Dáil Éireann debate -
Thursday, 6 Dec 2012

Vol. 785 No. 3

Leaders' Questions

Deputy Dara Calleary

We all knew before 2.30 p.m. yesterday that this budget was not going to be easy. We knew the Minister for Communications, Energy and Natural Resources and his colleagues in the Government were at pains to condition people about tough but fair choices. Congratulations. The Government achieved the tough part. Unfortunately, it completely failed on the fair part. The Tánaiste and Minister for Foreign Affairs and Trade said he knows the budget is tough but the problem is he does not seem to understand or be able to do anything about it.

Many of those who voted for Labour in 2011 are ruing their decision today. They voted on the basis of a series of promises. Clearly, the Minister and his colleagues in government have forgotten about those promises. So, permit me to remind the Members opposite with these election pamphlets. "Families Need Labour in Government", "Protect Child Benefit – Vote Labour", "A Cut Too Far – Fine Gael – Every Little Hurts".

An Ceann Comhairle

We cannot display election pamphlets in the Chamber.

Deputy Dara Calleary

There is no need to display Labour's shame.

Deputy Tom Hayes

Did the Deputy come up with this himself?

Deputy Dara Calleary

The Government has introduced the second regressive budget in a row. It has targeted children for major cuts in a range of areas.

Deputy Finian McGrath

The Government took €10 off the kiddies.

Deputy Dara Calleary

It has cut child benefit, taxed maternity benefit and cut the clothing and footwear allowances. What did it give in return? It gave just a few child care places.

One of the most unfair cuts which will impact on 70,000 families is the cut in the respite care grant which provides significant service to families in difficult situations. These families have been singled out in particular. Every one of the welfare cuts imposed in this budget could have been avoided if the Minister had proceeded with what his Labour backbenchers wanted him to do which was to put a tax on those who can pay and those earning over €100,000.

Deputy Bernard J. Durkan

Is that Fianna Fáil's policy?

Deputy Dara Calleary

It seems this budget was framed in advance with Fine Gael going to war with Labour in order that Fine Gael could protect the elites of society in its ambition to be the Tea Party.

Deputy Bernard J. Durkan

That is laughable when one thinks Fianna Fáil destroyed Irish society.

Deputy Dara Calleary

Will the Minister confirm that all the provisions announced in yesterday's budget will be contained in the social welfare Bill when it is published next week? Or will there be changes to some of these provisions?

Deputy Emmet Stagg

Fianna Fáil will be joining the United Left Alliance next.

Deputy Finian McGrath

Welcome aboard.

Deputy Barry Cowen

Deputy Stagg should better start looking around him. He might be heading off into the sunset.

An Ceann Comhairle

Perhaps we could have the Minister's reply without interruptions.

Minister for Communications, Energy and Natural Resources (Deputy Pat Rabbitte)

Thank you, a Cheann Comhairle. Yes, indeed, this is a difficult budget. I do not recall anyone on the Government benches at any stage saying other than it would be a difficult budget. The challenge confronting the Government was taking €3.5 billion out of the economy, an action with which Fianna Fáil agrees. It ought to agree with it because it negotiated it when it handed over control and direction of economic affairs outside of the country. The Government was confronted with doing this in a balanced way which protects the most vulnerable while stimulating greater employment growth in the economy. Achievements have been made in protecting core social welfare rates, protecting the pupil-teacher ratio to ensure there will be more teachers in the classroom because of demographics-----

Deputy Barry Cowen

Yet the Government now pays the teachers half the salary.

Deputy Pat Rabbitte

-----protecting the tax rates for those going to work, creating 10,000 jobs in successful schemes such as Tús and JobBridge, restoring home help, defending people with disabilities, and contrary to what Deputy Calleary has said, raising more than €500 million from those who are better off. Deputy Calleary seems to want to ignore the fact that this is the first budget which has addressed issues that have been staring us in the face for so long.

Deputy Luke 'Ming' Flanagan

Fergus Finlay would not agree with the Minister.

Deputy Pat Rabbitte

We addressed capping relief on pensions at €60,000 per annum and top-slicing enormous severance packages. The measures that have levied more than €500 million from the better-off in our society are the main contributors to these overall savings.

Deputy Jonathan O'Brien

That is not true.

Deputy Billy Kelleher

This was a budget for the rich.

An Ceann Comhairle

We do not want any comments on what the Minister is saying. Will Deputies please let him finish?

Deputy Peadar Tóibín

Emigration is going up too.

Deputy Billy Kelleher

The Government is like the Tea Party.

An Ceann Comhairle

Would you stay quiet, Deputy?

Deputy Pat Rabbitte

The difficulty is that Fianna Fáil and Sinn Féin broke with tradition this time and did not submit their pre-budget submissions for evaluation.

Deputy Niall Collins

People can take great comfort from that.

Deputy Barry Cowen

What tradition is that?

Deputy Pat Rabbitte

If my name was Cowen, I would stay quiet in this debate.

Deputy Barry Cowen

There are no rabbits to be pulled from the hat here.

An Ceann Comhairle

We are over time.

Deputy Pat Rabbitte

Some 40% of total current spending goes on the social welfare budget and that budget contributed 10% to the adjustments here.

Deputy Billy Kelleher

We are talking about people on low pay, not those on social welfare.

Deputy Pat Rabbitte

If anyone can tell me how to address the budget, in circumstances where 40% of spending goes on social welfare, without making some savings on social welfare, it cannot be done.

Deputy Dinny McGinley

What about the dirty dozen?

Deputy Pat Rabbitte

As John Maynard Keynes said: When the facts change, I change my mind. What do you do, sir?

Deputy Niall Collins

Deputy Rabbitte is ignorant of the facts.

Deputy Pat Rabbitte

We are confronted with the mess Fianna Fáil left. That is what we must deal with. I am happy to say that, thanks to the efforts of the Irish people, 85% of the heavy lifting is behind us-----

Deputy Billy Kelleher

On the backs of the poor.

Deputy Pat Rabbitte

-----and that is considerable credit to the people who bore the cost of the mess Fianna Fáil inflicted on the Irish people.

Deputy Dara Calleary

The Minister did not protect families yesterday, those who need the respite grant or families on low income by charging them the same PRSI increase as those on high income.

Deputy Aodhán Ó Ríordáin

Does Deputy Calleary remember the cut to the minimum wage?

Deputy Dara Calleary

I will quote from-----

An Ceann Comhairle

Perhaps Deputy Calleary will ask a question instead.

Deputy Dara Calleary

-----the Minister, Deputy Rabbitte's party chairman. I am referring to the Labour Party because I know the Minister, Deputy Rabbitte, has been in many parties. The party chairman, Deputy Colm Keaveney, said:

Tonight's vote not a vote on #Budget13 in its entirety, only on elements that I can live with. Next week is a different story.

Later he said:

Tonight's vote touches little that is problematic in #Budget13. That's for next week and the effort to stop them begins this evening.

What is Deputy Keaveney's effort to stop them? Can the Minister confirm all of the provisions announced by Minister for Social Protection, Deputy Burton, will be contained in the social welfare Bill or will Deputy Keaveney's effort to stop them undermine the entire budget?

Deputy Pat Rabbitte

With regard to PRSI, for the first time in the history of the State, following the decision to lift the ceiling so that PRSI is attachable to all income, in future PRSI will be attachable to all unearned income. If income is from shares, dividends, rental properties or professional fees, it will be now necessary to pay PRSI. One cannot take a single item and present it in the partisan fashion Deputy Calleary has done.

Deputy Dara Calleary

Hello. The Minister, Deputy Rabbitte, wrote the book on it.

Deputy Pat Rabbitte

Overall, the PRSI fund is in deep trouble and it is essential to maintain benefits. The very poorest and most modest paid in our society receive most of the benefits. Whether one is earning €120,000 or €20,000, one gets the same pension. For the first time, those with unearned income are now responsible for PRSI. It is the utmost of humbug for Fianna Fáil, having brought the country to the verge of ruin, to take these positions. It would appear the leopard does not change its spots.

Deputy Barry Cowen

How many spots are on the Minister, Deputy Rabbitte's back, with all the parties he criss-crossed?

Deputy Pat Rabbitte

From where I am looking across at Fianna Fáil Members, there are as many spots as if they had the measles.

Deputy Tom Hayes

Members should be careful of diseases.

Deputy Pat Rabbitte

Let us look at this leaflet being put around in opposition to the property tax.

An Ceann Comhairle

We do not display leaflets.

Deputy Pat Rabbitte

Who is putting it around? The very man who negotiated it, Deputy Micheál Martin. The Dalai Lama of Ballinlough comes in here-----

An Ceann Comhairle

We do not display leaflets in the Chamber. It is a long tradition. I ask the Minister to finish; we are over time.

Deputy Pat Rabbitte

I will not display leaflets. It is the utmost in hypocrisy for the party that brought this country to the edge of ruin to pretend, having negotiated the very memorandum of understanding that required the Government to introduce a property tax, to take up a position of opposition to it.

Deputy Dara Calleary

Here is Chairman Keaveney.

An Ceann Comhairle

I will not tolerate shouting from either side of the Chamber. I am giving Members plenty notice. I call Deputy McDonald without interruption.

Deputy Mary Lou McDonald

It is the utmost in humbug, Scrooge, to come in here and make any pretence that yesterday's budget was fair. We all know it represented a betrayal of a range of promises the Government collectively, but the Labour Party in particular, made to the electorate before the last election. That is the Government's problem. More to the point, it represented an all-out attack on older people, families, women and children. I could raise a range of issues, including the cut to child benefit, which is an obvious one, the taxation of maternity benefit and the mean cut to the back-to-school allowance for footwear and clothing for children. I find it shocking and indefensible.

(Interruptions).

Deputy Mary Lou McDonald

I want to raise one of the bad decisions made by the Government and it concerns the decision on the respite care grant. The Government has cut €325 from 77,000 families, 20,000 of whom receive no other State payment. All of the families care for people, many of whom have severe disabilities, including children. The Minister needs to reverse this decision. Fairness was breached in the budget comprehensively but this cut is not even about fairness but about decency. Making this kind of cut breaches decency. The backbenchers will make much noise while indulging in amateur dramatics and theatrics on a range of issues. On this cut to respite for families who give care to people, the Minister and his Cabinet colleagues must back down.

An Ceann Comhairle

I call the Minister without interruption.

Deputy Pat Rabbitte

My backbenchers cannot compete in making noise with Deputy McDonald. She makes less sense economically than the flaky stuntmen in the Technical Group and she refused-----

Deputy Finian McGrath

The Minister should answer the question about respite care.

Deputy Michael McNamara

Deputy Finian McGrath is all right with his €40,000 allowance.

An Ceann Comhairle

I ask Deputy Finian McGrath to sit down please.

Deputy Finian McGrath

The Minister is a disgrace.

Deputy Mary Lou McDonald

This is serious.

An Ceann Comhairle

Deputy McGrath should sit down. You were at this the other day. You are trying to get yourself thrown out again but I am not going to satisfy you. Sit down and do not be making a show of yourself.

Deputy Pat Rabbitte

That is stuntman No. 1.

Deputy Finian McGrath

What about the Minister?

An Ceann Comhairle

The Deputy will not be thrown out.

Deputy Pat Rabbitte

It was interesting during the budget that the only squealing from the Technical Group was when it was made to account for its leaders' allowances.

Deputy Finian McGrath

That is rubbish.

Deputy Pat Rabbitte

That is the real respite Deputy McGrath is concerned about.

An Ceann Comhairle

Answer Deputy McDonald's question, please.

Deputy Luke 'Ming' Flanagan

What does the Labour Party do with its leader's allowance?

An Ceann Comhairle

This is impossible and I am getting fed up with it. Minister, please answer the question and let us get on with the business. Deputies, please stay quiet.

Deputy Pat Rabbitte

With regard to women, families and social welfare, the budget has protected core social welfare rates. It has maintained in existence the qualified child allowance and family income supplement. It has maintained child benefit as a universal payment.

Deputy Jonathan O'Brien

Answer the question.

An Ceann Comhairle

Stay quiet.

Deputy Luke 'Ming' Flanagan

He is paying millionaires children's allowance.

Deputy Pat Rabbitte

It has protected lower and middle income families from tax increases. Contributions from the better off in our society have contributed more than half a billion euro.

Deputy Peadar Tóibín

He cannot answer it.

Deputy Pat Rabbitte

The difference between the task confronting the Government and that confronting Sinn Féin is that we have to bring in a budget that is workable, and 40% of current spending goes towards the social welfare budget. It is not possible to make the savings we are mandatorily required to make and not impact on social welfare. The question was how to do it best. The decisions that have been made-----

Deputy Dessie Ellis

Is the Minister saying it is fair?

Deputy Pat Rabbitte

Compare the rates to those that apply up the road in Newry-----

Deputy Barry Cowen

The Minister was not elected in Newry.

Deputy Pat Rabbitte

-----and that have been approved by Deputy Ellis's party.

Deputy Dessie Ellis

The Minister should read up on the range of provisions available in Newry.

Deputy Dinny McGinley

That is another country entirely.

Deputy Pat Rabbitte

Compare the fact that property tax is between £800 and £1,100 in Newry.

Deputy Peadar Tóibín

Does the Minister know the difference between the parliaments on both sides of the Border?

Deputy Pat Rabbitte

Sinn Féin seems to have no difficulty with that, but it has a partitionist mentality when it comes to dealing with the budget down here.

We have gone out of our way to ensure those who can pay most have done so in this budget-----

Deputies

Carers?

Deputy Pat Rabbitte

-----and that those who need to be protected are protected.

Deputy Mary Lou McDonald

I am not interested in Minister's outpourings and attacks on Sinn Féin. That is par for the course. I asked a direct question about respite care. He should not try to worm his way out of this. He knows this cut is wrong. He has to know. He cannot talk about protecting the vulnerable and then launch an attack on carers, who care, in many instances, for people with profound disabilities.

Does Pat Rabbitte get that? I heard his colleague, Joan Burton, saying to parents who rely on the back-to-school allowance to shop around. How out of touch is she? She clearly does not know how much it costs to get a child back to school these days. Is he now telling carers to shop around? Is he actually that cheap and that glib?

This is not a moment for comedy. This cut of €325 is wrong, indefensible, unfair and indecent. If he has any decency left in him, he should revise this matter and tell the carers he will roll back on it. He must do that. If he does not, there will be sufficient public outcry to force him to reverse it. Do the decent thing, Pat Rabbitte.

An Ceann Comhairle

There is a tradition in the House that we address Members by their title. I ask people to do that.

Deputy Barry Cowen

You should tell Deputy Rabbitte to do so, given the reference he made earlier.

An Ceann Comhairle

I have been reminded that it is, in fact, a Standing Order.

Deputy Pat Rabbitte

A very serious objective of the Government was to ensure the caring profession was protected. Confronted with the situation that faced us, we had a choice of protecting the carer's allowance or the half carer's allowance and dealing with a modest cut in the respite allowance.

Deputies

Modest?

Deputy Pat Rabbitte

The people who do the caring will get exactly the same allowance as before the budget. The people who are entitled to claim the half carer's allowance will get it, just like the day before the budget. We have gone to great care to ensure those people's payments are ring-fenced.

In terms of throwing in rhetorical flourishes about the back-to-school allowance and various other things-----

Deputy Mary Lou McDonald

It was not a rhetorical flourish. It is a statement of reality and is shocking.

Deputy Pat Rabbitte

-----the Ministers for Social Protection and Education and Skills will bring forward proposals later showing, for example, additional investment in the provision of hot meals for children in certain socioeconomc areas where that has been especially successful up to now.

We have protected the core rates of social welfare and maintained the benefits for the people who are doing the caring. This is a respite grant. Do we take a modest decrease in that-----

Deputies

It is not modest.

Deputy Pat Rabbitte

-----or do we cut the provision for caring? It was not possible to bring in a budget, which is the sixth in a row of budgets that have made cut upon cut because of the crisis in which the country finds itself, unless savings were made across the board.

Deputy Peadar Tóibín

You could have raised tax on higher incomes.

Deputy Richard Boyd Barrett

You could have taxed the rich.

Deputy Sandra McLellan

A wealth tax.

Deputy Pat Rabbitte

Everyone had to contribute something. Otherwise it would not have been possible to comply with the targets imposed on us.

Deputy Dessie Ellis

The Minister still did not answer the question.

Deputy Thomas Pringle

In the run-up to the budget, we were constantly told it would be fair and equal and that those who can pay would do so. Yesterday, we saw where the truth lies. Low earners are left to bear the brunt of the cuts and they have the Fine Gael-Labour coalition to thank for it.

Yesterday, we were told we are near the end of the austerity budgets. Again this morning, the Minister said 85% of the heavy lifting has been done. He fails to understand that many people just cannot take any more. This is yet another budget that fails to hit the highest earners in society and targets the vulnerable in a brutal way. The Government has clearly lost sight of what people are experiencing.

Removing the €127 PRSI exemption threshold will cost every worker earning more than the minimum wage €264 per annum. A person earning €18,000 a year will pay the same PRSI increase as we Deputies, who earn €92,000. How can a Labour Party Minister justify that? Fine Gael guaranteed there would be no increases in income tax, but for low income workers PRSI is a tax on income. To say they have not increased income tax is misleading, at best.

The Minister for Finance said PRSI is good value, especially for those on the lower end of the income distribution scale and those who have shorter contribution histories. If these people's voices were heard they would say good value is when the money is in their pockets and not being taken from them with this cut.

Labour made much of wanting to increase the universal social charge for those earning more than €100,000 per year, but they lost that battle to their masters in the coalition. Nevertheless, they are happy to take away the PRSI threshold. Labour does not protect the vulnerable. It is targeting them further. How can the Minister and his Labour Party colleagues stand over the cutting of the PRSI allowance threshold? Is that what he calls a fair budget?

Deputy Pat Rabbitte

I agree with Deputy Pringle that no one in their right mind would want to find themselves where we are. We have to deal with the world as we find it, however, and not as we would like it. The countries we are trading with are in recession. The eurozone is back in recession. Growth expectations have not been realised. Savings have to be made. We have only one lender and we will not be able to pay carer's allowance, teachers, firemen and gardaí unless we can raise the money. Only one lender is prepared to give us the money and that lender established certain conditions with which we must comply. That is what we are seeking to do.

Deputy Pringle raised the PRSI issue but he chose to ignore that for the first time in the history of the State, the best off in society will be required to declare unearned income from whatever source for PRSI purposes. That is part of refurbishing the social insurance fund. The people who are most dependent on the social insurance fund are not those paid €100,000 or €200,000 or more, because they get the same pension as someone on €20,000; those who get most from the social insurance fund are those on modest and low incomes. The social insurance fund is in dire trouble and we must maintain that fund as an act of solidarity with those on low and modest incomes. That is what we are doing. No one earning less than €18,300 will be liable for the PRSI disallowance, and no one earning less than €10,600 is liable for the universal social charge because we took 330,000 people out of the universal social charge net last year. The social insurance fund is the one insurance policy people on modest and low incomes have in an uncertain world and in preparation for their senior years. In terms of the overall changes, they are well balanced and well judged. What is more important for people than to have that safety net if they should come to need it, as they will when they reach pension age?

Deputy Thomas Pringle

Now the troika is being blamed for the PRSI increase; it was forced upon the Government. That must be what the Minister is telling the Labour Party backbenchers to make them accept this.

The Irish League of Credit Unions offered the Government €5 billion for investment but the Government would not take it. There are other lenders that could be tapped into. The social insurance fund is in deficit and in a recession it should be, while in good times it should be built up again. We have been funding the social insurance fund through the recession from Government revenue. Does the Minister think it is fair to tell people on €18,000 per year that they should lose €264 from their wages and that it is balanced by charging PRSI on those with high incomes? The Labour Party tried to have the universal social charge increased but it lost that battle with Fine Gael and now it is introducing this PRSI increase. The Labour Party should have refused unless one was done in exchange for the other. It could not even manage that. There is no fairness in this budget for the low paid and all the other items people have identified today. How can the Minister still claim that is a reasonable outcome?

Deputy Pat Rabbitte

We want to ensure that in future people who are unfortunate enough to temporarily lose their employment or who reach retirement age are protected as far as the State can do it. It does it quite well; it does it better than comparable states in the OECD or the European Union. It does it better than the northern state adjacent to Deputy Pringle. I am proud of that. For Deputy Pringle to sneer at the troika's injunctions simply means he does not have to contend with them.

Deputy Thomas Pringle

No one is sneering.

Deputy Pat Rabbitte

There is no sentiment; the troika lends us money, setting conditions for that, and we comply with those conditions or it does not sign the cheque. There is no mystery to this.

Deputy Mattie McGrath

What about Greece?

Deputy Pat Rabbitte

What about Greece? There are people hungry at the bottom of the pile in Greece.

Deputy Mattie McGrath

There are hungry people here too. They cannot live on rabbit.

Deputy Pat Rabbitte

Tens of thousands of public servants have been disemployed.

Deputy Finian McGrath

The Minister wants to pull a rabbit of the hat.

Deputy Pat Rabbitte

People who are paying the USC in this country on as little as €10,000 are liable to full tax in Greece and many other impositions. If colleagues on the Opposition benches think we should go the way of Greece, this Government does not agree.

Deputy Luke 'Ming' Flanagan

No one said that.

Deputy Pat Rabbitte

Deputy Pringle refuses to acknowledge decisions in the budget like slashing tax relief on pension pots for people who expect a pension of more than €60,000.

Deputy Róisín Shortall

When?

Deputy Pat Rabbitte

He refused to acknowledge the mansion tax on homes worth more than €1 million.

Deputy Finian McGrath

Will the Minister pay that?

Deputy Pat Rabbitte

He ignored the 3% increase in USC for better off pensioners.

Deputy Finian McGrath

Will the Minister pay the mansion tax?

Deputy Robert Troy

How many homes will that affect?

Deputy Pat Rabbitte

I will not trace along the benches there on that one because it would not be helpful.

An Ceann Comhairle

Only Deputy Pringle is asking questions.

Deputy Pat Rabbitte

We have extended PRSI to all incomes and made changes to capital gains tax, capital acquisitions tax and DIRT, all of which affect the better off. In so far as the Government had it within its power, it took money from those best able to pay.

Deputy Finian McGrath

Except the respite care grant.

Deputy Pat Rabbitte

Everyone must contribute something.

Deputy Patrick Nulty

Why did the Labour Party not impose a financial transaction tax? It is Labour Party policy.

Deputy Pat Rabbitte

For those who need a safety net, however, the safety net has been protected and we are proud of that.