We only had enough money in the national coffers to pay pensions, wages, for public services and meet day-to-day commitments for five months. How quickly people have forgotten, particularly those who contributed to our losing economic sovereignty; that is beyond me. Fianna Fáil has rewritten history and reinvented itself at a pace that has astounded even some of its own members and supporters. Of course, the general public is right to look ahead towards a brighter horizon but that they should put the blame on those who have tried to rescue the situation is unusual.
As Deputy Billy Kelleher said, there were choices. I recall the choices made by Fianna Fáil to cut all social welfare rates by 4%, including the blind pension and the disability allowance. At the time I gave out about it, but I understand also that it is difficult to make cuts in any area. Restoring our reputation abroad was the first crucial step we had to take. We then had to engage in a rescue operation which has taken the best part of two years and been severely circumscribed by the troika agreement, on which the signature of the previous Fianna Fáil-Green Party Government is indelibly imprinted. Now, we are embarking on the recovery phase. Of course, the huge sacrifices made by the people - citizens - and all of the various measures they have had to encompass, the burden of tax increases and expenditure cuts they have had to carry are all laid out in the troika agreement. It was a sovereign agreement and, while there might have been a chance to work within it, the overall targets had to be achieved. The people have been instrumental in getting us towards this phase of recovery. They have carried the load.
The staging of rebellions would have given some degree of satisfaction, but it would not have contributed one iota to finding a solution. I recall a colleague of mine who died this morning, former councillor Mark Nugent. He contributed hugely to the creation and salvation of Bord na Móna to what it is today. When he was a worker-director, he always said one had to face up to things and explain them clearly and unequivocally to people. The people may be angry, but they understand that it is for the best of motives to achieve the best results. That is what he did. In his memory and in tribute to his loyalty and integrity, we could all copy what he achieved in his political life.
When one is in the clutches of the moneylenders, one is in very severe difficulty. I hope the public's tolerance, patience and forbearance which I acknowledge will see a return to a measure of hope and prosperity, though certainly not on the scale of the economic lunacy we witnessed during the illusional boom years.
The Labour Party has ensured since it entered Government that the least well-off and basic rates of social welfare have been protected. Some of the cuts were certainly hard to take. However, I hope when matters progress, that we will be in a position to reverse them. Today the Minister for Education and Skills, Deputy Ruairí Quinn, has announced the restoration of the summer works scheme and the small works remedial scheme for schools, which are hugely important. This is a huge relief for boards of management and parents associations and will give sustenance to the construction industry, particularly local registered builders who are compliant and will have an opportunity to improve the school environment, which is essential. Education is our way back and must remain our number one priority. The Labour Party made sure it was our number one priority and we should be very proud of the achievements of the Minister in the budget.
Banks are still not lending to small businesses, particularly start-up businesses. This remains one of the big issues. The Government has to consider the establishment of a State investment bank, which has long been Labour Party policy. I authored the policy on a strategic investment bank and it was my own idea. It would be analogous to the ACC and ICC model. These were great institutions when they were in the control of semi-State institutions and provided much-needed capital for businesses and the agriculture sector. We can go back to that model. It is only when they started to become involved during the property boom that some of the institutions lost their way. A State investment bank is essential. I believe we need such a bank to help the economy to recover, businesses to get off the ground and, in particular, ensure there will be competition.
The new training agency, SOLAS, must be much more effective and focused than FÁS was. It must ensure young people are trained and given the skills needed in the growing sectors of the economy.
The transfer of the local property tax revenue to local authorities will enable them to be more effective and they should be encouraged to be more developmental and support local small businesses. The people should be in a position to see where their hard-earned money is spent. I am not happy that the transfer has been deferred to 2015 and believe this issue should be revisited.
Much spending during the boom was not well targeted. As a result of the reduced resources currently available we have an opportunity to assess projects much more carefully and apply good financial practice. Multi-annual budgeting should be introduced in all areas of public expenditure.
Banks need to remain competitive, not revert to the cartel philosophy that they followed before the arrival of the foreign banks that are now departing. Many of the foreign banks certainly had an influence during the boom that was not helpful to the economy. The only positive thing that can be said is that they brought competition. I hope the banks will not return to the old level of charges imposed. They need to cop themselves on, particularly those that have been rescued by the ordinary people of the country.
Local tourism interests will certainly gain from the 9% VAT rate. It is good news, particularly for the hospitality and tourism sectors, that this rate has been retained as one of a suite of measures to boost the economy and create much-needed jobs. It was initially introduced as part of the jobs initiative and it is imperative that it be retained to ensure the continued success of the tourism and hospitality sectors. I am delighted that, despite the challenging economic times, it has been retained because it has led to the creation of additional jobs.
The home works scheme will boost the economy. In particular, the tax relief for home renovation and maintenance works will give homeowners and small builders a boost. It will incentivise homeowners to spend money on their homes by offering them a tax break of 13.5%. As I said, it is good news not just for households but also for builders and contractors at local level. The measure will create employment and business for small-scale builders, carpenters, plumbers and other workers in the construction sector. Crucially, it rewards registered and tax compliant tradespeople, clamping down on illegal activity in the local economy and ensuring the Exchequer benefits from legitimate activity.
The build-your-own business initiative announced in the budget is designed to help aspiring entrepreneurs to start their own businesses. For many people who are keen to start their own businesses, the initial income tax payment can be a huge deterrent in taking the plunge. Under the new initiative, a long-term unemployed person starting his or her own business can earn an income of up to €40,000 per annum for two years without paying any income tax. I encourage anyone interested in finding out more information on this initiative to pursue it.
The one-parent family tax credit is to be abolished and replaced with a single parent child care tax scheme. This will give rise to a number of anomalies and I suggest that it is, in fact, discriminatory. The amendments that the Minister signalled he proposes to introduce on Committee Stage are grossly inadequate in dealing with the anomalies that have been drawn to my attention by individual constituents who are deeply angered by this proposal, which fails to recognise their specific circumstances. The proposal to abolish the credit is too wide and all-embracing in nature and should be completely reversed. The people who brought this matter to my attention referred to issues such as joint custody with guardianship involved and caring duties provided on a 50-50 basis. At present, mothers receive the child benefit in most cases and both parents currently enjoy tax credits. Under the proposal, however, one parent who is very well off could receive the tax credit. This means it has the potential to be inequitable and discriminatory.
What will be the position with regard to agreements that are the subject of rules of court or which arise during judicial separations or divorce proceedings? Will these all be cast aside in circumstances in which responsibility is shared on a 50-50 basis? One Family, which is a very progressive organisation, has outlined the position on shared child support credits and indicated that this reflects the parity of the situation in the context of shared parenting. It stated that tax bands will have to be adjusted to reflect the new reality but that, at present, child support via maintenance is clearly identifiable and is paid. I understand what the Minister is trying to do but it is critically important that this matter be addressed and that a further anomaly will not be created, particularly as such an anomaly would run contrary to everything he is trying to achieve.
The Minister of State with responsibility for small business, Deputy Perry, is present. There are many good schemes available for small and medium-sized enterprises, but these are not reaching the businesses they should. The retail industry is fighting back but we need to do more for this major supplier of jobs throughout the country. The devolution of the examinership procedure, whereby companies that are trying to survive will be able to avail of up to 100 days' grace, to the Circuit Court is extremely important. It is at this level that the vexed question of upward-only rents can be tackled head on. Exorbitant rents are clearly a massive burden for small and medium enterprises and can lead to the demise of businesses in these difficult economic times. The obstinacy of lessors with regard to entering into reviews of these arrangements, which are clearly out of proportion in current circumstances, is mind-boggling, particularly when it is possible to enter into arrangements where there is a reasonable prospect - pursuant to section 3 of the Company Law (Amendment) Act 1990 - that a business will survive. The examinership procedure will now be available at a far lower cost to people within the Circuit Court and it will hopefully help to sustain businesses which have a reasonable prospect of survival. This is an extremely important issue.
I wish to signal my outright and total opposition to the proposal - contemplated or otherwise - to bring forward the tax filing dates for the self-employed from October and mid-November, if they are paid online, to June and September. This proposal has been put forward on foot of the fact that the budget date has also been brought forward to October. However, the necessity of doing this was imposed upon us. Bringing forward the filing dates would be devastating, and it makes no sense, economic or otherwise. Those who run small businesses, shops, garages and post offices and also farmers are all self-employed and they provide much-needed employment in rural areas in particular. What is proposed would deal them a hammer blow and would destroy their plans and projections. Business people have informed me that the implementation of this proposal would lead to a rise in unemployment. It would even have an adverse affect on small accountancy firms, which do not see the logic in it.
Any suggestion that the tax filing date should be brought forward in order to ensure that the Minister will have available to him the best figures in respect of taxation income when he is drafting the budget does not hold water. Given that bimonthly VAT returns are available, the Minister already has access to returns for approximately two thirds of the year when making his budgetary decisions. All he needs do in such circumstances is to estimate a gross figure for the final third based on the figures for the first two thirds. If the amount involved needs to be lower, he can base his calculation on the returns available for the final four months of each of the years from 2010 to 2013, inclusive. A bit of ingenuity is all that will be required in order to ensure that this proposal will be binned for good. Self-employed people have had enough to worry about over the years. I welcome the increase in the VAT cash threshold for small businesses, but this countervailing measure to which I refer would place a huge burden on small businesses and would be detrimental to their operations.
Health is a major issue, particularly as it involves the care of people. Given that the provision of such care is demand-led, from a service perspective, this is not a matter to be measured purely on the basis of making expenditure savings or balancing the books. Adequate numbers of staff - be they nurses, doctors, attendants or anyone else - are required on the front line. We must focus on the fact that people get only one chance to deal with major illnesses and that there are no rehearsals. As a result, instant care and treatment which can be life-saving in nature are required. When a person is symptomatic and when his or her predicament signals the need for urgent action, a hospital manager should never be put in the position of being obliged to contact the accounting department. The proposed cuts to the health budget must be reviewed in that context. Where excessive levels of administration and bureaucracy exist, they should be tackled and savings should be made. However, nothing that is focused on patient care and safe practice can be compromised. Why not do something fundamental such as introducing a sugar tax in respect of sweets, drinks and other products that contain high levels of sugar? This is an issue that is relevant in the context of addressing the problem of obesity and the spread of diabetes. A sugar tax could raise revenues which could be put to good use in the health service and which could ultimately lead to better lifestyles, longer lives and less illness. This would be a win-win scenario for all involved and it would lessen the impact of any proposed budgetary cuts.
On public procurement contracts, I echo what Deputy Maloney and others stated to the effect that social clauses must be included in capital work projects in order to support the creation of new jobs and increase the level of youth employment. A pilot project is under way in respect of the schools building programme whereby 10% of the aggregate number of persons employed on a site must be recruited from among the ranks of the long-term unemployed. In addition, 2.5% of the aggregate number of persons working on such a site must be apprentices. The issue of apprentices must be tackled. In the past, local authorities, Bord na Móna, the ESB, CIE, etc., provided apprentices with vital work experience opportunities. We must ensure that this becomes the case again. I hope the review of apprenticeships initiated by the Minister for Education and Skills, Deputy Quinn, will have a positive impact in this regard.