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Dáil Éireann debate -
Thursday, 13 Oct 2016

Vol. 924 No. 3

Financial Resolution No. 2: General (Resumed)

Debate resumed on the following motion:
THAT it is expedient to amend the law relating to inland revenue (including value-added tax and excise) and to make further provision in connection with finance.
- (Minister for Foreign Affairs and Trade).

I wish to share time with the Minister of State at the Department of Transport, Tourism and Sport, Deputy Patrick O'Donovan.

Last night I spoke about Enterprise Ireland and its team based in London. It provides support to clients to identify key business opportunities in the short to medium term, with advice on responding to the implications of Brexit such as improving competitiveness and reducing supply chain costs.

Enterprise Ireland plans to intensify its international trade and investments schedule for the remainder of 2016 to include trade missions and events to Northern Europe, the USA, China, India and other high growth markets. Last week, EI hosted an international markets week at the RDS to provide Irish exporters with access to overseas markets advisers, which I attended. The EI strategy is to immediately strengthen Ireland's ability to penetrate other key markets so that we can sustain and grow exports and reduce our dependence on the UK. This will involve investment in programmes to ensure that EI clients have the finances, innovation and scale to grow on the international markets.

The local enterprise offices, LEOs, are a key part of Government job creation and our regional enterprise development strategy. They are driving job creation and new business start-ups in every county in Ireland. During the first two years of their existence the LEOs supported the creation of 7,500 new jobs nationwide in small and micro-enterprises. This is real momentum. We want to build on that and to deliver and sustain more local jobs to communities throughout the country. The LEOs play a particularly important role in areas more heavily dependent on local sources of job creation as they would not necessarily benefit from IDA or EI clients. There has been much talk lately about the IDA not delivering for all counties. The IDA's reputation on the international stage is second to none. It is delivering many jobs for the country. For example, 640 jobs were created in County Clare last year by the IDA, which is the sixth highest number of jobs created country-wide by the IDA. I am delighted that the capital budget for LEO in my own area will increase by €4 million, or 22%, to €22.5 million in 2017. I have visited a number of LEOs and local authorities over the past few months and I intend to meet with more of them over the coming months. I want to ensure we are making the best use of additional funding.

Developing business ideas and building company capacity in start-ups is a key role of the local enterprise offices. Last year, the LEOs enabled more than 27,000 local businesspeople to avail of business training and more than 8,000 people availed of one-to-one-business mentoring. I am currently making provision to ensure that Microfinance Ireland can continue to provide finance for small companies for another five years beyond 2016. Microfinance Ireland has been very successful. The LEOs have a key role to play in promoting this scheme and they supported over 400 applications to MFI last year.

Tomorrow is an important day for our young entrepreneurs in that it is the closing date for applications under the Ireland's Best Young Entrepreneur, IBYE, initiative, in respect of which a huge number of applications have been already received. This shows that this initiative is working. We must start from the bottom up. The LEOs have an important role to play in encouraging entrepreneurship and new start-ups. Through the provision of support for small new business we will grow employment not only in the regions but in every county and this, in turn, will drive recovery not only in the regions but in every community and county. I congratulate all young people who were successful in previous IBYE initiatives. The LEOs have supported more than 2,000 young entrepreneurs in realising their business ambitions. As I said, the application process closes tomorrow but a healthy volume of applications has been already received.

This budget forms part of the Government's three-year plan for our recovery. I believe our economy is moving in the right direction such that jobs will be created and sustained in regions in the coming years.

I welcome the budget and will focus in my contribution on two areas for which I have responsibility, tourism and sport, before commenting on the budget in general. I welcome the fact that the Department of Transport, Tourism and Sport has been allocated an additional €72 million. Specifically in my own area of responsibility in the development of sport and tourism, I am delighted that I have secured agreement from Government through the Department of Public Expenditure and Reform for funding around the sports capital programme for 2017. I will provide further details of that in the coming weeks. This is of huge importance to me and other Deputies and to communities across the country. It is a programme that makes a tangible difference to communities in urban and rural areas. It is a labour activation measure and also a recognition by the State of the work that has been done by sporting organisations on the ground.

I compliment and commend the work of the State agencies for which I have responsibility, namely Sport Ireland, Fáilte Ireland and Tourism Ireland. There is competition for resources and there are challenges in the areas of both current and capital expenditure, but I am committed to working with the three agencies for which I have direct responsibility as well as the national governing bodies in sport and the representative organisations within tourism to ensure that we grow those sectors. Specifically in the area of sport, I draw particular attention to the work of Sport Ireland and my Department over the last number of months to prepare athletes for the Olympics and Paralympics. Contributing to the debate on the financial resolution is the first time I have had a chance to speak in the House since the games and I take the opportunity to compliment all of the athletes who represented us so impeccably in Rio. Sport Ireland and the Department are looking at the effectiveness of the high-performance programme and at Ireland's participation and performance at the Olympic Games. This will form part of our work programme for 2017.

I am delighted that my efforts have resulted in the securing of the 9% VAT rate for the tourism and hospitality industry for the next 12 months. When that initiative was brought before the House initially some years ago, it was opposed for political purposes and the wrong reasons. It was opposed because of opposition for opposition's sake. The initiative has played no small part in the revival of the Irish tourism and hospitality industry and the creation of thousands of jobs in communities across the country. I welcome the decision of the Minister for Finance to continue with the 9% VAT initiative. It has returned a great deal to the Exchequer in terms of VAT, PRSI and PAYE contributions as well as other taxes by virtue of the fact that it is a stimulus to the tourism industry. It is regrettable that some of those who opposed the measure in the House when it was originally introduced as part of the jobs initiative do not have the courage to say now that they were wrong. They might use the opportunity to do that in their budget speeches later. Very few people have spoken about tourism but they might use their parties' time and their own time to say they were wrong to oppose the initiative.

We have a tourism programme for 2017 which includes €109 million on the current side and €13 million on the capital side. This is very important in terms of growing the tourism industry. We have a vibrant tourism industry and we are developing brands that are enablers in terms of bringing people to the country to have a good experience. I cite in particular the Wild Atlantic Way, Ireland's Ancient East and the Dublin brand, A Breath of Fresh Air, but there is a great deal more that we have to do. There are three critical risks facing the Irish tourism industry as I have said publicly before. Brexit is an obvious threat but there is also competitiveness and political stability. I rank those in no particular order, but Brexit has its own challenges because tourism is an area which has contributed in no small way to the revival of the economy. It is a regional industry which has spread through every county. For my summer holidays, I was in the constituencies of both the Minister of State, Deputy John Halligan, and the Leas-Cheann Comhairle. Counties Donegal and Waterford have fantastic offerings, as do all our counties and there is an opportunity for people to experience that. The risks that exist are ones we cannot take for granted. I appeal to the industry on competitiveness. We must ensure that the visitor who comes to Ireland has an enjoyable experience and that our staycationer, the person holidaying at home in Ireland, also has an enjoyable experience so that we get the repeat business.

We all remember what happened in the early noughties and do not want to go down that road again. That is one of the risks. Another is Brexit and the tumble in the value of sterling. The offering in places such as Scotland, the Isle of Man and Northern Ireland is something of which we have to be mindful as we develop our product.

Stability is important in the development of tourism policy. The policy adopted by my predecessors in the Department of Transport, Tourism and Sport, Deputy Paschal Donohoe, now Minister for Public Expenditure and Reform, and the Minister of State, Deputy Michael Ring, is critical in developing the industry into the future. There can be no shocks to the system in terms of policy. Fáilte Ireland and Tourism Ireland are working off a blueprint. In the next few years we hope to have 250,000 people working in the tourism and hospitality industry. That is a major endorsement of the creation of real jobs in the real economy for real people who pay real mortgages and rear real children.

My colleague, the Minister of State, Deputy Pat Breen, referred to job announcements. In Newcastle West, County Limerick, we were very fortunate recently to have an announcement of a long-overdue investment. It is almost 40 years since the last foreign company invested directly in the area, a company which is still in existence. It has been announced that Ortec is establishing a European manufacturing base in Newcastle West, with the creation of 110 jobs initially. That is very important and has been brought about by the climate created in the past few years which has made Ireland a good place in which to invest.

The budget offers an opportunity which many other Deputies in the House in 2011 and I never thought would be possible within a five-year period. There will be an additional 2,500 teachers and 800 gardaí, as well as the allocation of €107 million for rural development. Farming organisations have welcomed tax initiatives and other incentives. There is the largest budget allocation ever for the health service, a €5 increase across the board in social welfare payments, as well as cuts to USC rates, a much hated tax introduced at a time when the country was on its knees. There is also support for first-time buyers, as well as a range of other measures across Departments in areas such as the arts, defence and agriculture.

We cannot have a programme-based recovery, section by section, unless we have a strong economy. Everybody in the House knows that the decisions taken in the past five years were very difficult, but it was the right thing to do. Can one imagine where we would be today had we not made these decisions? We would be in a very difficult position and not able to deliver any of the elements to which I referred, not to mention the improvements for which I hope to be responsible in my Department.

There is no doubt that this is a new Government, but those in the cheap seats are being found out. It is very easy to criticise. In the aftermath of the general election there was an opportunity for people to tog off and put on a jersey, but some decided to run away. It was not the first time that had happened and it will not be the last. Those who signed up to support the Government structure in place have taken a risk because it is a political arrangement that has never been experienced since the foundation of the State. There are risks to the Government, but the principal Opposition party has behaved very responsibly. It has taken its duty very seriously in terms of the constitutional position of its members as Members of the Oireachtas, but that is where it ends. The rest of those in opposition have taken an à la carte approach. Let us see their budget proposals and whether the figures add up. I refer to the Whirligig Witch and Mickey Mouse proposals that suggest we tax our way into oblivion in the hope the economy would recover. That is what Sinn Féin hopes they would do. In increasing VAT and the USC we would drive people out of the country, proposals Sinn Féin has conveniently decided to ditch. Those involved in the tourism industry have not forgotten what it proposed to do. Those involved in the industry in County Donegal are acutely aware of the benefits of the 9% VAT rate and the damage an increase in the rate would do to Ireland. They are also acutely aware of the travel tax and the other initiatives Sinn Féin opposed. Sinn Féin has seen what the Government has done. It is aware of the number of people now employed in Irish industries and the opportunities that have been created for them to rear their children in an environment which five years ago we never thought it would be possible to create. The alternative is stark; it is one in which the country would be sent hurtling back into the Stone Age.

That is a place I do not believe anybody in this House wants to go.

Go raibh maith agat, a Aire Stáit.

Finally, I want-----

Tá an t-am caite.

Go raibh maith agat. I want to compliment the Ministers, Deputies Donohoe and Noonan, everybody that has worked in government and those in opposition who have behaved responsibly on this. This is a good budget. It will make a big difference as we grow the economy and society into the future. I compliment the budget and commend it to the House.

I understand I am sharing time with Deputy John McGuinness. This is a new and unusual situation for our party to be in based on the outcome of the last election, the position we found ourselves in of not being able to form a Government and yet being absolutely conscious that the people had given everybody in this House a mandate to form a Government and to govern. Our position was to support and facilitate a minority Government. This budget comes from part of that process specifically based on the confidence and supply agreement.

To be fair, this budget is different from last year's budget. The budgetary process was somewhat more transparent. However, I want to put it on the record that if we are to go forward and facilitate future budgets, there needs to be greater transparency. My party had its normal parliamentary party meeting last Tuesday week, at which stage we were talking about an anticipated budget of in or around €1 billion. Later that week it became €1.2 billion, and on budget day it became €1.3 billion. The confidence and supply agreement set out our key principles and objectives and what our policy areas were. However, that was not a fair position to have left us in, that €200 million or €300 million of additional funding was going to come up in the budget at short notice. The processes need to be better than that if we are to have a meaningful input in the future. I took it badly personally because I was interested in contributing in a meaningful way, in particular having been involved in the housing committee and so forth. I want to say that at the outset. The process for future budgets needs to improve significantly.

I want to acknowledge that this budget is different and its emphasis is different. We set out in the confidence and supply arrangement that expenditure in comparison to tax cuts would be at a ratio of at least 2:1. That has been surpassed in this budget. We talked about the whole area of fairness. Budget 2016 last year was a budget of €1.5 billion. This year's is somewhat less, as a budget of €1.3 billion. From the point of view of fairness, I want to put this on the record because it matters. In budget 2016, a pensioner received an extra €3 a week, which was about €150 per annum. Somebody who was on disability allowance, carer's allowance or other payments received nothing extra. However, if one was on a salary of €70,000, the USC cuts were worth almost €900 a year. If that is compared with this year's budget, the pensioner receives a fiver a week, which is about €250 extra a year. The disability allowance and carer's allowance received €250 extra a year. The person on €70,000 a year is receiving an improvement this year of about €350. It is a much fairer outcome. That is not to say that the increases are huge, but there is an element of fairness in this budget that was not in the last budget. The people on lower incomes, whether they are dependent on social welfare or lower incomes, are doing somewhat better than they had done in previous budgets.

When I talk about fairness and the confidence and supply agreement, there was an element in it that there was supposed to be no shocks, surprises or so forth. Yesterday, the leader of the Labour Party asked the Taoiseach when the social welfare increases would come in and actually be paid. I was quite surprised to hear that there was no specific answer given. We have been led to believe in our party as part of the agreement and discussions that those payments would commence in the first week in March. I think that is unfair. If somebody is a worker, they are going to see their benefits, no matter how small they are and whether it is USC or so forth, from 1 January. They will see it from the beginning of the year and yet the Government is asking other categories of people to wait until March. There is an inherent unfairness in that and I believe that should be reviewed. I say that before the Social Welfare Bill is published and before we get into the depth and discussion that will go with it. In one week, between last week and budget day, the budget increased from €1 billion to €1.3 billion and I believe the additional funding should be looked at again to commence those payments on 1 January. I will refer to that a little further along as I go.

Obviously the budget is underpinned by and based on economic growth. Targets are set out quite clearly in it. One of the biggest challenges and risks is around Brexit. Much talk has been made about it. Much talk has been made about Article 50 being triggered next March and a couple of years of negotiations. However, we need to get real. Brexit is happening today. Companies up and down this country, whether they are small companies, large companies or foreign direct investments, are making their decisions now. They are not waiting on this to be triggered in March and two years of negotiations. I listened to the news and sort of laughed at it this morning. It is the first tangible sign of Brexit in the UK as there is no Marmite on the shelves of Tesco because of a dispute over increases.

In the real world out there, the issues around Brexit are happening and companies are making their decisions. There are opportunities to attract new companies and to secure the ones we have. My concern with the budget was that I would have liked to have seen additional resources made available to our State companies over the next couple of years, both to attract further direct investment that might be considering relocating out of the UK and to make sure that we secure the companies we have for all the right reasons.

Yesterday, in the Taoiseach's speech, he stated:

To help farmers deal with the fallout of Brexit the Minister for Agriculture, Food and the Marine, Deputy Creed, has announced a new loan fund of €150 million which will support highly flexible loans for up to six years for amounts up to €150,000 at an interest rate of 2.95%. It will be available to livestock, tillage and horticulture farmers. These loans will enable farmers to improve the management of their cashflow and reduce the cost of their short-term borrowings.

I understand from the previous day that this is to be done through the Strategic Banking Corporation of Ireland. I am not a farmer so I reflected on it and thought of two things. Because this is an intervention targeted at one cohort, is that fair within the State aid rules? If we think it is important and imperative to do so for farmers, should we not be doing exactly the same for our SME sector? I would like that to be further explored. I believe there is merit in having a look at it.

The whole issue of housing is something that I and other colleagues have been very involved in. Before the formation of Government, there was an all-party committee and we looked at things in some detail. I am not going to have an awful lot of time, so I want to refer specifically to just a couple of issues. The first issue is the grant available in terms of a tax rebate. The issue has to be looked at and the concern is whether it simply drives up prices. The aim all along was to assist a particular cohort of individuals who are working and have the capacity to repay a mortgage, but because they are in the rental sector at the moment, cannot save for the deposit. While the measure might address that element, it seems to be a very broad brush stroke and has the real capacity to increase the cost of housing. In my view, I am disappointed that there was not further detail on supply-side measures in the programme.

There are two things that I wish to respond to specifically. We have met and had presentations from the Irish League of Credit Unions. It has been in negotiations with the Central Bank and the Department of Finance to make funding available through special purpose vehicles that would allow off-balance sheet funding for the construction of houses by approved housing bodies and local authorities. There was no mention of that in the budget or in the attached documents from the Minister. That is a key component that we need upfront. I was disappointed that it did not materialise in the budget.

There was one element that really took me aback from the point of view of underachieving and not setting the bar high enough. I do not know if any of the Deputies present have looked at this, but CSO figures published earlier in the year show that up and down the country, there are hundreds of thousands of vacant properties. I am not suggesting for a moment that every one of them is suitable for occupation or whatever. However, based on this year's budget, the plan for the Minister and the Department is that funding of €6 million will be provided in 2017 to deliver 150 units under a new repair and leasing initiative, which will allow local authorities to provide grant funding to property owners to bring vacant properties up to a standard which can be leased for social housing. At a time of crisis when we need to front-load our initiatives, 150 properties are inadequate in my view.

The figure is inadequate, given that there are thousands of such properties. In terms of a return on investment, 150 properties would not accommodate those in emergency accommodation. I know that it is only one element, but it is not half ambitious enough; therefore, we need to revisit the issue as soon as possible.

A series of additional funding measures was listed under the heading of "Compliance Measures" in the budget 2017 document. My concern is that the measures are conservative and background information on how the figures were calculated has not been supplied or, if it has - the fault might lie with me - I have not seen it. Approximately 10% of the €1.3 billion is to come from these compliance measures. I would like further information on them because, when one examines them, the section 110 and fund changes are expected to yield approximately €50 million, the measures to tackle offshore evasion are expected to yield €30 million, while the provision of increased resources to confront the issue of non-compliance is expected to lead to a yield of €50 million. As a former member of the Committee of Public Accounts, I know that when we have delved into figures in detail, the returns have been far greater. This issue should be examined because it underpins the basis of budget 2017 and reflects back to the fact that the increases in social welfare payments will not kick in on 1 January, as they should.

Budget 2017 is a case of too many cooks spoiling the broth. The money has been spread too thinly across the economy and citizens have not really gained that much financially. The other shocking part about the budget is that it makes no effort to deal with the structural issues we all face in constituencies and which are, therefore, faced by citizens.

The €5 increase in social welfare benefits will mean nothing to many once the local authority deals with the increase in the context of differential rent. The increased income will mean a reassessment of means and part of the increase will be taken back by the State. This issue should have been tackled. For example, the local authorities could have been instructed that for those in a particular age group or income sector they need not take the increase into account. This could have been done, but it was not.

The other issue is that of medical cards. The medical card system is still a fiasco. Those who apply for a medical card are asked repeatedly for the same information. They supply the information required when they submit an application also on request. Despite this, they are still told it was not received. This is a structural issue. Furthermore, every cent of income in the household is examined. If the system was a little more reasonable in the case of those who have little or nothing, many applications for a medical card would be approved. This may present a difficulty in managing the economy generally, but we have to think of those who we are serving, many of whom have a serious difficulty in engaging with the State. They may not be IT literate and may have difficulty in completing forms or collecting the information required owing to their age or medical circumstances and this prevents them from receiving an early response to a medical card application. The onus is on us to ensure we make life easier for them. Similar to what I said about the €5 increase, the Government could have set different standards for the assessment of applications for a medical card. It could have allowed those most in need of one to escape the heavy bureaucratic hand now placed on every single citizen making such an application.

The disability sector has been neglected entirely in budget 2017. In my constituency funding is required for St. Patrick's Centre on Kells Road in Kilkenny to alleviate the problems in balancing its books, problems caused by under-funding for a number of years. There has been no structural change in approaching these long-term problems which will cause difficulty for service users and further difficulties for the State, but nothing has been done to solve them. It is the same old story; it is not new politics. In fact, an overall examination of the budget shows that it is proof that there is no new politics. It is the same old story, year in, year out, with window-dressing here and there to give the impression that we are very busy doing things differently, but nothing could be further from the truth. Let us face up to it: unless we get stuck in and bring about the necessary structural changes, the position will still be the same next year.

Deputy John Curran mentioned the credit unions. They have €7 billion on deposit which they want to put to work in the economy, but the Government and the bureaucracy surrounding it are stopping them from doing so. Why should they - the friends of the people - not be allowed to engage in the funding of the construction of houses or local businesses? What would be so wrong with that? In a time of great need for cash, there are those who say they have some and ask for it to be matched. They want to be allowed to do the work that is needed, but there is no immediate response. It is almost as if there is no crisis. There are 3,500 people on the housing waiting list in County Kilkenny alone, yet there has been no real response. There seems to be no great urgency to deal with the matter. Again, structural change is required. Perhaps a Minister might turn around or reverse the legislation or regulations governing the credit unions, engage with the Central Bank and allow it to happen.

There was no groundbreaking news for business in budget 2017. There was a €400 increase in the tax credit for the self-employed, but it is to be spread over 12 months. The Government needs to move beyond this and see what the real problems are. If a self-employed person goes broke an individual or a family is affected but there will be no income relief. There is no incentive for indigenous Irish businesses to create jobs. They need help and we should be giving them a vote of confidence. The self-employed created 800,000 jobs in better times. They have the capability and the ability to do exactly the same again, but they need the State to understand they are too heavily policed in terms of red tape and bureaucracy and do not have the necessary flexibility to respond to the issues of the day because they may not have the funding or the support of the State to do it.

There are jobs available in the hospitality sector and many other small businesses. An initiative to help them could have extended the life of a business on the high street and the main street of towns and villages. It could have given an individual the confidence to start a business or reopen a unit that had been closed down or gone out of business. The budget shows no vision or strategy for entrepreneurs in seeking to revitalise the communities we represent. It is as if we did not listen to the Small Firms Association or other such organisations. These organisations, like the credit unions, are willing to put their money where their members' mouths are and do something for the economy, but we ignore them. We did it in successive budgets and in the era of new politics, given that we now have a budgetary committee and so on, I would have thought these issues would have been teased out, but they were not. We have received no response.

There is still €45 billion of bad debt in the banks. Nothing has been done to help those in debt and to give those with the ability and the capability to do business and get on with their lives a chance to perform again in the economy.

Until such time as we instruct the Central Bank, the bank we own, to perform that very task and deal with debt, our economic difficulties will continue. The same applies in the case of mortgage holders and we must also face up to that issue. Little or nothing has been done for families who are in debt and cannot bring it under control. They are being threatened with homelessness because local authorities cannot respond to the issue. Nothing in the budget suggests we have heard their story and responded to it. That is where the budget fell down. It maintained the status quo and did not address individuals and business owners who need help to get on with their lives. This is a shame because it demonstrates that there is no new politics and there has not been a response to the citizens of the State.

Budget 2017 aims to make sure everyone - the employed and self-employed; retired people and people with disabilities; carers and those who cannot work; people living in urban and rural areas; and the young and old - benefits from the recovery. It is a prudent budget in which there are no giveaways and the changes are modest. Nonetheless, more than 840,000 people will benefit from the first increase in weekly social welfare payments since 2009 and 650,000 people will benefit from the €5 increase in the State pension.

The social protection package ensures the recovery will benefit everyone, with no one left behind. It sets out to make work pay through reforms to the PRSI system, including a new deal for the self-employed, and introduces a number of targeted measures to assist lone parents, farmers and school children. From March onwards, there will be a €5 increase in the headline weekly rate of the State pension, with proportionate increases for those on reduced rates and qualified adults. The programme for Government commitment is that pensions will increase above the rate of inflation and this measure delivers on this commitment. The Fine Gael manifesto commitment was to introduce a €25 increase in the pension over five years and we are well on track to deliver on this commitment. Pensioners will also benefit from the reductions in prescription charges being introduced by my colleague, the Minister for Health, Deputy Simon Harris. In the area of taxation, pensioners with savings will benefit from reductions in DIRT. In addition, the Christmas bonus will also be payable to pensioners in December of this year at an increased rate of 85%.

The headline rate of weekly benefits for adults aged under 66 years will also increase by €5 a week. This is the first increase since 2009. Approximately 840,000 working age people will gain from this increase. "Working age" is a technical term and most people do not know what it means so allow me spell it out. It covers people in receipt of more than 30 different payments, including invalidity pension, disability allowance and blind pension; illness and partial capacity benefit; occupational injury benefit; widow’s, widower's and surviving civil partner’s pensions; one-parent family payment; back to education allowance; maternity, paternity and adoptive benefit; farm assist; carer's benefit and carer's allowance; pre-retirement allowance; supplementary welfare allowance; back to work enterprise allowance; jobseeker’s benefit, jobseeker's allowance and jobseeker’s transition payment; and employment support payments such as community employment, Tús and the rural social scheme.

I note that under many of the proposals made by the Opposition parties, many of these groups would not have received anything and others would have received an increased payment of less than €1 per week. I was strongly of the view that everyone should receive the same increase in the same month. The €5 increase in weekly benefits is permanent and will apply from March. While it would have been preferable to apply it from the start of the year, to afford to do so would have required excluding certain groups, which I could not countenance, or the introduction of an increase of less than €5, which I did not want to do. If we are to recover fully and build a more prosperous country, it must be on the basis of social cohesion and a united society, not one in which groups are divided against each other, young or old, sick or healthy, workers or unemployed, disabled or able-bodied people.

I have been encouraged by the understanding reaction of people to the delay in the implementation of the increase in payments to ensure their neighbours, other family members, friends and colleagues could benefit to the same extent. In total, almost 1.5 million people will benefit from the modest increases in the weekly rates of payment. The precise date in March will be announced on the publication of the social welfare Bill in two weeks.

A social impact assessment of the social welfare budget package, which uses the ESRI SWITCH model on a non-indexed basis, was published today. It finds that people in the lower income quintile gain most from the budget 2017 measures in percentage terms. The ESRI recognises explicitly that this was as a result of the inclusion of the weekly rate increase for working age rates of payment. The budget is, therefore, a progressive one that provides modest gains for all. The ESRI analysis includes the tax package and it finds that while everyone experiences modest gains from the budget, as a result of the social welfare package and the inclusion of non-pensioners and pensioners, those on the lowest incomes gain the most in percentage terms. This is true for deciles and quintiles.

The self-employed is a diverse group which makes a big contribution to society and the economy. Budget 2017 expands the new deal for up to 380,000 self-employed people who pay PRSI at the S class. This group includes farmers, professionals, taxi drivers and tradesmen who will have new benefits extended to them from next year. They will also benefit from an increase in the earned income tax credit and the extension of entrepreneurship supports.

From March onwards, class S contributors will be able to avail of treatment benefit for the first time, which includes free eye and dental exams, and contributions towards the cost of hearings aids and contact lenses required for medical reasons. In addition, and more significantly, self-employed contributors will be eligible for the invalidity pension. For the first time, this will give the self-employed access to the safety net of State income supports if they have a serious illness or injury that prevents them from working without having to go through a means test. As a result, self-employed people who become ill or are injured and cannot work will no longer be told there is nothing for them because they have savings, assets or partners with a job. They will be able to avail of the same non-means tested payment as employees. This will be available by the end of 2017, most likely in December.

There will be no PRSI rate increase in 2017. Some people called for self-employed persons to have the option of paying a higher rate of PRSI to receive more benefits. On this occasion, I have decided to extend benefits without asking the self-employed to pay an additional contribution. These measures are all part of the Government’s policy of making work pay and encouraging self-employment and entrepreneurship.

A range of dental and optical benefits will also be restored. These will benefit all PRSI paying employees and the self-employed, benefiting approximately 2.5 million people. Subject to successful negotiations with dentists and opticians, which I hope will be easier than the negotiations with general practitioners, the free scale and polish of teeth and free glasses from opticians will be restored by the end of next year.

The budget also includes a package of measures supporting lone parents to encourage them into the workplace and education and help to reduce their child care costs. All lone parents on the one-parent family payment, the jobseeker’s transition payment and jobseeker's allowance will benefit from the €5 increase in the weekly rates of payment. A new €500 annual cost of education allowance will be made available to back to education allowance recipients with children from the next academic year in September. This will help all parents, not only lone parents, to return to education.

The income disregards for the one-parent family payment and jobseeker’s transition payment will increase by €20 from 1 January 2017, subject to the passage of the social welfare Bill. This will partially reverse previous reductions and encourage single parents to remain in or return to work. The increase will benefit lone parents earning more than €90 per week. For those earning €110 per week or more, it will increase the combined social welfare and earnings income by up to €15 per week. The single affordable child care scheme being provided by the Government will also significantly reduce the cost of child care for lone parents and is a step change in State support for child care.

The focus on children in the budget is on the provision of services, rather than income supports. Ireland already has the third highest child benefit payment in the western world. Where we fall down is on the cost of education and child care and access to services such as health and speech and language therapy. For this reason, resources will be focused on these areas in future. The budget includes the child care package I outlined, the extension of medical cards to all recipients of domiciliary care allowance and measures in education, for example, an increase in the number of teachers and special needs assistants and better and new school buildings.

For my Department, the main budget provision for children is increased funding for school breakfasts.

This includes extending the school breakfast programme to the new DEIS schools from next year. We are also opening the free breakfast programme to non-DEIS schools and up to 35,000 children in non-DEIS schools will benefit from free school breakfasts. This is in recognition of the fact the majority of children who are disadvantaged do not attend DEIS schools and very often attend a school in the parish next door. School breakfasts have been shown to increase attendance and improve concentration.

There is also a special increase of an additional €10 in payment for guardians who take care of orphans or children who have been abandoned by their parents.

As part of the Government’s commitment to rural Ireland, I am announcing the total reversal of cuts to farm assist, a programme which helps more than 8,000 farm families. The introduction of additional income disregards for farmers with children further ensures that farm families will benefit. At a time of falling farm incomes, it is essential we strengthen the safety net for farmers who are on the margins. Even farmers who do not qualify for farm assist have the reassurance that there is a strong safety net for them, should they need it. This is particularly important given, as I said, it is a time of falling incomes.

Many of the farmers who benefit from farm assist live in remote parts of the country, with very limited prospects for off-farm income. In recognition of the crucial work undertaken in rural communities under the rural social scheme, an additional 500 places will be made available next year. This will bring the total number of places up from 2,600 to 3,100 in 2017.

I must ask the Minister to conclude as he is sharing time with the Minister, Deputy Flanagan.

I will submit the balance of my script.

This budget takes place against a background of international challenge which is unprecedented, both in its scale and its complexity, in our political lifetime. The human tragedy which is unfolding in Syria, in the Mediterranean and, most recently, in Haiti is a backdrop to our contributions which we should all be mindful of in the course of this debate.

I am pleased to say that Ireland is playing a front-line role in the international community’s efforts to address many of these challenges. Ireland took a lead role in last year's successful efforts to agree a new set of global Sustainable Development Goals to 2030. This year, Ireland was again asked to take the lead at the UN in discussions on the global migration challenge. Our naval personnel are to the forefront of essential search and rescue operations in the Mediterranean. Our peacekeepers are deployed in Lebanon, Syria and Jordan, helping to maintain stability in areas critically affected by the conflict in Syria. Irish volunteers and agencies are to be found across the world in the most difficult operating environments.

These efforts are backed up by unprecedented levels of humanitarian assistance to the region. In recent days, I and the Minister of State, Deputy McHugh, approved the airlift of vital emergency relief supplies to the besieged city of Mosul in Iraq and to the people of Haiti in the aftermath of a violent hurricane. We announced further funding of €7.5 million for the Syrian people, which will bring our total humanitarian funding for Syrians since this horrific conflict began to €62 million by the end of this year. This is our biggest humanitarian aid commitment for many years and we stand ready to do more where we can. Our hearts go out to the Syrian people and we strongly support the UN’s efforts to bring this grotesque violence to an end. We want those responsible for the carnage dealt with by the International Criminal Court.

For the second year, the total allocation to official development assistance, ODA, has been increased. For 2017, the Government is allocating a total of €651 million for ODA, an increase of €10 million on the 2016 allocation. Of that, €486 million will be managed by the Department of Foreign Affairs and Trade for the Irish Aid programme, with a further estimated €165 million coming from other Government Departments and Ireland’s share of the EU development co-operation budget.

Of course, it is Brexit which formed the immediate backdrop to this budget. In recent months, there have been considerable discussions in government about the potential impacts of Brexit and how we could best Brexit-proof the budget in an environment and backdrop where much remains to be clarified, in particular by the United Kingdom, and where a complex and multi-layered set of negotiations lies ahead. Our goals as a Government in these negotiations, and my particular goals as Minister, are as follows: to protect and advance the enormous gains made through our own peace process; to prevent a hard Border reappearing on this island and ensure the circumstances necessary for this island economy to flourish; to encourage an outcome which retains the closest links between Ireland and Britain, on the one hand, and the UK and EU, on the other; and to ensure a prosperous and well-functioning EU with a strong and prosperous Ireland at its heart.

To this effect, a number of important steps have been taken or are under way. In respect of Northern Ireland, as I have made clear, the protection of the peace process is a central focus for the Government in terms of the negotiations ahead. I have spoken repeatedly of my commitment to protecting the invisible border across the island of Ireland. We are working closely with the Northern Ireland Executive. At the North-South Ministerial Council plenary meeting following the referendum, Ministers from North and South agreed to a Brexit-specific work programme between the Northern Ireland Executive and the Irish Government, including a full audit of key North-South work programmes. Our next plenary is on 18 November in Armagh.

Last week, the Government approved a proposal that the Taoiseach and I convene an all-island civic dialogue on Brexit to give an opportunity to those affected by the vote to make their voices heard, both directly and through their representative groups and organisations. It will also provide an opportunity to map the challenges presented by Brexit and how they might impact on different elements of society and the economy on an all-island basis. The main output will be a report and a series of recommendations which will be used to help inform the Government's position on the issue of the negotiations.

In preparation for the negotiations that lie ahead, a new EU division has been formed in my Department, headed by a highly experienced Second Secretary General and staffed by experienced officials reassigned from the Department of the Taoiseach and the Department of Foreign Affairs and Trade. Given the complexity of these negotiations, measures are being taken also to reinforce the Ireland-UK, legal and trade divisions of my Department. This will be augmented by additional resources in our key missions in Europe, in particular in Brussels, Berlin, Paris and London.

From a trade perspective, we are all acutely conscious of the importance of the UK market to Irish exporters. However, I have been working to intensify our focus on other markets. I believe we have the capacity for much greater market penetration in other EU member states and I am focused on that, but we are also looking beyond Europe’s borders. The next meeting of the Export Trade Council, which I chair, will take place on Tuesday and will focus on the Asia-Pacific region. I will shortly bring a memorandum to Government to advance the programme for Government commitments to introduce cross-sectoral whole-of-government strategies for Asia-Pacific and the Americas. Just one month after the referendum result, I joined the Minister, Deputy Mitchell O'Connor, to announce an expanded international trade mission programme of 68 events to the end of this year, including 26 ministerial-led trade missions. Last month, I undertook an engagement with Enterprise Ireland in New York and, in the weeks ahead, I will be leading trade missions to France, the UAE and Saudi Arabia. In last few weeks, our mission network has supported three ministerial visits to the Asia-Pacific region, where high level political visits are crucial to deepening and strengthening our trade and investment relations. Our missions will continue to support and facilitate the ambitious programme of trade missions planned for the rest of this year in co-operation with Enterprise Ireland, whose work I greatly value.

Earlier this year, I launched the economic diplomacy strategy that seeks to build on the consolidation of the Department's trade role in recent years by establishing a network of commercial attachés to extend the range and impact of our embassies’ activities in support of trade. This is being put in place in Mexico, Brasilia, Buenos Aires, Bucharest and Jakarta - locations where economic opportunities exist to be explored and where either there is no State agency presence at present, or, if there is a presence, it is a relatively light one.

I use all opportunities as trade Minister to promote Ireland as a country to invest in and to trade with. I am just back from the UN General Assembly where I gave a strong message that Ireland will remain at the heart of Europe, will continue to be an English speaking gateway to a market of 500 million people and will continue to offer a business-friendly environment and a talented and adaptable workforce. I undertook a similar set of meetings at the Asia-Europe summit in Mongolia in July. I have engagements in Europe and Asia in the coming weeks where I will continue to promote our strategic interests.

The budget allows my Department to continue with the innovation agenda for our passport services. Our modernisation process is underpinned by two drivers: a better service for Irish citizens and the need for ongoing adaptation to protect passports from exploitation by criminals. This year saw a huge rise in demand for passports, driven by a number of factors. There was a rise in the number of people travelling abroad, undoubtedly encouraged by the steady and sustained growth in our own economy and increasing confidence.

In the period January to August this year, in excess of 600,000 additional trips were taken overseas by Irish residents by comparison with the same period last year. That shows an increase of some significance. The big increase in travel contributed to a big increase in the demand for the passport services. Added to this, the outcome of the UK referendum on EU membership led to a strong growth in passport applications from Northern Ireland and Great Britain. The overall increase in demand from Northern Ireland in the first nine months of this year compared to last year is 25%, with a notable increase from July onwards.

In respect of applications from Great Britain, passport applications for the period January to September this year are up 40% by comparison with the previous year, having surged from July onwards and with demand in August 2016 almost 120% higher than in the same month last year.

Meanwhile, we have a responsibility to protect the integrity of the Irish passport by ensuring that it cannot be exploited by criminals who target travel documents as a means of facilitating illegal activity, including money laundering.

We have been using technology to improve our offering to Irish citizens. This time last year, I launched the passport card, a credit-card-sized travel document that can be used to travel to 31 countries within Europe. I am pleased that an additional €4 million has been allocated to the passport reform project in this budget. In the context of the budget, a priority for my Department will be protecting Ireland's strategic interest in the forthcoming Brexit negotiations, with a particular focus on the peace process. Other priorities include advancing Ireland's trade interests and continuing to modernise our passport service to ensure we can provide an effective and efficient service.

Debate adjourned.