be substantial. I appeal to the Minister to reconsider the decision and allow the post to be retained in the schools in question.

Deputy John Perry

I thank Deputy O'Mahony for sharing time on this important issue. The Minister for Education and Science, Deputy Batt O'Keeffe, gave an undertaking that DEIS schools would not be subject to cutbacks. This offered some comfort to schools, staff and parents in disadvantaged areas. We are now witnessing the rolling back of this undertaking by the Minister with the axing of the vital service of rural co-ordinators in many DEIS cluster schools.

Kilmactigue national school and Castlerock national school in County Sligo are classified as DEIS schools, with the latter being the base school for a cluster of five DEIS schools. As a result of two schools within the cluster losing DEIS status, the cluster was broken up. Kilmactigue national school proposed a new cluster in order that the vital rural co-ordinator service could continue. However, it received a reply from the inclusion unit of the Department stating that having considered the size and level of disadvantage of the schools in question, their geographical location and proximity to other schools, it was not possible in the reclustering review to include all the schools in the cluster. For this reason, it was decided that some geographically isolated schools and-or have small enrolments were not entitled to a rural co-ordinator.

If the schools in question were deemed disadvantaged and warranted the appointment of a rural co-ordinator five years ago, what has changed in the meantime? The schools, which were classified as disadvantaged five years ago, are still disadvantaged and still have a low enrolment. The rural co-ordinator role was a vital link between the home and school for those families who needed it. It provided home school liaison programmes, as well as parenting and family support for those in disadvantaged areas.

This cutback is another example of the most vulnerable in society suffering as a result of a lack of prioritisation in the management of the rollout of funding. The very families who need these supports are now losing out through the withdrawal of the vital rural co-ordinator service, a decision which will place further strain on the resources of schools in disadvantaged areas. I call on the Minister to include the DEIS schools in question, Kilmactigue national school, Kinaffe national school, Lahinch national school, Castlerock national school and Carramore national school, in the cluster programme to ensure their rural co-ordinator service is retained. As Deputy O'Mahony stated, this is a vital service and maintaining it will not lead to additional costs. The Minister should take a common sense approach to the benefits of maintaining a rural co-ordinator for the schools in question. It would be easy to facilitate the retention of the co-ordinator.

Deputy John Moloney

I thank the Deputies for their contributions. I am taking this Adjournment matter on behalf of my colleague, the Minister of State at the Department of Education and Science, Deputy Seán Haughey.

DEIS, the action plan for educational inclusion, provides for a standardised system for identifying levels of disadvantage and a new integrated school support programme, SSP. DEIS brings together and builds upon a number of existing interventions in schools with concentrated levels of disadvantage. The process of identifying schools for participation in DEIS was managed by the Educational Research Centre on behalf of the Department and supported by quality assurance work co-ordinated through the Department's regional offices and the inspectorate. There are 876 schools in DEIS, comprising 673 primary schools — 199 urban band 1, 141 urban band 2 and 333 rural — and 203 second level schools.

Rural schools participating in the DEIS scheme have access to a rural co-ordinator serving a cluster of schools whose general functions include the development of home school community liaison, supporting the implementation of literacy and numeracy measures and planning supports. Some rural DEIS schools receive financial support as an alternative to rural co-ordinator services where the schools cannot be clustered.

The schools to which the Deputies refer were selected for inclusion under the rural element of DEIS. In the past, these schools were part of rural clusters which also comprised schools that were not included in DEIS but retained resources, including a rural co-ordinator service, under pre-existing schemes and programmes for addressing educational disadvantage.

When DEIS was introduced a commitment was given, as a concessionary measure to these non-DEIS schools, that they would retain a level of support for the duration of the current DEIS initiative which is scheduled to end in 2010. Owing to the current challenging economic climate, such supports are being withdrawn from non-DEIS schools from the beginning of the next school year. As a result, it has been necessary to recluster some DEIS schools which have to date been clustered with non-DEIS schools. As part of this process, all possibilities were explored to cluster schools, taking into account the size and level of disadvantage of schools, geographical location, the proximity of schools to each other and the overall resources available for this purpose.

It was not possible to include the schools referred to by the Deputy in a rural cluster. As a consequence, these schools will receive additional financial support from the Department in lieu of the rural co-ordinator service from the 2009-10 school year and will continue to receive the full range of supports provided to rural primary schools under DEIS.

An Ceann Comhairle

Before concluding, I must advise Members that No. 23, the Financial Emergency Measures in the Public Interest Bill 2009, will now be sent to the Seanad.

The Dáil adjourned at 11.20 p.m. until 10.30 a.m. on Thursday, 26 February 2009.

Dáil Éireann debate - Wednesday, 25 Feb 2009