I thank the Minister for coming to the House after a long day in the Dáil yesterday and having appeared on radio this morning, which is sometimes equally as challenging.
Budget 2021: Statements
I am pleased to have the opportunity to appear before the Seanad today to contribute to the debate on budget 2021. As I informed the Dáil yesterday, this year's budget has been prepared in circumstances that are without precedent. The outbreak of the coronavirus has hugely impacted individuals, communities, societies and economies throughout the world, and our country is part of this.
Economic activity in the Irish economy is projected to fall by around 2.5% this year with modified domestic demand, a better measure of domestic conditions, expected to contract by around 6%. Along, of course, with the immediate prospect of dealing with this disease, we continue to have Brexit on the horizon. In these most challenging of times, I am keenly aware of the impact of this disease on the lives of people and their livelihoods and of the need for us to find a balance between health and well-being. The substantial efforts we have made to date have focused on minimising the economic and social impact of this virus, cushioning household incomes and supporting micro-sized firms and small and medium-sized enterprises while strengthening the capacity of our healthcare system.
The highly fluid nature of this disease demands a response that can change. Our ability to respond in a timely and effective way is in no small part due to how our national finances were managed in recent years and, of course, the work of the European Central Bank. On this point, we are not facing into this challenge alone. The global nature of this pandemic requires and demands an international and coherent response. The actions of the European Union have complimented national measures and have allowed national policy decisions to achieve more.
Given the levels of uncertainty, the budget focuses purely on the coming year and is based on a number of careful assumptions. In particular, the central scenario underpinning budget 2021 is that bilateral trade between the European Union and the UK will be on WTO terms from January and that Covid-19 will continue to be present next year in the absence of a broadly available vaccine. Overall economic activity is not expected to return to last year's levels until at least 2022. In addition, unemployment is expected to remain high at around 10.25% for next year. This is why the Government is absolutely determined to do all we can to address unemployment, particularly among our young people. This has influenced the shape and size of this budget.
Significant resources were required to support policy actions to mitigate the impact of the pandemic. Against this challenging backdrop, the appropriate budgetary approach is to continue to provide support to our economy. This is why we are aiming for a deficit next year of €20.5 billion, or 5.7% of gross domestic product. Over the medium term we will need to correct that. For now, we need to act to support our economy.
Ultimately, budgetary policy will have to steer a course that sets expenditure and taxation at levels that allow us to reduce our deficit while at the same time supporting our economy and society. In finding this balance, however, employment growth is absolutely central to reducing our deficit and, in turn, allowing our debt to be safely managed. This was the context of the budget package yesterday.
Included within it is €8.5 billion for public services to address the challenges of Covid-19. This includes a €2.1 billion Covid contingency fund, €3.8 billion to support existing services, in particular those that are health-related, and €1.6 billion for core capital programmes. Capital expenditure will increase to €10.1 billion, the largest amount that has ever been allocated to invest in our schools, homes and public transport.
Alongside these measures, a targeted and time bound recovery fund worth €3.4 billion has been established.
This fund will be focused on infrastructure development, reskilling and training and supporting investment in jobs. This recognises that the business sector and the SME community are a cornerstone of our economy. Further supports will be provided by way of an extension of the tax debt warehousing scheme to include repayments of temporary wage subsidy scheme funds owed by employers and preliminary tax obligations for self-employed citizens who have been adversely affected. My Department has begun the process of applying for EU funding towards the cost of the wage subsidy scheme and, of course, will also seek to avail of the Brexit adjustment reserve.
I am conscious that while the employment wage subsidy scheme is due to remain in place until the end of March, a similar scheme will likely be required until the end of next year to provide greater certainty for businesses. A new scheme, the Covid restrictions support scheme, also provides targeted and timely support for businesses in restricted sectors or locations which are prohibited from opening temporarily or effectively closed due to restrictions introduced to contain the virus.
In terms of VAT, the standard rate reduction to 21% will be in place until 28 February. Yesterday, I announced a further VAT reduction for the hospitality and tourism sector to 9% with effect from 1 November and to continue to 31 December 2021.
With regard to income tax, I have made some specific and targeted changes. With regard to housing, from a taxation perspective, in addition to the many measures announced by the Minister for Public Expenditure, Deputy Michael McGrath, I am extending the July stimulus additional measures to the end of next year and I plan to make a number of changes to the stamp duty residential development refund scheme.
Another key issue I highlighted at the outset is climate change. We are making a further change in respect of carbon taxation in that we are ring-fencing the revenues from carbon tax to provide support to the most vulnerable. Our vehicle registration tax, VRT, tax regime will transition to the more robust worldwide harmonised light vehicle test procedure from January, with the aim of accurately relating the tax which people pay when they buy a new car or an imported car from elsewhere to the effect that car has on our environment. I am also changing a measure I brought in last year, namely, a surcharge relating to nitrogen oxide emissions.
Turning to corporation tax, I reaffirm our commitment to ensure that our regime remains competitive with the 12.5% rate at its core. However, I am alert to the changes that are developing across the world in this area. I have been involved in this over the past number of years and the Government will be publishing a further updated statement of our roadmap for corporate tax reform in the coming months. Finally, I am announcing the establishment of a commission on welfare and taxation with further details and its membership resources and terms of reference to follow.
I acknowledge the individual and collective efforts we have made to respond to this disease. It has not been easy. It has been so difficult for so many. As always, I extend my sympathies to the families of all those who have lost their lives and to people whose health has been affected. In recent months there has been true inspiration to be found in the strength and determination of our country to fight this disease. We have worked together to support and protect each other and we have taken tough but necessary steps to limit the damage and devastation caused by this insidious virus. We are all too aware that this disease will be a continuing presence in our lives for some of the future but, equally, we know we are up to the task of containing this invisible enemy and minimising its impact on our country.
The main message I want to convey today is that, while I accept that we are living in uncertain times and facing immense challenges, we can and will get through this. With this budget, the Government is seeking to provide as much economic certainty as it can to allow families and businesses to plan ahead and to allow individuals, families, communities and employers to have a sense of a different future. The Government is doing its part but all citizens continue to have a crucial role to play in fighting this virus. Through our common purpose and collective efforts, we will reduce the impact of this disease on our country and build a more sustainable and resilient Ireland.
I warmly welcome the Minister. Yesterday, we saw the introduction of the largest budget in the history of the State. It is designed to take us through the greatest challenges faced by the people of Ireland since the formation of the State. Each of these challenges is massive but together they present a clear and present danger to the health and well-being of every man, woman and child in Ireland. Covid-19, Brexit, climate change and our housing crisis are continuing to wreak untold damage on people.
This budget, the first since Fianna Fáil entered the partnership Government, is the most significant investment by the State in the history of Irish budgetary policy. The saying "Put your money where your mouth is" is rather coarse for this Chamber but it has meaning today. Just less than €18 billion is being put into action for one purpose, namely, to protect all our citizens against these massive threats to our nation. Yesterday's budget spending measures, as outlined by the Ministers, Deputies Michael McGrath and Donohoe, are designed to give hope the tools necessary to succeed. I am proud that Fianna Fáil in government stood true to its word and delivered a budget that can facilitate the commencement of the vital work of rebuilding our society and economy.
The immediate emergency is Covid-19 and the additional €4 billion for health will allow our front-line health workers to get the resources they need, not only to treat the pandemic but also to restart all our other vital health services, such as those relating to cancer care and mental health. Fianna Fáil pledged to bring in a step change in resources for mental health and disabilities if elected to office. A sum of €36 million is a good start for mental health provision for the coming year and €100 million for the disability sector provides hope that the State wishes to cherish all its children equally.
I have a strong interest in housing policy having served as Vice Chairman of the relevant committee of the previous Dáil. The budget is very strong on housing. We promised to hit the ground running and I am happy that this has taken place with across-the-board increases in respect of all areas of housing. We all know the massive crisis that exists in the context of housing and, ultimately, it is all about building houses. It is great that yesterday's budget is targeted at delivering a further 12,750 social houses. Some 9,500 of these will be built by local authorities and approved housing bodies. If one adds to this the 27,500 such houses that have been delivered in the past four years, it is obvious that we are beginning to see a consistent delivery of social housing through the relevant processes.
What has been forgotten in the past decade is the issue of affordability. Also forgotten are the people who do not qualify for social housing but who also do not have the income to allow them to buy houses. I am delighted that €110 million has been allocated in respect of affordable housing. I welcome the proposed shared equity scheme which, I believe, the Minister will be announcing today. This is a start and it goes back to the word "hope" again. It gives a generation a hope that they can own their own homes in the future.
I welcome the allocation in respect of deep retrofitting to provide energy efficient social housing. Most people here have served as councillors. Many local authority houses only need new doors and windows but we do not seem to have a scheme to provide them. I would like that matter to be that addressed.
An organisation that never gets credit or the focus it needs is Irish Water. We cannot be resilient unless we invest in Irish Water. It is not as sexy as roads infrastructure or other issues, but we cannot do without it. I welcome the commitment to provide an additional €44 million by the end of this year and the organisation's overall budget of €1.3 billion. However, we must ring-fence a percentage of that for small towns and villages in rural Ireland so that they can be sustained, grow and keep their services.
On job creation and sustaining jobs, I heard Opposition Members say there was no certainty. If I give the Government credit for anything, as a business person who has had his business closed, opened and closed again, it is that it has done all that it can in a very uncertain time to give certainty to businesses and employers to try to sustain their future. Yesterday's announcement of the Covid restrictions support scheme, CRSS, is a new and welcome approach. The Minister might consider changing the 80% threshold because we have support up to 70% and then we have support up to 20%. A little tweaking of the figures could help the 50% in the middle to sustain themselves. It is wrong to say that we have not given certainty. I cannot emphasise that enough.
I welcome the VAT reduction for the hospitality sector, as I am in the sector. I have admitted every time I spoke in the Chamber recently that it is all about our margins at the moment. It is all about cash flow. Anything that can help our cash flow and allow us to survive this period while we are trying to negotiate our way out is a help. A VAT reduction will help that. It adds 4.5% to our bottom line. That is its aim. There will be occasions where we will be allowed to use the 4.5% to provide a better offer and make it more attractive for people in the domestic economy to stay in hotels. Initially, however, it is all about the survival of the industry and having the cash flow to see ourselves through this period.
I also welcome the commercial rates waiver scheme and the employment wage subsidy scheme. Reference was made to uncertainty, but the Minister has provided certainty on all of these issues. The employment wage subsidy scheme has been guaranteed until the end of March 2021 and the same applies to the VAT rates. I have run out of time. My final message is that both Ministers gave hope yesterday that we will survive this, that people will keep their jobs, homes will be built and businesses will be kept afloat. I thank them both for that. I am sorry for exceeding my time.
This is a most unusual budget, which was introduced in the face of the coronavirus. For a start, that makes it extremely unusual and extraordinary. We are extremely fortunate to have this Government in place, in particular this Minister for Finance. The Minister knows very well I would say very clearly if I thought he was useless, but I have watched his career with great interest since the days when he sat in front of me here in Seanad Éireann. I remember his very clear grasp of financial matters, which was extremely welcome.
Large numbers of submissions came in and it was impossible to deal with them all, but I am sure the Minister has received most of them. I welcome the reduction in the VAT rate to 9% for the hospitality sector, but I wonder why that was not done earlier. It should have been done earlier.
I have a specific interest in the car tax, which I will declare. I have a lovely old Jaguar XJ 16.5 l, which I bought for €5,000. It costs me that, between tax and insurance, to keep it on the road every year. That is absolute madness. I made this point before when the Minister in the chair was Mr. Gormley. I said to him that he should put the tax on petrol, based on the polluter-pays principle. That is the most efficient way of tackling the issue and I return to it now. This crisis has produced a situation in which there was a possibility of readjusting the global financial system, as there was also with the economic crisis, to make things a little fairer and reduce the enormous, grotesque amounts of money that some individuals have in contrast to the poverty we see. However, the Covid crisis has increased this divergence, which is extremely sad. That is something that will have to be tackled in the long run.
One of the submissions I received was from the Society of St. Vincent de Paul, which is a marvellous organisation. It wants to extend the ban on evictions. How could people be evicted under these circumstances? The submission also asked that we put in place an adequate financial guidance and support package for tenants in rent arrears, to help them out. The psychological strain of being in this situation is very difficult. The submission also called for an increase in the rent limits for rent supplement and housing assistance payment, alongside enhanced rent certainty measures, so that supports are adequate and in line with market rents. It called for the designation of sufficient funding for the homeless prevention workers required under section 10 of the Housing Act 1988. I know the Minister will have received these submissions and I ask him to look at them very carefully.
Let us look at some of the sectors that are especially hit. Travel agents have been badly affected by the pandemic. They are very strongly in favour of the traffic light protocol, which I hope the Government will adopt as it would be very useful. Travel agents are probably the only sector that has had to keep paying employees, despite having no income. They have been in a terrible situation since 1 April.
The employment wage subsidy scheme is a help but it is not sufficient to keep businesses open considering all the overheads such as rent, electricity and telephone charges, IT costs, legal commitments, audit fees, insurance and financial charges, among others.
Disability is a very sensitive area. There was a call for a cost of disability payment to be introduced in budget 2021 to address the inadequacy of income support for people with disabilities. People with disabilities on low incomes should be properly protected against increases in the carbon tax. Additional funding should be assigned to address the digital divide to ensure that people with disabilities and other disadvantages are not left stranded during the pandemic. The wage subsidy scheme for people with disabilities should be improved to boost employment opportunities.
Turning to the international context, I have been contacted by Concern, which is another extraordinarily valuable organisation. Prior to Covid-19, a record 168 million people required humanitarian assistance. That is a hell of a lot of people and we are a rich country. Now, thanks to Covid-19, that number has rocketed to 421 million. This is a disastrous situation. We must maintain the overseas development aid, ODA, budget. This is a song the Minister may remember me singing loud and clear in the Seanad when there was a possibility that it would be reduced. Concern suggests that we recognise the humanitarian need precipitated by Covid-19 and allocate additional funding accordingly. It says we must work to ensure the Government's budgetary support to Irish organisations such as Concern is adequate and proportionate to the amount allocated to multilateral mechanisms.
Returning to the domestic situation and housing, I know the Government has made a very brave and courageous commitment. Taking into account the fact that if we go to level 5, which I think will have to happen, unless extraordinary measures are introduced to protect the building industry, building sites will close down as well. How are we going to get those houses built? I simply do not know.
Then there is the question of the psychological services. I have a great friend who is a psychotherapist. I suggest that in response to this situation tax relief be provided for counselling and psychotherapy sessions. I also call for an extension of the medical card service and the benefits under the PRSI system.
On aviation, Aer Lingus has been hopeless. It has not supported its employees but as far as I can see, the Government has not supported the employees either. We should do something for them. On top of that, Aer Lingus is being difficult on the issue of social welfare benefits in not supplying the information and filling out the forms. There is an awful lot more I could say, for example, on the Irish Cancer Society.
I had a thick file to bring into the Chamber. I am very grateful for the time I have been allowed and I congratulate the Minster on his wonderful work for this country.
What a difference a year makes. The Minister is welcome to the Seanad. It is an extraordinary budget for an extraordinary time. Last year, the greatest challenge facing our country was Brexit and budget 2020 was framed with Brexit in mind. Budget 2021 has been framed with not one but two extraordinary challenges facing us, namely, Brexit and Covid-19.
We are in the midst of a global pandemic battling an invisible enemy that has worryingly regrouped in recent weeks, a stark reminder that we are nowhere near the end of it. Every country in the world has been impacted by Covid-19, their economies devastated and lives and livelihoods lost. At home, domestic demand has fallen by approximately 6% and 320,000 jobs will have been lost by the year end. Our deficit has been forecast to be €21.5 billion.
We cannot forget for a moment the threat that a disorderly Brexit poses. I am reassured by the fact that the budget has been prepared on the basis that there will be no trade agreement between the EU and the UK, although we all hope and would prefer if a comprehensive agreement were reached by 1 January. It is within the parameters of Covid-19 and Brexit that budget 2021 should be reviewed.
This budget is the largest investment in the history of the State. It continues the swift action to support people, businesses and communities throughout the country. The rainy day fund from last year along with the careful and prudent management of the finances of our country in recent years have enabled us to access the funding that is needed now. This point is lost on many people. The budget has a range of measures to support households, businesses, farms and communities, including €8.5 billion for Covid-related supports and an increase of €1.6 billion to bring to €10.1 billion the investment in longer term capital infrastructure.
While the expenditure elements of the budget garner more attention in the coverage for various reasons, the policy changes relating to revenue, taxation and other financial supports are equally important. Let us consider the personal taxation measures. I warmly welcome the increase in the earned income tax credit to €1,650. This brings the figure into line with the PAYE tax credit. We introduced this measure several years ago in recognition of the risk that self-employed people take to create business and jobs. That is most welcome. I welcome the significant increase in the dependant relative credit from €70 to €245. This is clear recognition of the work of so many people throughout the country who care for a relative in various ways. The importance and value of caring have been amply demonstrated this year on account of Covid-19. This measure is an important statement of the type of society we wish to be.
The increase in the ceiling of the second category of the universal social charge will benefit all workers but especially those on lower incomes. With the extension of the help-to-buy scheme, which provides up to €30,000 or 10% of the purchase price of a new home, we will continue to support people to buy their first home. The increase in the carbon tax is a necessary step to combat climate change. I am heartened by the inclusion of enhancements to the living alone allowance and the fuel allowance which will protect the most vulnerable.
In addition to the positive changes to personal income tax measures, the budget also contains key financial policy changes to support businesses and specific sectors. The new Covid restriction support scheme will support businesses that have closed or endured a substantial decrease in turnover on account of Covid-19. The scheme will be of particular importance to businesses in the hospitality, tourism and entertainment sectors that are impacted by various levels of the living with Covid-19 plan. It will, insofar as is possible, provide certainty and enable businesses to continue to meet fixed costs. The scheme, along with the employee wage subsidy scheme, will be vital in supporting viable businesses and maintaining jobs. Another vital support for the entire country, especially for counties dependent on hospitality and tourism, is the reduction in the VAT rate from 13.5% to 9%, effective from 1 November. Will the Minister set out what amount was raised from the recent increase in that tax? Was it in line with projections? I know the industry representatives have said the projections were overestimated. Taken with other supports, including the wage subsidy scheme and the stay-and-spend scheme, the VAT cut will be instrumental in supporting sectors that have been heavily hit by the pandemic and the necessary public health measures.
While the revenue raising measures and additional spending that budget 2021 involve are necessary to support households, businesses and communities, we cannot escape the responsibilities that borrowing such vast sums of money bring. I have no doubt that running a deficit and spending reserves, such as the rainy day fund, are the right steps to take at the moment. However, we cannot ignore the risks. An increase in interest rates - it is a case of when and not if - will push up the cost of borrowing and make accessing new finance or restructuring existing liabilities more expensive. Such outcomes will have consequences for the spending choices of the Government. How much have the changes to the EU rules on the deficit changed due to Covid-19 facilitated this increase in borrowing in budget 2021?
It is essential that we ensure proper oversight of this additional expenditure. It is essential that we avail of EU supports such as the instrument for temporary support to mitigate unemployment risks in an emergency, among others, designed to support member states and their citizens. It is also essential that we engage only in sensible and responsible borrowing with a focus on gradually reducing the deficit and leading towards balanced budgets once again.
No one can say how long Covid-19 will continue to impact on our lives but we must hold on to hope and keep in mind the work of so many researchers, scientists and others who are working to develop vaccines and treatments that will enable our communities and countries to return to normality. Again, I thank the Minister for his work on budget 2021.
I welcome the Minister. When I was listening to the speech yesterday I was minded of the great philosopher and musician, Noddy Holder, who, in 1973 on "Top of the Pops", screamed through the microphone, "I said Mama but we're all crazy now". It is nice to see the Government move ever so slightly to the left. It is fair to start with some positives on the budget. As the House knows, Sinn Féin likes to give a balanced approach to these matters.
I welcome the additional funding for disabilities. I pay tribute to the many campaigners in that sector. The Government has made a good start this year. I also welcome the education funding. We would have gone further. We would have made a difference of two points in the pupil-teacher ratio, but one is still welcome. We want to especially welcome the funding for the shared Ireland unit. Again, we would have made it €140 million instead of €100 million, but it is important to recognise it. We also recognise the Christmas bonus. It is not technically part of the budget but it is important that people know that it will be included.
In a similar vein, we regret that the increase to the minimum wage next year is a pitiful 10 cent. This has led effectively to the end of the Low Pay Commission, as matters stand. That is more than regrettable in terms of the way that has worked out.
Overall, we are disappointed and I will summarise why that is the case. Yesterday was clearly a day for action but there was no relief for the people who saw their pandemic unemployment payment cut. There was no relief for renters. There was no right to a pension at 65 years. There was more new money for developers and landlords than for genuinely affordable housing. Nothing was delivered for families paying the highest childcare costs in Europe. There was not enough to help small businesses survive. We will see increasing costs for people throughout rural Ireland with carbon taxes and motor taxes. There is little ambition to get to grips with the crisis in our health service.
Our first priority would have been those who are struggling and barely clinging on having lost jobs and incomes, those who need the pandemic unemployment payment restored, those locked out of home ownership in the middle of a pandemic as well as the renters who simply need a break. The Minister should have reversed the cut to the pandemic unemployment payment for those who have lost their jobs as increased restrictions are reintroduced. Unfortunately, he did not do so. The Minister should have reversed the cut to the temporary wage scheme, but again he did not do so. This means we will have businesses closing unnecessarily. This means families slipping into further debt and, in some cases, at risk of losing the roof over their heads. The Government should have grasped this unique opportunity to have the largest house-building programme in the history of the State while stimulating the economy, addressing the affordable housing shortage and giving people real hope in these difficult times that they can secure a home for their families.
I will go into further detail about the housing issue. The new Government has failed its first and most important test on housing. The Minister for Housing, Local Government and Heritage, Deputy Darragh O'Brien, has failed to secure the level of capital investment required to tackle the social and affordable housing crisis. This is more of the same failed policy of the previous Government. It is a missed opportunity to invest in a truly ambitious public housing programme. I will highlight some key points. The budget was totally silent on the needs of renters. We saw 593 extra real social homes above what had already been committed to for 2021 by the former Minister, Deputy Eoghan Murphy, in Rebuilding Ireland. Only €110 million for affordable housing split between 400 cost rental homes and an as yet undefined shared equity scheme. There was no additional funding above what had been committed for local authorities to deliver affordable homes to rent or buy on council land.
There were no targets for affordable homes to rent or buy in 2021. Perhaps most disappointingly, more new money will go to private landlords and developers. Some €208 million more will go to the various housing schemes than will go to genuinely affordable homes for working people. Less than €110 million is set aside for affordable homes when the shared equity loan element has been deducted.
I also want to raise the issue of health. The Government failed to adequately invest in critical care and intensive care beds. This is the fundamental reason we were so vulnerable to Covid-19 last March. It remains the key reason that we are so vulnerable to a second wave. The Government has only provided for 66 ICU beds, an increase of only 41 from where we are now. Sinn Féin would have delivered an additional 100 ICU beds. The Government announced 1,146 new acute beds for hospitals but what the Government did not tell us is that the difference between the number of beds we will have at the end of next year compared with this year is just 107. The Government was double counting and was including temporary beds that it intends to close. The Government once again failed our front-line healthcare workers. Yesterday was a day to turn claps into actions and deliver pay equality for nurses. Sinn Féin would have used this budget to deliver this. The Government failed to provide additional home help hours beyond the winter plan, which ceases in April. Sinn Féin, on the other hand, provided for an additional 1 million hours.
The cut in support for the employment wage subsidy scheme, EWSS, from €410 to €203 was short-sighted and should have been reversed. Extending this flawed scheme to the end of the year at the lower rate is far less than what was required. It is widely accepted that subsidising the wage bill of employers and keeping the connection between employee and employer is one of the most important interventions we can make. Cutting it to this level has already forced businesses to close their doors and has moved people onto the PUP, which is more costly to the State. There is no logic to such an approach. Our proposal will allow a maximum of €410 for the most affected sectors, namely, the hospitality and tourism sectors and parts of the retail, arts and leisure sectors if the business suffers a 50% downturn.
The retrofitting programme is welcome. Sinn Féin supports any measure that simplifies and makes green energy grants and supports more accessible. However, the Government's announcements on plans to introduce a national retrofitting programme are deeply flawed, as they require many householders to acquire more personal debt to retrofit their homes.
There are many more points I would like to make but I am sure my colleagues will do so in due course.
I thank the Minister for coming into this House. There has been a lot said about the historic nature of yesterday's budget. It was the single largest budget in the history of the State and there were important elements in it to support businesses and various sectors of society. There were a number of missed opportunities and serious oversights in this budget, however, and they undermine the project to rebuild the livelihoods, lives and jobs of workers and families.
We have seen billions of euro rightly being allocated to keeping the economy afloat but it was a mistake to not look at how we allocate some of that money. In particular, when I look at the likes of housing, which Senator Moynihan will talk about, there was the promise of delivering more housing through direct builds and less through the private rented sector and yet, we saw that turned on its head yesterday.
On the employment wage subsidy scheme, there was a real opportunity, not only to keep businesses afloat but to enable and empower workers to train during the hours that they are not working with their companies. The Labour Party clearly said in the run up to the budget that we need to use the employment wage subsidy scheme to both train workers and support firms, following the example of what is happening in Germany and the Netherlands. Unfortunately, that did not happen.
The other key issue for me with the composition of the budget is that there are holes in how we make our workforce, and those who are out of work, more resilient and ready to take up jobs in the future. To be frank, unemployment will be the single greatest challenge this Government will face. There is also an issue with income supports for those who are out of work. The number of training and skilling places that were announced yesterday are to be welcomed but there is a serious issue that if somebody has to take up the back-to-education allowance or the vocational training opportunities scheme, VTOS, allowance, they have to move from the PUP payment to the jobseeker's benefit and so they must take a loss in income support to take up that training.
The following point has not been aired well in this debate so far. We saw an exodus of almost 90,000 people from the labour force in the middle of this year. These are not people who would come up in the unemployment statistics, rather, these are people who have come out of the labour force and who are not looking for work. A disproportionate share of them are women and if we are to encourage women back into the workforce - we need more women in the workforce if we are to boost the Social Insurance Fund and pay for the pensions of the future - then we need to look at the issue of childcare. It was disappointing that no effort was made to ensure there was more affordable childcare for families. In the case of those working in childcare, which has a workforce that is predominantly female, people suffer low wages in that sector and it is disappointing that no effort was made to ensure greater access to affordable childcare in the country yesterday.
I thank the Minister for coming to the House. I will address some of the issues around the much lauded largest ever investment in housing. The pandemic has exposed the cost of our broken housing system. We see people in low-paid jobs not just sharing rooms but hot bedding, renters being evicted and the crisis in social housing and homelessness continuing. The spin is that this is the largest investment ever in housing but when one drills down into it, the detail shows little progress. Anybody at the coalface of the housing crisis will get little relief from what was announced yesterday.
It is clear that there is nothing in the budget that will address the underlying causes of the housing crisis. Extra funding for homelessness was welcome but without radical State building, it will not address the root of the problem and Housing First should be the strategy when it comes to addressing homelessness. Our two-tier system will continue unless the State finally stops relying on the private market and on developer-led planning. The much lauded increase in capital spending will only add 593 direct build houses to the Rebuilding Ireland housing stock targets for 2021. There is no mention of the 7,000 houses that have not been built this year because of the impact of Covid-19. That is not nearly enough to make a dent in the 50,000 houses over five years that we were promised in the programme for Government and it is a lot less than the 80,000 we need at a minimum.
Following the loss of thousands of jobs since March, the ending of the eviction ban and the imposition of level 3 travel restrictions, there is nothing in this package for renters. The Government continues to pretend there is not a crisis in the private rented sector and that there is not a looming rental arrears crisis. Perhaps the most telling part of the budget for me is the so-called affordable housing package of €110 million. When I saw that yesterday, I wondered who wrote the housing section of this budget and who had the audacity to call it the affordable housing section. It looks like we are back to the days of the construction industry setting housing policy for us. The shared equity scheme has been promoted in its pre-budget submission by the Irish Home Builders Association, which is a subgroup and an offshoot of the Construction Industry Federation. The so-called affordable measures of a shared equity scheme and the insistence on continuing the help-to-buy scheme at the inflated grant level of €30,000 will simply drive up prices for young people, while padding the pockets of developers.
Fianna Fáil in government has not reversed the disastrous policies of Fine Gael but it has added to our problems through its insistence on shovelling money to developers through the so-called affordable housing plans and the help-to-buy scheme.
There is one certainty about where we are, namely, that it is uncertain. Considering the complete uncertainty of the situation, the challenge the Government faced was mammoth.
In a record spend of €17.75 billion, there are a number of headline figures to which my colleagues have already alluded. There is so much to be welcomed about the €4 billion on health. Ill winds blow good fortune and some of that investment, leaving aside the Covid-19 part of it, might remain with us in the long term.
The record €5.2 billion spend on housing has got to be welcomed.
At the heart of the Government's budget is that it boosts business, although it invests heavily in public services also. It was a war footing budget and business was at the heart of it. Not so long ago, there was criticism of budgets in which the Minister for Finance, Deputy Donohoe, may have been involved to the effect that there was something for everyone in the audience or a little bit for everyone. This is the complete opposite. We will not have that argument from yesteryear. This budget did not go down the populist route. It went down a macro visionary route whereby the Government has recognised that business will drive the economy and protect individuals' jobs. Support of up to €5,000 per week for businesses is a lifeline. A number of business owners have been in touch with me since it was announced and they were emotional about that. With a bit of luck they can survive, thanks to the initiative of the Minister and the Government.
This budget is very different. It is not seen through the lens of the welfare State. It is not a case of one for everyone in the audience. It is a visionary budget. I accept it will not please all the people.
I do not wish to be critical but, with respect, some of the Opposition responses to the budget yesterday struck me as being scripted. I felt some of them were stumped because of the record spend in this budget. There is such a thing as constructive opposition but a test of any budget is not necessarily about the Minister for Finance or the Minister for Public Expenditure and Reform. We should listen to the stakeholders, who have welcomed it, albeit with a qualified welcome. There is a lot more positivity today than before the Minister, Deputy Donohoe, took to his feet in the Dáil yesterday.
I welcome the €1.8 billion investment in sustainable transport and the DART+ programme. Unfortunately, it stops in Maynooth and does not go on to Kilcock. It stops in Leixlip also and does not go on to the capital town of Naas but that is a conversation for another day.
Staying with "The Late Late Show" theme, it might not have the popular viewings of yesteryear but at the time of the caretaker Government the Taoiseach, Deputy Varadkar, threw down an invitation during a live conversation with Ryan Tubridy. He said that if the Green Party really wanted its agenda implemented this was an incredibly opportune moment to tie down Fianna Fáil and Fine Gael in that regard. There will always be an Opposition but he said that if Fianna Fáil and Fine Gael, the two big bastions of democracy in Ireland, were on the Green Party's side in communicating its message to the country, it was an opportunity it could not give up. We did not give it up.
The €7.50 increase on fossil fuels brings that to a total of €33.50 per tonne of carbon. Crucially, that will reach €100 per tonne of carbon by 2030. Carbon tax, which the Green Party has been fighting for over years, is now guaranteed to increase each year. The Government has done that by taking politics out of it. I know there is broad agreement in the Oireachtas but the die is cast in respect of the tax on carbon and the issue is now outside of party politics.
There is a major redesign of motor tax and vehicle registration tax, which is to be welcomed. It got off to a poor start the last time the Green Party was in government. At the heart of this way of doing it is just transition. We must protect the most vulnerable. My party leader, Deputy Eamon Ryan, tweeted a graph yesterday showing that the lower income households in the bottom four deciles, according to an analysis done by the Department of Finance SWITCH model, are the most protected in this budget.
The living alone allowance will be increased by €5 and the fuel allowance will be increased by €3.50 per week. In terms of targeting child poverty, the €5 increase for children over the age of 12 and the €2 increase for children under the age of 12 is to be welcomed - the increase for a qualified child.
Every party loves the arts but the arts and heritage are particularly cherished in the Green Party. Those two sectors have been given a huge boost in the budget. For the first time, live entertainment has been recognised. It was centre stage in the Minister's speech.
In terms of overseas aid, we are very proud of what Ireland has done. In tough times we saw the bigger picture and increased that aid to approximately €30 million.
I listened to the interview with the Minister and the Minister for Public Expenditure and Reform, Deputy McGrath, this morning. It was harmonious, uplifting and represented a new beginning for this Government. I believe this Government has found its mojo. It was unfortunate in that it had a difficult start but it is pulling for Ireland in a harmonious and united way. I wish it well as we go through more difficult times. I am concerned about how the money will be repaid. Eventually, in the next budget or budgets 3 or 4, taxation measures will have to be introduced but these first steps are to be welcomed.
I am a Senator from a Government party but if I was to be objective about this budget, I would have to welcome it. Senator Casey outlined in great detail many of the wins in this Government's budget. The Green Party welcomes and supports it.
I welcome the Minister, Deputy Donohoe, to the House. In his speech yesterday he highlighted two underlying assumptions in respect of this budget, first, that Covid-19 will remain with us for a long period of time and, second, that, unfortunately, we may be looking at a scenario of Brexit without a deal from January. I would agree with both of those assumptions and it is important that they are factored into and reflected in the budget. However, there is a third assumption that underpins this budget, and has underpinned fiscal policy for a long period of time, which needs to be challenged and re-evaluated. That third assumption is that reducing the deficit must remain a priority and be a central focus, even in a time of crisis. That assumption goes against what we have heard from international institutions not simply responding to the urgency of Covid-19 but also in terms of learning from some of the mistakes that were made in response to previous crises we have experienced.
There is a point I need to nail down. I worry sometimes that we might forget history. We know what happened when risks developed in our national finances. We will not let that happen again. We really need to be clear on history. It was not public expenditure that caused the financial crash in 2008. It was inappropriate speculation by financial actors followed by an extraordinary act in terms of a State having to bail those out. It is very important we do not have a retrospective narrative that somehow we did public expenditure before and it all went wrong. That is not the case. We need to be clear on the history.
We also need to be clear on the fact that others have learned that we do need stimulus. I recognise that there are steps towards stimulus in the budget but we need to look at valuing that stimulus in a crucial way. We know that the EU has suspended some of its fiscal rules for the coming two-year period. That is not indefinitely but those are two years in which some of the issues we always hear about such as something having to be off-balance sheet or on-balance sheet are allowing for large-scale transformative public expenditure. This is a chance not simply for the public expenditure we need to respond to the crises in terms of Covid-19 or Brexit but to remake our public expenditure in a way that prepares us for the future climate crisis. In this budget and, crucially, in the next one, we have an opportunity to operate outside some of the constraints we faced previously in terms of having resilient public services, hiring enough public servants and having systems that will carry us into the very challenging decade ahead.
To what extent will that vision, and the recognising of the need for front-loading action during the suspension of the fiscal rules, be reflected in the national economic plan? To what extent has the Minister applied the principles of equality-proofing and gender-proofing to his section of the budget? I refer not simply to public expenditure but to those other aspects of the budget. To what extent will those commitments to equality-proofing and gender-proofing be reflected in the national economic plan? To what extent will the sustainable development goals, and the very micro and specific targets we have signed up to in regard to them, be reflected in the national economic plan? Even the European Investment Bank, for example, recognises that the sustainable development goals need to be integrated.
Will the Minister clarify the relationship between the proposed recovery fund and the EU recovery fund? Is this where we can expect that portion of the recovery fund from Europe to be routed through? The recovery fund is not simply an opportunity to support business. That is important, but not everything can be done through business, as we saw in our Covid-19 response. Sometimes it is about public employment, public services or public infrastructure, and the State as an employer and a driver of the economy, not simply supporting business to drive the economy but in itself as an innovator and creator of economic action.
There are concerns about a K-shaped recovery. We do not want to see headlines where the economy recovers but jobs do not. That is the fear and the danger if we do not approach this correctly. We were told, when the Financial Provisions (Covid-19) (No. 2) Bill 2020 and the Credit Guarantee (Amendment) Bill 2020 were moving through the House, that increased public expenditure would be clear and forthcoming. We have heard something about transport but I have concerns about housing. Short-term leasing was what was used ten years ago and it has given us problems now. How can we ensure there is not just leasing but also building of public housing? They are questions for the Minister for Public Expenditure and Reform.
I am concerned about climate action. Will the Minister, Deputy Donohoe, clarify that it is not his understanding that climate action and retrofitting must come from the climate action fund and that other resources within the financial budget will be dedicated to issues such as the rewetting of bogs and retrofitting? We do not want to set a constraint that there is only one well from which climate action can be drawn.
We spoke about the impact of Covid-19 on young people. I worked with rural young unemployed people during the previous crisis. Unemployment is a key issue but it is not simply about work. There are also youth services. The mistake of cutbacks on community development services and youth services in the previous recession had a very damaging impact. We need to learn from and avoid that. Similarly, there are measures in the budget to prevent people from falling into poverty, but those who are already in poverty are not as protected as they should be. I am concerned about renters, as well as those who are at high risk of poverty or in consistent poverty.
I would appreciate the Minister's response to these issues. I apologise that I must step away to the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach, but I will read his contributions with great interest.
Budget 2021 is colossal in both scope and spending levels, with an overall package of almost €18 billion. It will do exactly what the country needs it to do at a time of great uncertainty for Irish people and Irish businesses. I am unaware of any time in our State's history when our country and economy faced such severe challenges, with the double threat of a prolonged global pandemic and the possibility of a bad Brexit deal. The Ministers, Deputies Michael McGrath and Donohoe, did a good job yesterday of striking a balance between borrowing what is needed, spending to support the most vulnerable indigenous businesses and looking to the future with a contingency fund of €5.5 billion to allow for additional spending in social welfare, health and Brexit supports as they are needed. This flexibility shows a Government that is agile and dynamic, ready to move and deal with the uncertainty and changing needs of our country in the year ahead.
There was little scope yesterday to be negative about the budget, given how much was being spent to protect our people and economy, but some in opposition nonetheless scrambled to find any fault they could, simply for the sake of finding fault. The general public's reaction to the budget, however, has been very positive, with the hospitality and retail sectors broadly welcoming it.
In the area of business, and in particular hospitality and retail, the reduction of the VAT rate to 9% is very welcome. I am sure every business in hospitality and retail in the country breathed a sigh of relief yesterday as that measure was announced. It will help to ease pressure on those sectors most impacted by Covid-19. The supports for businesses that are closed due to the restrictions of level 3 and above, of up to €5,000 per week, are also very welcome. The two supports, as well as the extension of the wage subsidy scheme, are so welcome and there was a sigh of relief across the board. In my county of Mayo, particularly in the areas of tourism and hospitality, which are major employers, people in business were worried for the future. These supports, however, will keep the wolves from the door and help businesses to survive and to protect jobs by creating much-needed cashflow to address the overheads that remain even when their doors are closed.
My colleague, Senator O'Loughlin is sitting beside me. I commend her and the Minister of State, Deputy Butler, on a dementia package of almost €13 million. I thank them for the new memory assessment and support service hubs, one of which is to be located in County Mayo, with the other three in Sligo, Waterford and Wexford. This will mean people can get an assessment and, hopefully, early diagnosis and treatment in their communities and regions, without having to travel to St. James's Hospital. From speaking to people in County Mayo, I know this has been very welcome in that community, which should look forward to the opening of those services in the latter part of 2021.
This pandemic has shown how important education is for the well-being of our children. I was pleased to see the teacher-pupil ratio reduced in the budget. We have some of the largest classroom sizes in Europe and this is a positive step towards addressing that. The budget has delivered a one-point reduction in the pupil-teacher ratio for primary level to 25:1, an historic low. This will, in turn, create hundreds of additional staffing posts in the primary system, an important step that takes into account the Covid-19 pandemic and the pressure it has placed on every school in the country. More than 400 additional posts for children with special educational needs have been allocated, as well as 265 additional posts to meet demographic demands. Another important aspect of the budget, and one I raised directly with the Minister for Education and Skills, Deputy Foley, was the need to address the decline of small rural schools. That there has been a delivery of a three-point reduction in the number of enrolments required to maintain an existing teacher has been welcomed by many rural schools.
I turn to the area of carbon tax and climate change. Living in a rural community, I know that many are worried about the cost of fuel, whether diesel or petrol, and the impact that may have. Broadly speaking, however, people understand the need to tax pollution and carbon. People appreciate that doing this is not about collecting money but rather about changing behaviours. Gradually increasing the tax and addressing it in the years ahead, and giving people advance notice of the changes coming, will change behaviour. I fully accept that electric vehicles are expensive, but those who can afford to change their cars to cleaner, more efficient vehicles should do so. It is in the interest of protecting our environment, keeping our air clean and protecting the country and environment for children in the future.
One important aspect of the package was the social welfare measures to protect those most vulnerable to these changes. Accordingly, we have created a very progressive carbon tax system. This means we will spend the carbon tax we take in on retrofitting homes and funding environmentally friendly agri pilot schemes. This is most welcome and progressive and it is something younger generations want to see. We have to protect our climate and environment for generations to come and we must start that in this budget.
I spoke directly with the Minister, Deputy Michael McGrath, about the support for students and, in particular, the €50 million hardship fund. We in Fianna Fáil are really proud of our tradition in education. We see education as the great equaliser. Every child and student in the country should have access to the best possible education and money should not be a barrier.
As somebody who had a part-time job all the way through college, I would not have been able to go to college were it not for access to part-time employment. Many students facing into the college year without access to a part-time job face the prospect of not being able to go to college this year. Having access to a hardship fund will alleviate that pressure and ensure access to education for every citizen.
The next speaker is Senator Ahearn who I understand wants to share time with Senator McGahon. Is that agreed? Agreed.
I welcome the Minister to the Chamber. We are living in a different time at the moment and this budget reflects that space we are in now in terms of the amount of money we are borrowing and investing. We are, however, doing the right thing. As Senator Chambers mentioned, it seems almost impossible to be against this budget with the amount of money we are investing in it but, somehow, the Opposition has still managed to find a way of being against funding and investing in our country.
I welcome, particularly, the €4 billion for health. It is important. Much of it was flagged beforehand but never before have we seen so much money put into health and for obvious reasons this year more than most.
The €3.3 billion put into housing and the extension of the help-to-buy scheme is important for people to get a start in life and get on the property ladder.
In terms of justice, I welcome the announcement of 620 new gardaí coming through in 2021 which increases the force to more than 14,500. Templemore in County Tipperary is where they will be trained so, obviously, it is important for me.
The €23 million extra funding in rural affairs for projects under the Department of the Minister, Deputy Humphreys, is massive for local or small communities which will get €10,000 or €20,000 for local projects. There was an announcement this Monday on projects around the country and it means an awful lot to them. The extension and the extra funding on that is important.
I will focus some of my time on the announcements for businesses and enterprise and trade. I believe the Minister will agree with me that since Fine Gael has been in government we have prioritised businesses and jobs since 2011. Whether that is the Action Plan for Jobs brought through by Deputy Richard Bruton that sought to have 100,000 extra jobs, which most people did not believe would happen at the time but it did and exceeded that, we as a Government have always supported jobs. Yesterday is a prime example of that.
The VAT rate reduction from 13.5% to 9% is huge for businesses, even in my area in towns such as Cahir, Cashel and Lough Derg in north Tipperary which would be predominantly tourist hotspots. This reduction is a massive security for them. The extension of the commercial rates holiday is really important. The extension of the employment wage subsidy scheme through to 2021, should it be required, is important. It gives people and businesses certainty. The most important thing is the new Covid-19 restrictions support scheme of up to €5,000 for businesses. That is massive for businesses to get them through the next number of months and survive and thrive again in 2021.
Yesterday in the Dáil, the Minister said the climate crisis is the greatest crisis facing our generation. As a result of my role in this Chamber as the Fine Gael Seanad spokesperson on climate action, I wish to focus the majority of my remarks on the climate action measures we put forward in the budget yesterday.
The budget had measures in it that were transformative in terms of the green aspect. It will help us to make the move as a society towards a green economy and, more importantly, a low-carbon society. We did that through a whole range of measures. When I look, however, at the amount of effort governments around the world put towards the Covid-19 crisis, I believe we need to take the energy we are putting behind the Covid-19 crisis and move that towards climate action because that is the greatest enemy the safety of this planet is really facing.
When we look at the carbon tax we have increased, the Minister said yesterday that not one single cent or euro will go to Government expenditure, it will go right back to Irish citizens to help the most vulnerable in our communities reduce their carbon emissions and footprint and insulate their homes. We saw that with the retrofit programme which, as far as I am concerned, is one of the most ambitious projects in this budget whereby we will be able to retrofit homes right across Ireland and reduce people's energy bills. Overall that will benefit our climate.
We have put €109 million into the warmer homes scheme which will go towards the free energy upgrades of people from low-income families and backgrounds. We are talking to businesses about the targets they must reach and how they can go about meeting those reduction targets.
Equally, the grants for electric vehicles are substantial. We have seen grants for home and public charging points. More importantly, we have seen even more investment than ever going behind our national infrastructure network. We make the transition to electric vehicles simple by making it simple for individuals to make that change. We are doing that by putting substantial money behind it.
I will conclude because I do not want to take any more time away from colleagues. This was a transformative budget in terms of green issues and transforming our economy and society towards a greener economy. That is what we must do if we have any chance of this country meeting its required targets by the end of this decade in 2030.
I thank our two colleagues for absolutely accurate timing because we are under pressure. Senator Craughwell will share time with Senator Conway.
First and foremost, I wish to thank the Minister for the calm, cool way he has dealt with the coronavirus to date and the reassurance people get when they see him on TV. He has had, however, too many people compliment him today so I might as well join the Opposition. I refer to the Moorhead report. The Minister's councillors and foot soldiers had been expecting something in this budget. I sincerely hope that by the time we get to the Finance Bill there will be something there for them. They are the people out there on the ground doing the hard work to support this Government, their political parties and, more importantly, their communities.
I welcome the additional 600 gardaí and 500 civilian employees which will put the best part of 1,100 more gardaí on the street. That is to be welcomed. I also welcome the initiatives the Minister has taken in housing. They are of particular interest to me.
Today, however, I am more concerned about the Defence Forces than anything else. The Minister was at the launch of the high-level plan which is now months behind time and we do not really know where it is going. The current expenditure budget for 2021 is €14 million, of which, €10.5 million is already gone. That leaves €3.5 million to deal with allowances in the Defence Forces. The Minister cannot be unaware of the fact the Defence Forces is disintegrating as we speak and yet, at a time of crisis in this country, the Naval Service provided testing facilities in Dublin Port, Cork and Galway. The Army provided transport and erected pop-up testing centres all over the country. The Air Corps provided mercy missions and flew Covid-19 tests to Germany for testing yet, as I said, the high-level plan is behind time. An opportunity was missed to compensate members of the officer cadet training wing who suspended their training to support the country during a testing period and, for all intents and purposes, have suspended or lengthened their period of training. No allowance was paid to them. They must be the only public servants in the country who did not get an allowance and that is unforgivable. Very soon, we could find ourselves needing the Defence Forces more than ever. If we get a hard Brexit we will, whether we like it or not, have to impose a border somewhere in this country. We may well have to close the Border because of the difference between the northern Executive and the southern Government with respect to the way in which the pandemic is being looked after. That is of extreme importance.
The dereliction or dilapidation of Army barracks and Army assets throughout the country is a matter of great concern. I am hopeful that the Minister for Finance will be able to bring the various Departments together to provide military housing, establish a third level institution in the Curragh, refurbish barracks and restore the parklands of which we are so proud. Some €137 million is going to search and rescue. I hope to see some initiative to bring the Air Corps back into search and rescue.
Let us not privatise the search and rescue function, as it has been. A ten-year contract is a long time.
The Naval Service has two ships tied up. We have €2.23 billion worth of assets off the shores of this country and are facing drug and people trafficking but those waters cannot be patrolled unless the Naval Service is brought back to full power. I acknowledge the Minister for Defence, Deputy Coveney, is doing a lot and that the Minister will assist him in any way he can but I needed to put those things on the record. I thank the Minister for any assistance he can give.
Finally, the Defence Forces should be the driving force behind cybersecurity in this country.
I thank Senator Craughwell for sharing time. I thank the Minister, not necessarily for yesterday's budget, but for the budgets of the past four years. Were it not for the way in which the economy and the country's finances were managed over that period, we would not really have been in a position to have the budget that was unveiled yesterday to respond to the Covid crisis. It was a necessary budget and an appropriate response. I have often discussed tourism-related issues with the Minister over the years and am very pleased he has reintroduced the 9% VAT rate because when the hospitality industry gets back on its feet, it will be a useful vehicle for sustaining employment and hopefully growing the business again. I also thank the Minister for providing additional support to Shannon Airport through the €5 million that has been announced. There is a long way to go in rebuilding the aviation industry which is critical to the west of Ireland and to the mid-west in particular but this is a welcome start. The Minister will closely observe how aviation is developing in other parts of the world and hopefully the Government will adopt best practice.
I welcome the funding and suite of measures provided for healthcare, which is the area for which I have responsibility in my party in this House. An extra €4 billion in health is completely unprecedented. I sincerely hope we see significant results from that and value for money as well. Particularly in the area of disability, which is obviously close to my own heart, I thank the Minister for what are transformative financial commitments that have not been widely reported. I thank the Minister again for what he has done for our country. This budget will make a difference with helping to retain employment going forward.
I remind colleagues who have not got in that the debate will resume at 2.45 p.m. with the Minister for Public Expenditure and Reform and they are listed for that.
I welcome the Minister for Finance and congratulate him on his recent appointments and European achievements.
I thank the Leas-Chathaoirleach and thank Senators for their contributions. The Minister for Public Expenditure and Reform, Deputy Michael McGrath, will be in the House for the afternoon to respond to other points Senators will raise in that debate.
I am going to respond to a point made by each Senator and thank them all for their contributions. While I will deal with individual points, it is important to frame the budget in terms of where we are collectively. It has become the case that many difficulties our country has faced in recent years have been framed in language that refers to emergencies and crises. That is because, for those who have been experiencing them, they are emergencies and crises. It is because of the care and solidarity we want to show to those in difficulty. Truly, with this awful disease in our midst and the prospect of the familiar difficulty of Brexit returning again, we are at a point without precedent. That is why the budget that was brought in yesterday by me and the Minister, Deputy Michael McGrath - the Minister of State at the Department of Public Expenditure and Reform, Deputy Ossian Smyth, played a very important role in it as well - brought forward the best efforts from three different political parties to try to create a framework within which our country can be safe. We truly are facing a challenge that does not have a comparison and that is why we brought forward a budget of the scale and scope we did yesterday. A number of measures in it in particular would have been unthinkable at the start of this year but are needed today.
Senator Casey talked about the need to try to give hope to many at the moment. Hope, as former US President Barack Obama once wrote in an earlier book, can sometimes be an audacious thing. It is an audacious thing at a time in which we can see many dark clouds ahead, despite it being a nice afternoon at the moment. What we were trying to do yesterday as a Government was to outline our view, which I believe is the view of the Oireachtas overall, that our country will get through this. It is our view that no matter how dark the day and how severe the challenge, it is something our country will overcome through a combination of the qualities of our people and of our economy and we will prevail. The budget sought to put in place a framework to allow us to do it.
In his contribution, Senator Norris touched on the international environment of the national decisions being made. He raised the very important issue of the way in which the financial system is organised across the globe. It is important to note that the attitude of the leading central banks across the world to this crisis has been fundamentally different to the position a decade ago. Within the euro area and within the European Union, the action taken by the President of the European Central Bank, Ms Christine Lagarde, was a fundamentally different approach to what was possible a decade ago. What President Lagarde did early on in this crisis was something for which it took her predecessors many years to build the consensus. It has made a fundamental difference to the national decisions that are now possible.
Senator Kyne touched on a number of different matters. In particular, he asked whether the increase in the VAT rate on the hospitality sector raised the revenue we believed it would. The answer to that question is "Yes". He also raised the issue of the change to the Stability and Growth Pact rules and what that means for the deficits we can fund at the moment. The European Commission has indicated that the rules that were there will be in abeyance for this year and are unlikely to be restored immediately next year, which in turn creates the flexibility for individual nations to respond to the challenge we face. What is crucial for Ireland, however, is that the level of deficit we have run for this year and are likely to run for next year is in the middle of the range when compared with other European countries. That is where we want to be. We want to be in a situation where the growth in our borrowing and our indebtedness does not make Ireland unique and that is not the case for us in Europe or across the world.
I wish Senator Gavan were here. In his contribution he made the point that yesterday, Sinn Féin looked to be balanced. That balance was absent yesterday. Perhaps there has been a change of tone for today because the party has realised that the budget we put forward will, like any budget, not be able to meet the needs of all of our country or the needs of every individual. No budget can do that, even that of yesterday, but what we have looked to do is to do enough for many to help them get through the challenges they and our country are facing at present. I note the Senator did acknowledge some positive aspects of the budget.
Senator Sherlock made a point on where we are with the childcare sector. She registered her disappointment regarding the developments in the budget yesterday. I emphasise, however, that the introduction of the wage subsidy scheme is probably the biggest economic intervention in the country's history apart from, arguably, the decisions taken to support our banking structure at the time of the last crisis.
When the history of this period is written and we look back at all of the different changes that were made across that time, we will find that the Irish State, in effect, stepped in at one point to pay the wages of nearly 600,000 people. In essence, we used the creditworthiness that was regained very slowly to step in and allow the State act as an employer over a number of months. It is factually incorrect to say that a subsidy was cut from €410 to €150 per week. Under the temporary wage subsidy scheme, the maximum subsidy that somebody could get was €410. It is not the same as saying that everybody got €410. To go back to Senator Sherlock's point, in the current scheme we have deemed that the childcare sector can participate in that scheme regardless of what happens to turnover, which is an effort to respond to the issues touched on by the Senator.
In her contribution, Senator Moynihan touched on where we are with regard to housing. I would make the point to her that the 9,000 homes that will be delivered next year, in particular through our local authorities, represent the highest level of contribution that will be happening next year, given the likelihood that the private sector will, at that point, continue to face challenges in the delivery of homes.
Senator Higgins made the point that, in her view, we should be running a larger deficit for next year. Our deficit for this year is €21.5 billion. Our deficit for next year is, at this point in time, €20.5 billion. It is, in truth, probably a more moderate pace of deficit reduction than we could have aimed for earlier in the year, but we have had to make that choice because the virus is in a different place to where we would have hoped earlier in the year. We have to get the trade-offs right between how we manage deficit reduction and how we deal with the challenges we are facing at the moment. At that level for next year, we are well inside the range in comparison with other countries that are in similar circumstances to us.
A challenge to her argument is a point I frequently make, in particular to those on the left who make the case for more borrowing, namely, that those on the left who are making that case are very suspicious and critical of the powers of financial markets. At the same time, they look to deepen our dependence on those same financial markets by getting us to borrow more. That is not a path that I think is appropriate for our country. It is all about having a level of borrowing that is safe and never, in any contribution I have made recently, have I inferred that the difficulties of the last crisis were caused solely by levels of public expenditure that were too high.
I very much agree with a particular point Senator Martin made about the Government. We of course had a difficult start with regard to a number of different measures. This is, however, a stable Government that is responding to levels of challenge that few Governments have ever had to deal with. It has three different political parties that perhaps did not imagine that they would be in government in these circumstances. It has, at its heart, personal relationships that are good and trust that is growing, and we are working very hard to deal with the circumstances that we are now in. Decisions over recent weeks show that.
The time ahead is going to be a challenge. There may well be things that we have to do and decisions that we will have to make that will be challenging for many citizens. The three party leaders-----
We will have a break for the sanitisation of the Chamber. I ask the Minister to finish when he can.
I will wrap up now.
I thank the Minister.
The three party leaders are focused on trying to make the right decisions for our country.
Senator Chambers made the point about the increase in carbon tax and how we are looking to do that. We want to do it gradually with all of the gains from that change in carbon tax being used to deal with the issues to which she referred.
On Senator McGahon's contribution, there was indeed a wide array of measures in the budget yesterday to deal with the green issues he touched on.
I want to again recognise the way Senator Ahearn has raised many different issues with regard to tourism within his community. That is why I believe that the reduction in VAT is the right move at the right time.
In response to Senator Craughwell, we are doing much to support and respond to the needs of the Defence Forces. I am very much aware of the work they have done in recent months in dealing with this terrible disease.
In response to Senator Conway, we have all played a role in trying to get our economy to the point where it is able to fund the kind of measures it is now funding. Maybe, just maybe, the impact of many decisions over many years has a different quality now when we need to borrow more than €20 billion very suddenly. The Senator has, over many years, raised the issue of tourism businesses in County Clare and beyond. He also raised the issue of the importance of supporting Shannon Airport. In the budget yesterday, as the Senator has been good enough to acknowledge, we looked to respond to that unbelievably important part of our economy that offers so much to our society.
In conclusion, in this budget we have tried to create a framework within which our country can navigate through the time ahead. We will do that and will come through this crisis. While I acknowledge those words can appear hollow to many at the moment who are dealing with such difficulty in their lives due to this disease, in the decisions we have made and may yet make, we will do all we can to support our country in the journey ahead.
I welcome the Minister for Public Expenditure and Reform, Deputy Michael McGrath, to the House and thank him for coming before the Seanad to discuss yesterday's historic budget. I invite him to address the Senators.
I thank the Cathaoirleach. This is my first address to the House and I am delighted to have the opportunity to come to the House to say a few words about budget 2021. I will engage with Senators on the different issues they may wish to raise.
In framing the budget, the Government has been faced with a level of uncertainty without precedent in modern times. We continue to live with the Covid-19 pandemic and also face the prospect of the United Kingdom trading with the European Union on World Trade Organization terms from 1 January next. In the face of these extraordinary challenges, budget 2021, which I prepared with the Minister for Finance, Deputy Donohoe, seeks to protect our economy and society by supporting businesses and livelihoods, and investing in key public services as we continue to live with this virus.
Importantly, the budget also seeks to make progress on key programme for Government commitments that will benefit society over the longer term, namely, implementing Sláintecare, building more houses, greening our economy and supporting the labour market. As I said yesterday, we cannot wait until next year to make moves to further protect people and businesses. That is why I have made available an additional €500 million in exceptional expenditure measures between now and the end of the year. These measures include extending the commercial rates waiver in the fourth quarter of the year, which will help the funding position of local authorities and provide vital relief for businesses, and allowing Irish Water to unlock new housing development by providing it with an extra allocation of over €40 million for works between now and the end of the year. We have also provided €80 million to the Department of Education and Skills to accelerate works on its school building programme and to support its ICT and minor works schemes.
Many Senators have raised a number of the issues to which I am about to refer. We are now in a position to provide immediate funding for voluntary disability service providers, voluntary hospices and the wider community and voluntary sector through an additional allocation to the Covid-19 stability fund, which is so important for them. To clarify, there will be €20 million for the voluntary disability service providers, €10 million for voluntary hospices and €10 million of additional money will be invested in the Covid-19 stability fund for community, voluntary organisations and social enterprises. This is in recognition of the real difficulty that many of those organisations have had in fundraising over the past six months and the impact that this has had on their funding position.
Looking to next year, the key expenditure priorities for budget 2021 focus on: the provision of an envelope of €8.5 billion for our public services in order to address the challenges of Covid-19; a recovery fund of almost €3.5 billion to be used for measures to support the economy as we respond to the twin economic challenges of Brexit and Covid-19; incremental improvements in the delivery of public services across all areas of Government; and meaningful improvements in key priority areas like healthcare, housing, climate change and education.
The level of resources for which provision is made in budget 2021 is without parallel. The Revised Estimates for Public Services for 2020 published last December, which seems like a very different time now, set out an overall gross voted expenditure allocation of €70.4 billion. Taking into account the €3.4 billion relating to the recovery fund, public expenditure will increase by €17.4 billion above the expenditure planned for this year before the emergence of Covid-19 to €87.8 billion in 2021. This gives a sense of the scale of the additional expenditure we are making available to support the economy and public services. I acknowledge that we will be borrowing a significant amount of money in the short term in order to pay for these measures. Going into this year, our debt was in the region of €200 billion. By the end of next year, it is likely to be in the order of €240 billion. Notwithstanding that, this is the right package and the right thing to do. When the economy is weak, the State needs to step up, deliver investment and support and pursue counter-cyclical policies. That is exactly what we are doing.
Many people will have concerns about the level of borrowing. At this time, however, borrowing is the prudent thing to do. Interest rates are at record low levels and the funds raised will allow us to protect public health and livelihoods and invest in much-needed infrastructure across the country. I am confident that a renewed economy can generate tax revenue to ensure that our national debt will be on a sustainable footing.
In addition to taking these necessary steps to deal with the challenges posed by Brexit and Covid-19, we also need to make progress in the areas of health, housing and tackling climate change. This is why core health expenditure is to increase by €1.9 billion next year. This expenditure is targeted at building up permanent capacity and resilience in the health service. The funding provided will increase the permanent number of critical care beds to 321 by the end of 2021, add a further 1,146 acute beds and 5 million in additional home care hours on top of the 19 million hours provided in 2020. The provision of mental health services is a key priority for this Government, which is why I have made €38 million available to implement Sharing the Vision, our national mental health strategy.
Critically, the planned increase in capacity in the health service will be supported by funding for an increase in staffing right across the service of up to 16,000 people. I and colleagues in government have studied the lessons from past recessions when capital spending was cut, which exacerbated the economic downturn. We are not going to make that mistake. We are making a significant investment in the future of the country and progress in health and a range of other areas will be supported by a record level of Exchequer capital investment next year. Over €10 billion will be spent on major roads projects and active travel measures, and there will be significant investment in public transport to ensure that our recovery is a green one.
Building projects across the education sector will increase capacity for students and teachers. As well as ensuring a safe learning environment, it is important to note that these initiatives will provide employment opportunities for contractors and staff across all parts of the country. In addition, investment in broadband and in our Defence Forces will be prioritised.
A key priority of the Government is to address homelessness and the numbers of people on social housing lists. This will require that the State return to directly building new social and affordable houses in significant numbers. Such a programme, extending over a number of years, will increase supply and reduce price pressures for struggling individuals and families. The Department of Housing, Local Government and Heritage will receive an additional €500 million in capital funding next year, bringing the total capital allocation to €2.8 billion. This funding will support the delivery of 12,750 additional build, acquisition and leased units in the social housing stock. Of these, 9,500 will be build, with 800 targeted acquisitions and 2,450 leased homes. We have made the very conscious decision that we are going to shift the emphasis on to direct builds by local authorities and approved housing bodies. There will always be a need to work with the private sector and avail of turnkey projects and acquisitions, but we want to tilt the overall balance to be in favour of building public housing on public land.
In recognition of the massive challenges being faced, Government is providing significant supports for our labour market and for businesses. This builds on the measures delivered in the July stimulus, such as the extension of the pandemic unemployment payment, PUP, and the employment wage support scheme to the beginning of April next year.
Next year, we will also provide the investment for upskilling thousands of workers, including through: retrofitting courses; 4,000 new apprentices under the apprenticeship incentivisation scheme; supports through our local enterprise offices and Enterprise Ireland to assist SMEs and companies with the negative impact of Covid-19; and significant investment in tourism, arts, culture and sport to protect those most impacted upon by the Covid-19 restrictions.
We will also protect our economy from Brexit insofar as we can, with €340 million of voted expenditure allocated for next year. This includes an additional allocation to finalise work at our ports and airports and for hiring additional staff. As we seek to protect our economy from the impact of a no-trade-deal Brexit, the recovery fund we have established represents a significant allocation of resources that will enable us to respond in the most appropriate way in the context of the sectors of the economy that have been most affected.
Addressing the challenge of climate change will require a whole-of-government approach. All of our policies and strategies must point in the one direction if we are to make progress in achieving our long-term climate targets. The carbon tax is part of this and, as I said yesterday, every single additional euro raised through the increase in the tax will be returned to citizens by means of a package of supports to protect vulnerable people, secure a just transition and reduce our carbon footprint. Other changes to motor tax and large increases in funding for energy efficiency schemes will also make a difference.
The 2021 allocation for the Department of Education and Skills is almost €9 billion. This will support children with special education needs, the reduction in the pupil-teacher ratio at primary level and investment in school buildings.
At third level, €3.3 billion will provide for a range of initiatives and deliver some respite for students at a really difficult time for them.
We all recognise that tourism is a sector under considerable pressure. Alongside the extensive tax measures announced by the Minister for Finance, Deputy Donohoe, the Government is providing an additional €55 million for a tourism business support scheme and €5 million for tourism product development, which I believe will be of considerable assistance at this time.
Similarly, as we all know, Covid-19 has had a devastating impact on arts, cultural and sporting activities. The allocation of €50 million in live entertainment supports and a €50 million increase in Arts Council funding, to €130 million, along with an increase of €36 million in funding for Sport Ireland, are in recognition of the Government's determination to support and preserve the cultural and sporting life of our nation, despite the unprecedented challenges.
In committing to a total expenditure package of €87.8 billion for next year, the Government is determined to take the necessary actions to protect our people, support our workers in returning to employment and help our businesses to recover. We are in the midst of a national economic fightback. It is my firm belief that we will emerge from this crisis with greater capacity in the health service, more effective training and education supports and a model of housing provision that reflects and addresses the needs of families across the State. It will take time but I am confident that, through a combination of government support, entrepreneurial effort and the skill and dedication of employees, we will restore employment to pre-crisis levels. Ultimately, the unity of purpose we have shown in tackling the health aspects of the Covid-19 virus is exactly the same spirit that will allow us to overcome the economic crisis. I have no doubt that Ireland will rise to the challenge.
I thank the Minister for coming to the House. This is his first visit. It is an important one dealing with the budget.
I welcome the Minister. This is my tenth budget as a Member of the Oireachtas. Like many of us, we have seen everything from the IMF and budget cuts to a regaining of sovereignty, an increase in expenditure and the pressure and uncertainty of Brexit when balancing the books a year ago. This year has shown the rationale for a rainy day fund to those who doubted it. The reason it was needed is clear. It has been utilised. This time last year, the threat of Covid was not known.
The global pandemic and forced shutdown have led to uncertainties over our finances and health services. Businesses have been shut down. We have seen the advent of the pandemic unemployment payment and the temporary wage subsidy scheme, followed by the other schemes put in place by the Government to support businesses and people.
The ability of the State to fund this budget and the increased spending this year are based on borrowing. Ireland's reputation and good name have meant that we have been able to borrow. Had we defaulted and burned the bondholders, as some had wished, where would we have got the money necessary to support the borrowing to fund our response to Covid? In this regard, I am referring to the response in our business community, the response to the need to protect jobs and the response in our healthcare system.
This budget is framed with several objectives. First, it aims to protect lives from the threat of Covid-19. The measures the Minister has put in place for health are certainly welcome. Second, the budget aims to safeguard jobs and businesses. Third, it aims to increase investment in our infrastructure and increase capacity in our public services.
Protecting people from Covid-19 involves healthcare, education, social protection, housing and other measures. The commitments and funding the Minister has provided will certainly aid in all these areas with a view to getting through the Covid pandemic in 2021.
With budget 2021, we have the largest ever health budget, of €22 billion, including funding for direct Covid-19 measures, such as testing, contact tracing, personal protective equipment and extra hospital capacity. The budget also provides for extra hospital beds, extra critical care beds and community beds. It includes €38 million for mental health services, an area that has been sorely tested during the pandemic. The budget also includes €100 million for disability services, including supports for school-leavers and respite care, among other areas. It also includes provision for 5 million home care hours, bringing to 24 million the number of home help hours available. This measure, along with the fund that includes funding for home adaptation grants, will help older people to live independently and securely in their homes for longer.
With such demands on healthcare, I am heartened by the targeted increases secured by the Minister responsible for social protection, Deputy Humphreys, including increases to the living alone allowance, fuel allowance, carer’s support grant and island allowance, and by the payment of the Christmas bonus, affecting all those on longer term support payments. This will directly help and support vulnerable people in our communities. The Tánaiste, Deputy Leo Varadkar, secured a package of supports for businesses and workers. It is crucial at this time. Confirmation that the employment wage subsidy scheme will continue through 2021, along with a new Covid restrictions support scheme, will be the difference between survival and bankruptcy for many businesses.
Many Members will recall the last recession and the scourge of unemployment. The devastation of unemployment for individuals, families and communities cannot be overstated. Many people have faced unemployment this year who never believed they would. This time last year, they did not believe they would be in circumstances in which they would be out of work. The State always has to step in to be the safety net for those who lose their jobs. We must be mindful of the damage that unemployment causes. This is why the measures in the budget, including enhanced support payments, reskilling and upskilling opportunities and changes to the student grant scheme, are so crucial.
The capital plan is important, as the Minister knows. A range of projects, including urban renewal and development projects under the Department of Housing, Local Government and Heritage are important. They are important in terms of measures in the Galway transport strategy, for example. They pertain to new bridges over the old viaducts on the Corrib and the Galway city ring road, which got Cabinet approval in October 2018. With regard to the latter, the An Bord Pleanála oral hearing has resumed. While there is a variety of views on the project in this Chamber, it is important to the economy of County Galway and Galway city, the regional capital of the west. I hope that, subject to planning permission, the commitment will be seen through. The Moycullen bypass has gone to tender. It is a local project from my perspective, and it will improve journey times and the safety and attractiveness of Moycullen as a place to live.
There are many other positive aspects to the budget in terms of expenditure. There are far too many to mention in the time allowed. I have no doubt that borrowing, the running of a deficit and spending reserves such as the rainy day fund are the right steps to take at this moment. These steps will lead us to a better place where Covid-19 can be eradicated, jobs are plentiful, budgets can be balanced and surpluses can be achieved but, until such time as this happens, this budget is the right budget at the right time. I commend the Minister on his work on all aspects of it.
The Minister is very welcome to the Chamber. I wish him good luck in his portfolio.
I welcome the budget. It reminds me of Fianna Fáil budgets of the past. It is a budget that Fianna Fáil can be proud of and it certainly shows the boys are back in town.
I hope they are not. Bring back Bertie, is it?
I am sorry but credit for this budget must go to the people of Ireland because this is their budget. They have sacrificed so much in carrying the burden they have carried for the past 12 years, or since the crisis in 2008. This budget is one they have made themselves. Without them, we could not have borrowed money to invest in our future. Great credit must be given to the working men and women and the businessmen and businesswomen of our country.
There are a couple of measures I really welcome, the first being the Covid restrictions support scheme. It is an excellent scheme and I look forward to seeing the terms and conditions and to the opening of applications next week.
I welcome the shared island fund and the €500 million the Government has put in there to strengthen our Border communities. There are about 1,500 cases of Covid-19 in the North today so now more than ever we need to be investing in our people as an island.
I welcome the €19.2 million for our local government fund. It is important that we strengthen our local government and anything we can do in that area that puts the citizen first, is important. I am looking forward to finding out the details.
There were a number of misses and I will mention two of those which are important to me. I would have really liked to have seen something like a medical card for the terminally ill in this budget and we talked about it before with the Minister for Health. This is a time when euthanasia is being discussed in this country and yet we are cribbing about giving those who are dying a medical card. We can do better. This was also an opportunity to bring back the bereavement grant, which we got rid of in December 2013. Many families who have been affected by Covid-19 may not only have one funeral but they may end up having two funerals within their family and the cost of funerals is significant.
There is one issue I want to highlight most specifically, namely, mental health. The winter plan does not seem to give that matter due attention. The budget rightly acknowledges the significant stress, anxiety, worry and fear that Covid-19 has brought to the people of this country. There has been much talk by healthcare professionals in this area of a tsunami of mental health issues, which is expected to hit in the coming months. The Psychological Society of Ireland has predicted a threefold increase in general mental health difficulties as a direct result of Covid-19, as well as stating that the impact of this will be felt for a long period of time. Considering this, while the funding outlined in the budget is welcomed, as is the case with any funding aimed at mitigating the effects of our mental health crisis, I must point out that it still falls short of what we should be doing. The mental health funding outlined in the budget amounts to 1.25% of the moneys made available to the health service as a whole. The World Health Organization recommends that each state dedicates 12% of its health spending to mental healthcare. While €50 million is no small sum, it is dwarfed by the figures which surround it in this budget. Most notably perhaps, I mention the €1.3 billion fund ring-fenced for Covid-19 measures, when the mental health fallout may prove to be the longest lasting effect of this virus.
The additional pressures associated with the Covid-19 pandemic have uncloaked the underlying tension and fragility that many Irish people live with, including: strained social bonds; overstretched families; inadequate childcare provision; drug and alcohol misuse; and financial uncertainty. I do not know how many young people I have known who have lost their lives to suicide during this pandemic. Anything we can do to support our young people and those who are affected as a result of the fallout of Covid-19 needs to be done and we need to do better. I have serious doubts as to whether the funding allocated in this budget will be enough to allow the relevant services to attain the goals set out by the Government in this year’s Sharing the Vision mental health policy. Let us not pursue a frugal course of action in this regard that will result in our saying in years to come that we should have done more. I echo the call of Fiona Coyle of Mental Health Reform to not "leave those who need mental health support out in the cold".
I want to begin by thanking the Minister, Deputy Michael McGrath, for his efforts since the formation of the Government. We are facing one of the greatest challenges in the history of the State and along with the Minister for Finance, Deputy Donohoe, the Minister delivered a budget yesterday that invests in the resilience of the Irish people, Irish businesses and the entire society to come through this challenge and emerge stronger, as we have done with so many challenges in the past.
The labour market supports implemented yesterday are the most extensive in the history of the State, as they needed to be, given current circumstances. The extension of the PUP and the employment wage subsidy scheme were necessary as a crucial support. The allocation of €200 million for training, skills development, work placement schemes, recruitment subsidies and job search measures is especially welcome.
The elderly have been most impacted by Covid-19 in health and in their lifestyles. Covid-19 has also had a huge impact on young people and youth unemployment is a serious concern. The budget outlines how young people will be supported, with 10,000 upskilling opportunities and 4,000 new apprenticeships being provided for under the apprenticeship scheme.
I come from the hospitality sector, as the Minister is aware, and I know the budget was especially well received in that industry. The hospitality sector provides 180,000 jobs across the country, the vast majority of which are outside Dublin and they are vital for town and regional economies across the country. As we know, all of the hospitality sector has been particularly hard hit by Covid-19. The measures outlined yesterday provide a lifeline for businesses in the sector and represent a path forward. This sector has seen off challenges in the past and I have no doubt it will overcome this challenge, following the supports outlined yesterday.
I also want to welcome the increased funding in education. "Trust the youth and they will deliver" goes the old Irish saying. This budget has placed confidence in our young people, recognising that enhancing investment in this area will always benefit the country in the long term. As we all know, education was a huge issue in the last general election. Our class sizes were too big and the pupil-teacher ratio must be lowered in line with EU averages. The additional more than 500 teachers being hired for next year's school year is an important first step and I have no doubt it will be a priority over the term of this Government. As Fianna Fáil will ensure, our commitments in this area to reduce class sizes can be honoured. The recruitment of almost 1,000 additional special needs assistants is a measure which will have a positive impact. Knowing people who work in this area, it is crucial that we enhance supports and yesterday was a massive step in the right direction. The increased funding for higher education is also an investment that will pay dividends in our future. The standard of education in the country has always been a crucial element of why Ireland attracts so much foreign direct investment. Fianna Fáil in government has always sought to raise the standard of education in this country, the best known example being former Minister, Donogh O'Malley, and former Taoiseach, Seán Lemass, making the decision to make second level education free. I am delighted this Government will continue that trend.
I welcome the additional funding for 620 new Garda recruits and of an additional 500 administrative staff in budget 2021. We need more gardaí in Galway and the Garda plays a vital role in our communities. There is huge demand for additional gardaí, as I alluded to, in Galway city and Galway county, where the resources are stretched. I look forward to Garda numbers increasing in Galway when I raise that matter with the Minister for Justice and Equality.
I note the commitment of €500 million for the shared island unit, which is positive. This is an area where outreach across communities is required and where we need thoughtful consideration and study of what type of country a 32-county Ireland will be and of how that can be advanced in a peaceful and united method that will seek to convince all on the island that a united Ireland is best for their futures.
I am conscious of the time constraints so I will not discuss social protection measures except to simply say that they are all very welcome, in particular the increase in the carer's support grant. There are no words strong enough to adequately commend the role played by the thousands of carers in this country. We must enhance supports for them in the coming years.
Yesterday, the Minister stated that our medium-term approach to public expenditure must be sustainable and that he would develop a framework to ensure that. I ask him to tell us more about the timeline and process involved in that.
I welcome the Minister to the House and congratulate him on his appointment. I look forward to working with him in the term ahead.
I will begin on a positive note by referring to work on which I and many others have been involved for a number of years. I welcome the Government's commitment to provide €500 million in the years to 2025 for opportunities for North-South co-operation. This is a welcome first step in the right direction and lives up to the commitments that were made by the Irish and British Governments last January in the New Decade, New Approach agreement. I am particularly pleased to see that the beneficiaries of the fund includes the north west, Border communities, the Ulster University Magee Campus and will strengthen North-South health links. The Government knows too well the deep seated damage that has been caused to the people who live along each side of the Border, especially economically. This investment will sit alongside that made by the North's Executive and, indeed, the British Government earlier this year. It is that joined-up approach in dealing with the decades or century of neglect that we, in Sinn Féin, have advocated and pursued for many years. It is essential if we are to overcome the economic disparity that exists between the people in the Border region and the rest of the island. I assure the Minister that I will hold his feet and the feet of his ministerial colleagues very close to the fire regarding the investment to ensure it goes where it is most needed.
Generally speaking, however, notwithstanding all the hype and spin we have heard over the past 24 hours, this budget will not bring much comfort to those most in need. Like every other budget by Fine Gael and Fianna Fáil before them, it delivers very little in terms of substance. The only difference this year is that it is a coming together of both parties to deliver a package of promises. I fear these will turn out to be empty promises.
For struggling families to pay rent or for people who have vulture funds breeding down their necks, there is no protection to keep a roof over their heads. There was nothing for the childcare sector or families struggling to pay for their childcare.
For our hospitals and healthcare workers, the numbers of beds promised are not ambitious enough. As far back as 2009, we had 289 critical beds. At the time, it was determined that we needed 579 critical beds by 2020, yet 11 years later we still only have 280 such beds. Sinn Féin, in its alternative budget, would have provided for 100 additional critical care beds and 1,100 additional care beds to enhance the surge in capacity that will come and protect the non-Covid surgeries and procedures that we will see in the future. The concern is that without extra capacity, hospital care beds for Covid patients will again result in non-Covid care being delayed, thus denying care to cancer patients, chronic cardiac patients, surgery patients and leading to the closure of acute services for new patients. Sinn Féin would have expanded capacity, increased staff numbers and provided extra funding ring-fenced for mental health and cancer care. It is obvious that the promised beds cannot be delivered without increasing staff levels. To do so would require the political will to address pay inequality and engage in a meaningful recruitment drive. The Government failed to do that in this budget and continues to ignore this major problem.
The student supports set out in the budget are welcome but once again they are a one-off measure. The budget provided no vision for the future of higher and further education. It did not address the funding crisis in universities or the financial barriers to accessing third level education which, despite Student Universal Support Ireland, SUSI, continue to exist. Sinn Féin proposed an additional €60 million in core funding to address the funding crisis in third level institutions on top of what the Government set aside in its additional funding. The Government provided €20 million for SUSI grants as a result of Covid. It is important to note that this does not necessarily represent an expansion of the scheme. It means that more people will have lost their income and will, therefore, become eligible for a SUSI grant. I ask the Minister to clarify that matter.
Sinn Féin proposed an expansion of Student Universal Support Ireland to cover more people by increasing thresholds and supporting more students. We would also have cut registration fees by €500 and we set out a strategy to abolish fees and remove financial barriers to accessing third level education once and for all.
Funding for apprenticeships is inadequate and the figures simply do not add up. The Department of Education estimates that the cost of an apprenticeship is between €7,000 and €9,000. The €8 million in the budget for 4,000 apprenticeships only covers 2,000 apprenticeships based on those figures. The funding does not cover traditional craft apprenticeships, for which close to €10,000 per apprenticeship is required. I am sure that the Minister will agree that high-quality apprenticeships should be a priority.
More was needed to give hope to families who are struggling, to give renters more hope and to give hope to cancer patients and those who suffer from mental health issues. Those with disabilities had to fight for their supports. Everything has to be a fight with this Government, which is quite simply exhausting. People should not have to fight at the most difficult time of their lives. Unfortunately, I see this budget, once again, as a missed opportunity. People deserve better.
I welcome the Minister to the House and look forward to working with him over the period ahead.
Listening to the live broadcast of the Minister for Finance and the Minister for Public Expenditure and Reform announcing a budget of almost €18 billion, of which more than €17 billion would be on expenditure, like many others, I looked forward to a new social contract with the Irish people, one of which we could all be proud. Granted, there are many fine aspirations in the budget but as the dust settles on yesterday, we see that there are also lost opportunities.
The budget was an opportunity to create an Irish national health service that operated on medical need rather than an ability to pay. The alternative budget proposed by the Labour Party recommended additional funding of €35 million to tackle the backlog in cancer services, cancer screening and cardiac care. We welcome the resources the Government has said it will put into these services this year but there is no plan or, more important, no details on how to get cancer care back on track. Those with loved ones who are suffering who listened in yesterday wanted to know when their family members would be seen or, if needed, begin their treatment.
As I stated on previous occasions, John Wall is leading a campaign to implement medical card reform for terminally ill patients. It is incredible that there was no mention of this comfort blanket in the budget. The Labour Party has estimated that the change would cost €20 million. I appeal to the Minister to find that money in the additional moneys announced yesterday as it would give comfort to all of those who need it at this very difficult time in their lives.
We all know that early intervention is critical for the prevention of medical issues in our children further down the road. Free GP care is a critical component of early intervention and the prevention of Covid-19 and non-Covid illness. The first steps were taken; we need to see the next step.
In the months since this pandemic started, we have correctly praised and applauded the carers of this country. Yesterday, the Government had the opportunity to reward those who spend, on average, 19 hours each day taking care of loved ones. Increasing the carer's allowance and changing the means test for carers, which has not changed since 2008, would have meant 30,000 carers would receive a payment for their work, which saves this State billions of euro. Unfortunately, the opportunity was not taken. Granted, as has been said, the carer's support grant was increased by €2.88 per week. While an increase is always welcome, the budget was an opportunity to change the system and ensure that those who save us so much were finally recognised for what they do for us all.
It was surely time in the budget, given that the Government had €17 billion to spend, to raise all social welfare recipients' core payments, knowing that the vast majority of this money would go back into the local economy but also acknowledging the terrific sacrifice that our pensioners in particular, who were asked to cocoon, have lived through in recent months.
As I travelled through south County Kildare prior to the previous election, one of the main quality of life issues raised with me related to childcare. In towns such as Newbridge and Kildare town, the issue arose on many doors. Once again, there was a lost opportunity yesterday to implement a national childcare scheme. I am sure the Government, like me, receives correspondence from young commuting families in south County Kildare, as well as from families throughout the State, outlining the problems that childcare causes them daily, such as having to rise at times at 6 a.m. and take young children from their sleep to drive to centres miles from where they live. As my colleague Senator Bacik noted yesterday, the Minister, Deputy O'Gorman, needs to clarify whether he has an intention to move towards a system of universal public childcare. Covid crisis or not, childcare fees in Ireland are among the highest in the EU and the OECD, while wages for early years professionals and levels of State investment in childcare remain among the lowest in Europe. Childcare is a quality of life issue for many, and if we are spending €17 billion, we need to urgently address it.
I welcome, as my party has done, the supports for business and in particular for the tourism sector. There is no doubt this sector needed help. An email I received from my local hotel last Sunday morning stating that it had to lay off 50 people is a case in point of why we have to protect 260,000 jobs. However beautiful our country is, it is the workers in this industry who are our assets. They are on the front line of the céad míle fáilte and it is they who will deal with visitors when that time once again arises in what, I hope, will be the near future. We needed to give stability to those workers, not add to the worry of getting to Christmas and then what might happen at the end of January. As my colleague, Deputy Nash, stated yesterday, if €350 was the floor of decency in March, it should be the floor of decency now, and the pandemic unemployment payment should have been restored.
I have spoken previously in the Chamber about youth unemployment, a subject mentioned by a number of Senators during this debate. I listened to the Taoiseach acknowledge last night on "RTÉ News: Nine O'Clock" that the figure for youth unemployment was more than 34%. It may, in fact, be closer to 40%, a totally unacceptable figure. I listened to the Taoiseach state that thousands of jobs will be created in healthcare, education, defence and even the Naval Service. I look forward to this becoming a reality. If we are to be serious about how we spend this money, investing in our youth and their futures must take up the maximum effort.
Yesterday saw the largest budget in our history. It contains many fine aspirations that I welcome, but it failed to address many quality of life issues. Of course we will support many of the measures announced but the proof of making a difference will be their delivery. It will be how these measures affect working families, those who no longer work or cannot work, and our wonderful communities. I look forward to seeing many of these measures rolled out quickly but also to holding the Government to account on the aspirations contained within.
I welcome the Minister and thank him for joining us today. We are in the grip of a global pandemic and are facing into Brexit. We have never been in more uncertain times. We need to ensure that the country is prepared and people are supported and, as we recover, that it will be a green recovery, putting our economy on a sustainable footing for future generations. While we support families through this difficult time and protect the most vulnerable, we also need to think about the kind of country we want to live in when we are through all of this. We need to ensure we seize the moment to prepare for a green recovery. This country has been most successful when we work hard to get ahead of international trends, invest in our young people and take on challenges. We can do that again.
It is difficult to sit here and listen to Sinn Féin pick holes in a budget, given that its alternative proposal would have increased current expenditure by €3.8 billion, much of it recurring annually. No importance was attached to the climate and biodiversity. In fact, the only mention of the climate and environment are in the title of a Department. There is no mention of a biodiversity crisis and no funding for retrofitting. There is only €25 million for walking and cycling, versus the €360 million committed to in our budget. The Green Party has sought a number of measures to deliver change to a carbon-neutral society because climate change is the existential threat facing us. It is also an economic threat as we move forward.
I was phoned earlier by local business owners in Galway who see opportunities for their businesses in the future in the funding announced. For retrofitting homes, there is close to €300 million to build warm, healthy and energy-efficient houses. The budget will deliver 9,500 social housing units and 400 cost-rental units, which are key to the Green Party's housing policy. There are 1,500 places on retrofitting courses, part of a package of 10,000 upskilling and reskilling opportunities. We also needed to change the way our businesses and farms operate in order that they can reduce their emissions and continue to operate. Helping people to work near where they live will be crucial to the green recovery. We are supporting the development of Wi-Fi hubs in our towns and villages. There is a new environmental scheme for farmers worth €20 million and an extension of tax relief for energy-efficient equipment for farmers.
Carbon tax is an essential part of preparing our economy for a carbon-neutral future. To achieve this, the Government commissioned the Economic and Social Research Institute, ESRI, to outline the best way to use the money raised to reduce poverty. The Green Party insisted on the Government implementing the measures outlined in the ESRI report, which will improve the conditions of the lowest earning 30% of households. The ESRI described these measures as "unambiguously progressive" and the Government has gone even further with these social protection measures than the ESRI had suggested was needed. The measures include an increase in the qualified child allowance of €5 per child aged 12 and over and €2 for children under 12, an increase in the fuel allowance of €3.50 a week and an increase in the living alone allowance of €5 a week.
There has been much talk of disability services during the debate, which are targeted to help our most vulnerable. An increase of €100 is the largest ever, while there is the largest ever funding package for our health service. There is €9 billion for education, as has been mentioned, and class sizes will be reduced. The Irish National Teachers Organisation has welcomed all these measures. It is quite cynical for parties to suggest that more could have been achieved when their own submissions did not outline how that could be done.
I again thank the Minister for his attendance and look forward to working to implement all the measures in the budget.
I am sharing time.
The Minister is most welcome to the Chamber. This is my first opportunity to congratulate him publicly on attaining high office and I wish him well. He has certainly started in the manner in which he means to go on. I have always considered him very positive, pragmatic and practical, and that is stamped throughout the budget. It is the first time in a decade that Fianna Fáil has had an opportunity to put its stamp on a budget and that is very important. I very much welcome the historic investment in our society, and in the infrastructures that constitute it, that has been provided for in the budget. These are measures for our time that, as was described in The Irish Times, are an emergency response in an unprecedented package. With this budget, the coalition Government is doing its utmost to protect lives and livelihoods at a time of extraordinary uncertainty.
Covid and Brexit are the two giant unknowns facing our economy and this budget is probably the most important in the history of the State. The key social housing, health, green and education agendas all have much to be pleased about in this budget. Moreover, supporting our business community and keeping and creating jobs where possible is of key importance. We certainly hope the spending people make because of this budget will help to limit the damage caused to the economy by business closures, unfortunately, and the numbers of people slipping into long-term unemployment. We have to protect the most vulnerable in our society with concrete measures and this budget goes a long way. To have over €1 billion invested in mental health supports is unprecedented and the significant increase in funding for the disability sector is to be recommended. The extra funding, which amounts to more than doubling the funding for direct provision, to help support the end of direct provision is very important.
I am a believer in local democracy and empowering our local authorities and councils is hugely important. In terms of the extra money available for infrastructure, I hope to see some of that in south Kildare in the form of a new bridge in Newbridge and the completion of the relief road in Athy. I am glad the Minister recognises the childcare sector is in need of significant reform and three reviews on funding, operating and workforce development are ongoing, which will provide the basis for a new vision for childcare next year. I have always been to the forefront of defence issues and I welcome the extra €32 million investment, of which €10.5 million will go towards paying allowances, while the rest is for infrastructure.
The reduction in class size ratios to 25:1 is significant and positive and will lead to extra teaching jobs, as well as reducing the ratio in the classes. I welcome the €120 million package for reskilling and retraining and the extra money in special education. The significant increase in funding of €13 million for dementia services is a breakthrough in that area. I thank the Minister for his support and his consultation with the full parliamentary party on the issues we felt needed investment.
I extend céad míle fáilte to the Minister. He has been in the Oireachtas since 2007 and since I came into the Oireachtas in 2016 until now, the Minister always gave time to people in our party to discuss the issues we wanted to discuss with him. In this budget, we see many of those policies, though not all of them as it is not possible to put everything in at the same time. We see them clearly in the budget despite the difficulties we are in.
I wish to rebut the arguments that have gone on over the past 24 hours or so that this budget is anti-rural. Nothing could be further from the truth. I have strong opinions about this because such false and misleading statements being made to media should be rebutted. I will provide some instances to illustrate the budget is not anti-rural. A sum of €10 million is being provided for IDA Ireland to develop advanced factories and industrial estates for companies seeking to invest in Ireland, especially outside Dublin. A sum of €30 million has been ring-fenced for a call for regional enterprise centres for initiatives to create jobs in every region in the country, while €3 million has been allocated for networks in digital hubs. There will be €100 million to help businesses adapt to Brexit. As Brexit is catastrophic for rural Ireland, this is very important.
There are many other measures and I do not have time to go through them all because time is limited. A sum of €11 million has been made available for local enterprise offices and many measures the farming community requested, such as the food ombudsman; a new rural environment protection scheme, REPS, and the rollover of the targeted agricultural modernisation schemes, TAMS; have been included in this budget.
The Chair wants me to finish and I will have a better chance to expand on this again but I want to send a clear message that this is the proper budget. I compliment the Ministers, Deputies Michael McGrath, Donohoe and Eamon Ryan, on coming together in a calm way and putting in place what is necessary for the crisis we are in. Let us row in behind it. There were not and could not be missed opportunities here. We are in uncertain and different times and, hopefully, this budget will work out and this time next year, we will have a far better outlook on the economy.
I congratulate the Minister on yesterday's budget. The purpose of it was clear to me, namely, to save lives and livelihoods and I think it will be successful in that regard. I have a couple of specific points that were not the Minister's primary focus yesterday but I will take the opportunity to keep them on the agenda.
There is an issue affecting the north west and the Border area and people's ability to work remotely, which is obviously important and relevant at the moment. Residents in the Republic who work in the North are faced with double taxation liability by Revenue when they work at home or remotely south of the Border. If they want to log on to do any work, even just check their emails, they have to travel into the North to do so. This has a major effect on their work flexibility. This has been addressed for the pandemic because in both jurisdictions the advice is to work from home but for normal or new normal times, this should be addressed.
Some 86% of companies now say they are in favour of giving their employees flexibility like working from home. From a work-life balance perspective, I hope we see more long-term choice in how and where they work. It is important that the north west is not left behind and that the region offers the same opportunities as everywhere else for both employees who want a better work-life balance and employers who want to attract the best talent. We need to take account of the thankfully fluid nature of the Border and our commitment to an all-island economy under the Good Friday Agreement. Northern Ireland has a 60-day allowance for their workers who have jobs in the South but, hopefully, we can go further than this. Even better, could we agree a new reciprocal agreement of 180 days, perhaps through the work of the North-South Ministerial Council?
I noted yesterday the reference to the e-working tax relief and that the Minister did not want to pre-empt the work of the interdepartmental group looking at developing a remote work strategy. I thank the Minister for that update and for the inclusion of broadband. However, it would be a lost opportunity if I did not point out that I think the e-working tax relief should be fundamentally changed as part of that review. It is cumbersome, it does not offer enough value for money and it is only the bill payer who can avail of it. If one is renting a room in a house, for instance, one is not entitled to anything. In the UK, they have a flat rate tax relief of £4 during normal times and £6 during the pandemic but that is targeted at people who have no choice but to work from home, whereas we, hopefully, will embrace remote work as a lifestyle choice. Other countries offer a vouched approach based on the percentage of home-working space compared with the rest of their house. There are different examples to look at. We could offer an unvouched and a vouched option, particularly for people who invest in a home office. Trends are changing in that regard.
According to Dublin Bus and Irish Rail, employers can achieve PRSI savings of up to 10.75% and employees can save between 31% and 52% of travel costs as a result of tax, PRSI and USC savings by participating in tax saver commuter schemes. In 2019, the tax saver tickets were worth €88.6 million gross and they were issued on Leap cards. Can we offer reciprocal tax benefits to remote workers? Grow Remote, based on its own experience, tells us that work preferences level out to a third, a third and a third.
A third of people have absolutely no interest in working remotely. They want to work in the office and they want to commute to work. Another third want to work from home or remotely and the final third want a mix of both. We are seeing in the media at the moment how different people react to different circumstances. It is a fantastic opportunity for us in terms of work-life balance, regional balance, environmental benefits and to breathe new life into local communities, which are not as active economically as our European counterparts and where we also have a higher level of vacant properties. The opportunity was recognised yesterday with €5 million being provided by the Department of Rural and Community Development to develop digital hubs for employment opportunities, €3 million for the Department of Business, Enterprise and Innovation and €30 million ring-fenced for regional enterprise centres to call for initiatives to create jobs in every region of the country. This is brilliant news, and it follows on from the programme for Government and the consultation on remote work, but what we need now is a joined-up strategy from company to community if we really want transformative change.
I recognise the supports for businesses affected by Covid and Brexit. In the limited time since yesterday I have had very positive feedback from the businesses in Dublin West on the Covid restrictions support scheme, the decrease in VAT, the extension of the commercial rates waiver and €100 million to help businesses adapt to Brexit and, very importantly, the €500 million for the shared island unit and cross-Border opportunities. In addition, there was a commitment by the Department of Finance to change how we measure success, not just by economic measures but by well-being measures. That is really important to recognise. It was a good budget for challenging times, one that I hope we can all get behind.
I am conscious of time. We have six more speakers indicating but I have to call the Minister at 4.07 p.m. to reply. I ask Members to be conscious of the time and if they could shorten their contributions or share time that would help.
The Minister is welcome to the House. It is my first opportunity to welcome him here since he was elected. I thank him for his availability when we were looking for him. That is appreciated.
By and large, the budget has been a good one for the situation we find ourselves in. He is to be congratulated, with his colleague, for putting the budget together. Many people have been watching VAT and housing, and all of these things are important to the business world.
The Minister has plenty of colleagues over there to congratulate him so I will find one or two points to hit him with. First and foremost, I will start with his own backyard and the Naval Service. Currently, two ships are tied up. Our ships are there to protect €2.23 billion worth of assets. Since I mentioned that to the Minister for Finance, Deputy Donohoe, earlier today, I am told that there are $10 trillion worth of trade going through the information superhighway that travels under the sea and we do not have sufficient deep-sea divers to keep an eye on that and maintain its security. The refurbishment and reinvigoration of the Naval Service is something the Minister will have to tackle very quickly. I know the Minister for Foreign Affairs, Deputy Coveney, is already working with the Minister on that issue. It is an absolute outrage to have ships worth more than €10 million tied up.
The air search and rescue service is about to go to tender. In the next year €107 million has been allocated to that and some other areas. I think €60 million of it is for search and rescue. We have an Air Corps. Why are we using private companies? Could the Minister provide some assurance that the Air Corps will be invited to tender and make sure that it will have the resources it needs to tender for search and rescue? It is a ten-year contract. One cannot imagine what it will do to the morale of the Air Corps to find itself back again, front and centre, where it is needed.
My colleague in the Lower House, Deputy Berry, mentioned the elevation of the Military College to a proper third level establishment given its links with Maynooth university and Carlow-Waterford technological university, which is not yet established but will be fairly soon. Some 129 houses owned by the Department of Defence, the Department of Agriculture, Food and the Marine, and the Minister's Department owns a couple of them, are boarded up, apart from the ones where there are overstayers, and being allowed to fall into an outrageous level of disrepair when we have homeless people in the country. I would like to see a commitment from the Minister to pull together the other Departments to put some of the 12,000 houses we are going to build into military barracks for military families. The refurbishment of barracks is a very important issue. We have Brexit coming down the line and we may finish up needing a border. We also have a pandemic where the conditions in the North of Ireland are now getting drastically out of hand. We may need to close the Border for health purposes, so the Defence Forces will be crucial.
I will finish on this point about looking after public servants. I refer to people in this House, the Lower House and those who lost their seats in the last election, who are on class K PRSI. There is no benefit whatsoever. That is outrageous, having served their country for four years. We are all waiting for the implementation of the Moorhead report. I hope we will see it in the Finance Bill.
The Minister is very welcome to the House. I congratulate him and pay tribute to him on his budget yesterday. I will start by referring to the contribution of a colleague of mine in the Lower House, Deputy Lahart, who in his contribution to the Dáil a few weeks ago pleaded with the Government to provide a sense of hope to the people of the country in the months ahead as we face into the winter. His words rang in my ears yesterday as I listened to the speech of the Minister because the budget gave us all hope. That really came home to me when a small business person in my home town of Navan texted me late last night and said, "The support for a closed business like mine is very welcome...it's definitely released some of the stress and there's light at the end of the tunnel." They are real words from a real man employing a small staff, but contributing in a real way to the economic life of my town and his reference to seeing light at the end of the tunnel rang true.
I contrasted that small business owner and his feelings of having the stress lifted off his shoulders to the way that Oliver Callan, filling in for Ryan Tubridy on the radio this morning, characterised the budget by shrugging it off and saying it means nothing, all those billions of euro they are talking about. I thought he must not have spoken to any of the real business people on the ground back in his home county of Monaghan who are going to survive this winter because of the budget. Yesterday was real - in fact it does not get any more real - and all those billions of euro and record amounts mean that real people are helped in real ways.
Senator Casey referred to the money for healthcare, housing and other areas. It was regrettable to hear the way some of the Labour Party Senators earlier today derided the investment in housing. One would wonder if they are living in the real world and how this mammoth task is going to be handled at all. It is fairly pathetic to see them drifting into the same world as the Shinners but I know that the measures announced yesterday are going to make a real difference.
I have just come from a meeting of the Joint Committee on Media, Tourism, Arts, Culture, Sport and the Gaeltacht. There was a €50 million increase in arts spending up to €130 million and a €50 million increase in the spend in the live entertainment sector. A €36 million increase to Sport Ireland was announced by the Minister of State, Deputy Chambers. They are real improvements in society and I pay tribute to the Minister, Deputy Michael McGrath.
We all know the name of the biggest party in the country is Sinn Féin.
I thank the Minister, Deputy Michael McGrath, for coming in here. I echo the comments of Senator Cassells on the budget, in particular in terms of how it sets out the direction that this Government wants to travel. It was a very clear budget about investing in public services. It was also a very clear budget when it came to supporting small business and for the State to play its role in doing that, but also in tackling the big challenges. Those big challenges include housing and health, dealing with Covid and facing up to the challenges of Brexit. It was interesting that yesterday Sinn Féin did not make any reference to Brexit in its contributions on the budget speech. It is clear that this Government, in particular in terms of the investment through the shared island unit, is about action rather than loud slogans and words.
I wish to speak about some specific measures. My colleague mentioned the investment in arts, sports and community organisations, which will play a really important role in rebuilding communities, and that has to be welcomed. However, I wish to refer to two areas, one is education. There is a very clear investment in the future and in setting out our direction. I refer to the talk about reducing the pupil-teacher ratio and the investment in special needs, but I welcome in particular the improvement in the postgraduate grants.
This was something that was cut by the Labour Party. However, in government, we believe that we need to invest in research. This is essential.
Another important issue is the priority we have placed on disability services. We are spending €100 million extra a year on such services. In addition, there is €20 million in funding for voluntary disability services providers. I wish to pay tribute to the Minister of State at the Department of Health, Deputy Rabbitte, because she has worked damned hard to ensure that money is available, that there is support for school leavers and that respite services are available. When she visited Wexford, she spoke to the people at St. Aidan's Day Care Centre in Gorey and met other service providers. I am happy with the direction this Government has set out and that it will look after those with a disability - the most vulnerable in our society.
Next is Senator Aisling Dolan. Is the Senator agreeable to sharing some time with Senator Cummins?
I will try to divide it.
We have seven minutes left and four people offering.
I will speak carefully and quickly. I welcome the Minister. This is an incredible budget for one of the most challenging times Ireland has faced. We are dealing with the loss of life and with the loss of our loved ones every day. We are fighting a battle against Covid-19 that will take all of our stamina, determination and resolve. As a country, our first priority is to protect and save lives. We are in the eye of the storm again. There are 32 people in intensive care, 22 of whom were admitted in the past 24 hours. That was the data from yesterday alone, when there were over 800 new cases.
This budget will save lives. It will provide for people in need. It will also protect the most vulnerable. There is a commitment to increase bed capacity by means of the allocation of an additional €4 billion. Our hospitals have been crying out for extra funding for decades. Portiuncula University Hospital is part of the Saolta University Health Care Group in the west. It has only 13 beds. However, the hospital, the general manager and the healthcare team took the initiative. They moved patients out to a prefab building in the car park. They are now looking to develop rooms into single rooms. These will be available so that the hospital can have capacity during the winter months. Will the Minister provide detail regarding timelines for Department decisions on capital investment in locations such as Portiuncula University Hospital?
There is also a commitment to recruit 16,000 healthcare professionals across the primary care sector and in our hospitals, in addition to 67,000 directly employed by the HSE. That is a phenomenal increase. It is almost a quarter above the number in place already. However, there are challenges in attracting people, especially young people, to healthcare settings and hospitals in regional towns. How do we ensure that those vacancies will be filled in the regional towns? I call on the Minister to consider specific incentives for regional locations within the HSE to attract and retain talent. Is this something that we could look at?
I note the plan for 5 million additional hours for home help. That is most welcome especially in an area with older people and an independent population. There is €100 million for disability services.
I wish to quickly talk about those in need. We will come through this together as a country. When we do, we will need jobs. We will need to ensure our businesses and the vital sectors of our economy have survived. The Government is supporting over 750,000 jobs in Ireland through the pandemic unemployment payment, the jobseeker's benefit and the temporary wage subsidy scheme. All these jobs keep families going. We welcome the VAT rate. We welcome everything that is being done in investment in our rural towns and villages, especially under the Minister for Employment Affairs and Social Protection, Deputy Humphreys.
I welcome the reduction in the rate relating to the transfer of farms within families from 6% to 1%.
Finally, the previous Fine Gael Government delivered a budget surplus and an economy that is allowing us to borrow at low rates. The current Government has a plan in place to save lives, provide for those in need and protect the most vulnerable. I am proud to see these measures being put into place by this Government to fight Covid-19 and prepare our country for Brexit.
We have one minute each for Senators Buttimer, Cummins and Burke. I am conscious that we have agreed to allow the Minister to reply at 4.07 p.m. I have no wish to short-change him.
I will make one quick point. In the allocation of the biggest budget spending ever, it is imperative to do one thing. I mean what I am about to say in a non-political manner. The Minister was Opposition spokesperson for almost a decade. It is imperative that the moneys allocated in respect of health, disability and the hospice sector are not given to the HSE to administer. The moneys must be given to organisations like COPE and Marymount University Hospital. I will challenge the Minister and the Minister for Finance to sit down with those of us who are practitioners in order to ensure that the money goes to the organisations. We have had a decade of supplementary budgets in health. That is my only point. It will be the Minister's legacy if he gets that right.
I congratulate the Minister and wish him well with his portfolio. I worked with the Minister on the finance committee and I have no doubt that he will do a fantastic job in his new position.
This is a fantastic budget. I congratulate the Minister and his colleague, the Minister for Finance. I have one issue relating to Ireland West Airport. Money has been given to Cork and Shannon airports. That is welcome for those airports. I urge the Minister to look at Ireland West Airport as well because we have people commuting on a weekly basis from the west of Ireland to London, Scotland and Germany. It has been a great outlet for the people of the west of Ireland to seek work on a weekly basis in those countries. They are commuting. It is as easy to go from Ireland West Airport to London as it is to go from the west to Dublin. The airport is in a position whereby it could need funding. I appeal to the Minister to have a look at it.
In the brief time I have I wish to focus on the capital investment programme that the Minister rightly pointed out as being the largest in the history of the State at €10.1 billion. It is right and proper that we are investing in capital infrastructure now. It would be remiss of me not to mention a significant capital project in my county of Waterford - I know the Minister has been briefed on this. I am referring the North Quays project. This will deliver significant accelerated growth in line with Project Ireland 2040. It is important that the infrastructure funding is signed off without delay. The Minister for Housing, Planning and Local Government, Deputy O'Brien, committed to his Government colleagues that this would be done in September. It is now October and there is a time sensitivity attaching to the matter. I am keen to stress the urgency of that to the Minister.
I thank all the Senators for their co-operation. It was a tight timeframe, unfortunately, but we agreed that we would call the Minister at 4.07 p.m. I am happy to say that it is now 4.07 p.m.
I have until 4.15 p.m. Is that correct?
The Minister has eight minutes.
I thank all the Senators for their contributions. I listened to them carefully. Many issues have been raised and different perspectives have been shared. It is important to say that this budget is from a coalition Government of three parties, Fianna Fáil, Fine Gael and the Green Party. All have had significant input. We have worked well collaboratively in the preparation of this budget. It is important for the country that it was be done in that spirit.
There are some over-arching themes in the budget that all Senators have touched on in many different ways. These include the protection of public services and the improvement of these services, where we can, with particular emphasis on health, housing, education, climate and so many other areas. Reference was made to the whole area of investment in our economy for the future and investment in infrastructure, which is critical.
We must meet the twin challenges of Covid-19 and Brexit. The truth is that matters are developing rapidly. There will be a Cabinet meeting in less than an hour. The situation in the North is very serious. We are aware of the decisions made by the Northern Ireland Executive. We have serious problems here too. As the first priority, we have to do all that we can to protect the public, protect public health and protect lives. The framing of this budget has been a complex process given the unprecedented level of uncertainty that we face. That is why we have tried to retain as much flexibility as possible in respect of having a recovery fund and a contingency fund for measures that we will need to implement to respond to Covid-19, while at the same time having as certain a pathway for the public finances as we can given all these challenges.
Many issues were raised. In the few minutes available to me I will focus on several of them. The supports provided for business by the previous Government and by the new Government in this budget are particularly significant.
The continuation of wage subsidy scheme into next year is of huge comfort and a source of confidence to employers, many of whom are really struggling. That the State is willing to pay a share of the wages of their employees is a demonstration of our commitment to helping them to get through this period. We have provided a rates waiver of €900 million, given local authorities that full allocation back, provided approximately €600 million in restart grants, reduced the two key VAT rates, the standard and the lower rate, and introduced a range of liquidity measures, including a €2 billion credit guarantee scheme, even though the appetite among businesses to take on additional debt is weak at the moment, perhaps for understandable reasons given the level of uncertainty and the anxiety that all of them have to deal with day to day. We have introduced a suite of tax measures that I know the Minister for Finance, Deputy Donohoe, will have spoken about earlier, including tax warehousing which is of very significant benefit to businesses.
The new scheme that the Minister for Finance announced yesterday is hugely beneficial for businesses that have to close or whose trading opportunities are significantly impacted by Government-imposed restrictions on health grounds. The Government is willing to pay to keep these businesses alive. We have that duty to businesses that were viable in 2019, pre-Covid. We know they are inherently good businesses. It is not their fault that they cannot trade so this is an innovative scheme through which the Government will help them to meet their fixed costs to get through this period and give them every possible chance of surviving.
A number of Senators touched on the tourism and hospitality area. A range of measures has been in place in that regard. The Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media, Deputy Catherine Martin, has a €55 million envelope for a tourism business support scheme, which will be of real benefit. What we achieved yesterday in the funding allocation for the arts, culture and sport is remarkable. All of this will be delivered. The overall test of the budget is how we deliver it on the ground to the people who need those supports. This will be our focus now. The budget gives us the opportunity to do it in terms of the provision of the resources, and we now must deliver.
Of all the issues that were dealt with yesterday, we can take some pride in the additional funding provision for disability services, which was raised today by many Senators. In addition to the funding for existing services, there is €100 million for new measures, school-leavers, day services, respite services, personal assistant hours and assessments of need for children, which the Minister of State, Deputy Rabbitte, and I are determined to tackle. It is not acceptable that young children are waiting a number of years for an assessment and on the other side of that assessment find there are no services for them. We are determined to address this issue. The funding allocation for mental health is the funding sought. Sharing the Vision is being funded and will be implemented in full.
What we are doing in education is transformative. Over 2,000 posts have been created, in the main in the special education area. I welcome this. The bereavement grant and social welfare payments were mentioned. My mum was widowed at a young age. Increasing the widow's grant from €6,000 to €8,000 is the right thing to do despite the real constraints we are operating under. The heritage and biodiversity area was touched on. We have managed to provide significant increases in funding. On the current side, €16 million is provided to protect biodiversity and fund the National Parks and Wildlife Service and on the capital side, there is an increase of €8 million.
Senator Craughwell, as he always does, raised issues relating to the Defence Forces. I have had a number of discussions with the Minister for Foreign Affairs, Deputy Coveney. I am conscious of the recruitment and retention issues in the Naval Service, particularly around specialist posts. I visited Haulbowline in August, where I received a very detailed briefing. We are keen to address those issues but we need to do it in a manner that is consistent with wider public pay policy because as a Government, it is our objective to negotiate a new public service pay deal in the weeks ahead, if it is possible to do so.
I again thank Senators for their contributions. I will always engage with people directly if they want to come to me on individual issues. It has not been possible to respond to every issue raised, although I would have liked to do so. The budget we brought forward will make a real difference. I have no doubt about that. It is an unprecedented budget for an unprecedented set of circumstances. We will now go about the work of translating that immediately, including the €50 million in immediate funding for hospices, voluntary disability service providers and community organisations. This is 2020 money All of these measures will make a real difference. I look forward to working with Senators in the future and I hope to come back to this House on many occasions.
I thank the Minister for his time for the House and Members. In accordance with the order of the Seanad of 7 October, the House will suspend now until 4.30 p.m.