I wish to share my time with Deputies Power and Johnny Brady.
Financial Resolutions, 1998. - Financial Resolution No. 5: General (Resumed).
Debate resumed on the following motion:
THAT it is expedient to amend the law relating to inland revenue (including value-added tax and excise) and to make further provision in connection with finance.
—(Minister for Public Enterprise)
Is that agreed? Agreed.
I welcome the opportunity to contribute to the debate on the 1999 budget introduced by the Minister for Finance last week. Members, and the public generally, will already be fully aware of the principle features of the budget so I do not propose to dwell on the individual measures in it. However, the strategies outlined by the Minister for Finance provide clear evidence of the determination by this Government to ensure it was a budget for the elderly and the lower paid and a budget to reward work. It was also a budget to ensure the current levels of unprecedented economic growth are sustained, that the benefits of economic growth are maximised with significant steps being taken to maintain social inclusiveness and effect major personal tax reform to benefit the lower paid, by taking a further 80,000 people out of the tax net, the number increasing from 324,000 to 404,000 now out of the tax net.
They should not have been in it.
This is five times the average number taken out in any other previous budget. The budget ensures the economy is managed in a prudent and effective way in planning for the longer term. This budget was geared to providing better public services, better infrastructure with capital expenditure up by 30 per cent and long-term planning to take care of our increasingly ageing population in the future, thanks to dramatic changes in our health services.
I will speak about the work and objectives of my Department in developing a sustainable tourism sector, an active culture in sport and recreation and an enhanced partnership approach to local development. I will elaborate on how the 1999 budget measures and increased Government funding will impact in supporting the strategies under way to develop these areas. Over the past ten years Ireland has climbed to the very top of the international tourism performance league with the number of visitors and, more importantly, foreign revenue earnings from tourism increasing annually. In that period, overseas visitor numbers have more than doubled from 2.4 million to 5.2 million while foreign revenue earnings have almost trebled from £800 million to £2.1 billion. Over the same period employment has doubled from 60,000 to 120,000. Three out of every four jobs in tourism are full-time. I have every reason to believe that 1998 will be yet another record breaking year for tourism nationally and Bord Fáilte's growth targets of 8 per cent in visitor numbers and 9 per cent in revenue in 1998 will be achieved.
I was particularly pleased last week to secure by way of Supplementary Estimate further funding amounting to £6.4 million which will allow Bord Fáilte to reinforce and build on the activities and programmes initiated last year. These extra resources will also support a special effort by the board to boost activity in continental markets, including Germany, where a number of initiatives are planned to redress the decline of recent years and to organise, with the representatives bodies, a special initiative involving the small players in the industry, such as bed and breakfasts, farmhouses and other guest houses to promote their facilities.
The additional funds will facilitate a review and further development of the tourism brand Ireland project. This is one of the major tools available to Ireland's tourism marketing effort and, as with any branding strategy, there is a requirement to review its progress and measure its vitality and impact. Ensuring the effectiveness of tourism brand Ireland is essential if the challenge of creating further economic growth and employment in the years ahead is to be successfully met. The targets set for tourism in 1999 at 7 per cent growth in visitor numbers and 9 per cent in total foreign earnings are very challenging, particularly given the ever expanding tourism economic base as a competitive pressure facing the industry. However, the increased funding will help to ensure that Bord Fáilte's marketing campaigns reach a sufficient level to make the necessary impact in our core markets, and thereby achieve those targets.
Virtually all capital funds under the operational programme for tourism projects have been committed. However, the independent product management boards in Bord Fáilte and Shannon Development have worthwhile tourism projects on hand which merit funding support if such is available. At the same time there is a possibility that decommitments will occur prior to the conclusion of the programme at the end of 1999. The Government was concerned that because of the very strict deadlines in terms of approval and draw down of funds, any such decommitments might occur too late in the programme to allow them to be reallocated to other projects. Accordingly, to allow for an orderly completion of the programme, a special allocation of £6.5 million will be made available by the Government in 1999 to the Bord Fáilte product development board and £1 million to the Shannon Development product development board essentially to underwrite possible future decommitments. These funds may be used only in respect of applications received in the normal way under the tourism operational programme.
The contribution which two successive EU operational programmes for tourism have made to our recent tourism performance cannot be overstated. They will have leveraged investment of £1 billion in product development, marketing and training. We have delivered on key targets and demonstrated value for money in terms of use of EU funds. There is no doubt that my Department has been active in preparing the most persuasive case possible for the continued funding of the tourism industry under the next round of Structural Funds.
Tourism has much to offer in terms of addressing many of the key priorities being put forward by the European Commission for the next round. These include protection of the environment, regional development, encouragement of small and medium sized enterprises, social training and employment creation. Moreover, the potential level and depth of co-operation in tourism marketing on an all island basis is also something that the EU should be anxious to support.
As regards the critical issue of a tourism destination marketing fund for post-1999 period, I am considering a range of options as to how such a fund might be constituted and operated on a partnership basis with the industry. Given the uncertainty over future EU funding, we have to be prudent and consider all alternatives. No decisions have been taken at this stage in terms of tourist levies but it is one option under consideration. Any such levies would have to be considered in the widest context, including the implications for tourism and the use of any funds raised.
The Government decided in 1997 to approve grant assistance, up to a maximum of £5 million, towards the cost of implementing a bid to host the Special Olympics world summer games 2003 should it be successful. Subsequently, Special Olympics International sought an interim guarantee of £2.5 million from the State against potential financial loss by the 2003 Special Olympics summer games organising committee. It was impossible for the Government to issue an unconditional guarantee that it would undertake to underwrite any debts arising from the holding of the games.
However, with the approval of the Minister for Finance and the agreement of the Government, I have informed Special Olympics Ireland that, in order to enable the games organising committee to step up the momentum of its fundraising efforts and to leverage financial backing on the scale required from other sources by the end of 1999, the allocation for the games in the 1999 Estimates will be increased from £250,000, as provided in the Abridged Estimates, to £2.5 million, which represents 50 per cent of the total grant approved towards the cost of organising the 2003 games in Ireland. Last week's budget made provision for the additional allocation and the new allocation will be published in the Revised Estimates for 1999. The 2003 Special Olympics to be held in Ireland will be the biggest sporting event anywhere in the world in that year. I was in contact with Mr. Tim Shriver during a recent visit to New York, where I also met Ambassador Jean Kennedy-Smith, and they assured me of their continued support for the event. I am very hopeful of a positive announcement shortly.
I wish to turn to sports and recreation. I very much welcome the additional moneys being made available by the Government for the sports capital programme in 1999, which will increase by £5.3 million or 58 per cent over the Estimate allocation in 1998. The development of a quality infrastructure is crucial to the future of sport in Ireland. In this context the sports capital programme administered by my Department is very important. This programme provides National Lottery funding towards the provision of sports facilities at national, regional and local level. It is the primary vehicle for promoting the development of sport and recreational facilities in Ireland.
Earlier this year, in the context of the 1998 round of grant allocations, I announced that I was initiating a comprehensive review of the programme. The review, which has been ongoing for a number of months, was undertaken in the context of the implementation of policy for sport and recreation in line with the commitments in the Government's An Action Programme for the Millennium.
The review of the programme, which I expect will be completed before Christmas, has involved the examination of the objectives, terms of reference and criteria for existing schemes and the role of other Departments and agencies in the provision of sport and recreation facilities. The main objective of the review is to develop a new programme which will provide a more strategic and co-ordinated approach to the use of available resources for sport and recreation, particularly in areas of greatest need and assist with the creation of opportunities to participate in sport and recreation through access to facilities, especially by young people. Upon completion of the review, details of the revised programme will be widely publicised and it will be open to clubs and organisations to apply for funding.
I welcome the announcement in the budget of £500,000 in 1999 for the Ridge project on the north side of Cork city. This is a unique and ambitious project to transform 100 acres of land on the north-western ridge overlooking the city into an important focal point for sport and recreational activity for young people in the area. The total cost of the project is £2.2 million.
As the Department of Tourism, Sport and Recreation has responsibility for the sports capital programme, which included provision for swimming pools, it is logical and reasonable that it should have the additional responsibility of the operation and management of the swimming pools programme. In this regard I am conscious of the objective in my Department's strategy statement to adopt a more strategic approach to sports facility provision. Having responsibility for both programmes will facilitate a more balanced and integrated approach to the provision of swimming pool facilities.
The swimming pool programme is funded by surplus national lottery funds. Under this programme, capital grants are available towards the approved cost of refurbishing an existing swimming pool and building a new pool, inclusive of the cost of modest ancillary facilities. All proposals must be supported by the local authority. Where a project is being undertaken by an organisation other than a local authority, the proposal must be considered, in the first instance, by the local authority concerned. Before supporting an application, the local authority would have to be satisfied the proposal is viable, the balance of funding required to complete the project is available and the project, when completed, will have a satisfactory level of access available to the public.
I consider capital investment in this area to be positive and worthwhile. Many counties do not have proper facilities and conditions and others leave a lot to be desired. The vast majority of people using swimming pools are under 18 years of age and it is estimated that several thousand children are using pools every day.
In line with the commitment in An Action Programme for the Millennium, the Government decided to initiate a tender procedure for the design, construction, financing and management of a 50 metre pool. This competition has attracted considerable interest from both the private and public sectors, and nine qualified candidates were issued with a comprehensive and detailed project brief. The deadline for the submission of tenders was 27 November 1998 and the proposals received on that date will now undergo a detailed evaluation process with a decision expected early in the New Year. The Government has agreed to provide capital grant assistance, up to a maximum of £6 million, in my Department's Vote in 1999 towards the cost of implementation of the successful tender.
The Irish Sports Council Bill, 1998, is currently before the House. It provides for the establishment, for the first time in the history of the State, of a statutory agency exclusively dedicated to the promotion and development of sport. The role of the new agency, to be known as the Irish Sports Council, will be to plan and support the future development of Irish sport in conjunction with the various sports organisations and thousands of volunteers throughout the country who have been sport's lifeblood in Ireland for generations. The introduction of this legislation has been one of the Government's priorities since coming into office and a key commitment in An Action Programme for the Millennium. I have every confidence that the new council, when established, will constitute the lynchpin of the Government's policy of securing a more focused, strategic approach to the future development of sport in Ireland.
I welcome the increased Exchequer resources made available to my Department this year and in 1999. The additional funds reflect the ongoing commitment and determination of the Government to develop tourism as a key sector of the Irish economy, a recognition that sport and recreation is a major contributor to the social and economic life of the country and provides an assurance to enhance the development framework to assist in the integrated approach to local development and related issues.
I welcome the opportunity to speak on the budget. I would like more time, but it contained so many nice things that many Members are anxious to express their thanks to the Minister, Deputy McCreevy. No budget has been so well received as this one. Last Wednesday I was extremely happy with what my fellow county man had achieved in presenting his second budget. I only became worried when I read an article by Dr. Conor Cruise O'Brien in the Irish Independent paying tribute to the Minister.
Some time ago the Minister and the Government indicated that while the economy has been going through an exceptionally good period in recent years, certain areas still suffer serious disadvantage. It was with a view to tackling that problem that the Minister decided to focus attention on areas of greatest need. The cake has not been spread equally throughout the country and the Minister tried to correct that imbalance last Wednesday.
The main aspects of the budget have been covered repeatedly but it is important to acknowledge the major changes in income tax. Some 80,000 workers will be removed from the tax net and the number of taxpayers in the marginal relief system will fall from 82,000 to just less than 25,000. A number of Members expressed concern that work held no great attraction for young people because they might be better off on social welfare. The fact that people will earn £100 per week before paying tax is a major advance and I hope we can continue such progress.
One provision in the budget which attracted much comment, some by people who were not aware of the full picture, was the change in betting duty. The Minister has decided that from 1 July next, provided alternative arrangements are put in place for funding the Irish Horseracing Authority and Bord na gCon, duty on off-course betting will be reduced from 10 per cent to 5 per cent, and the levy on on-course betting will be abolished. Many people thought it was because the Minister comes from Kildare and was familiar with horses and punters that he was giving them some corn, but it is not as simple as that. Over the past few years there have been major changes in the betting industry, not just in Ireland but throughout the world. Off-shore bookmakers have been advertising for Irish clients and offering tax free facilities. While we received £45 million in betting duty during the past year, that was threatened, as were jobs in the industry, by the 10 per cent tax rate.
The Minister has taken the right decision in reducing the rate. It will reduce the attraction of off-shore betting but in two to three years the amount of betting duty received by the Government will rise again and this step will have been self-financing. When Deputy Dukes was Minister for Finance he reduced betting tax from 20 per cent to 10 per cent and he received much criticism, but within three years revenue under the new rate had returned to the level received under the old rate. For the first year or two there may be a smaller return but there will be accelerated growth in the amount of betting taking place. In the long-term, the decision is in the interest of the Department of Finance and Ireland because revenue and jobs will be protected. Thousands of people are employed in the racing industry and the issues are connected. It was important that the Minister dealt with on and off course betting. They are interlinked and the Minister indicated that the funding will not be made available unless alternative arrangements are put in place. I have spoken to a number of people involved in the racing industry and they welcome the Minister's decision. I am sure all those involved will work out a new funding arrangement for the future.
The price of a packet of cigarettes was increased by 5p in the budget. There is a long tradition of smoking in Ireland. Unfortunately, thousands of people are addicted to nicotine. This is doing untold damage and having an enormous effect on people who are giving up their lives for the sake of a cigarette. They also take up many beds in hospitals and the cost to the Exchequer is enormous. This is aside from the personal cost to families and in terms of people's health.
The Government should introduce a ban on tobacco advertising. It is important that such a ban is put in place quickly. Successive Ministers have, for health reasons, increased the price of tobacCo. Sexy advertisements are sponsored by the tobacco industry, which is one of the most powerful industries in the world. These campaigns are targeted particularly at young people because many of its older customers are dying and the industry must replace them. I encourage the Minister for Health and Children to introduce such a measure as quickly as possible. It would be in the interests of everybody.
I welcome the budget which is good, just and fair. The poor, the elderly and the disadvantaged will all benefit. I particularly welcome the reduction in the tax burden on the lower paid and the provision of extra benefits for older people and the farming community.
Last year the Government entered a contract with the people. The budget is a continuation of the implementation of elements of that contract. The Minister is ensuring that the revenue generated by the economic boom is distributed to the less well off in our society. Lower paid workers and people on social welfare share the benefits. The emphasis throughout is on social inclusion and improving living standards.
I welcome the removal of over 80,000 taxpayers from the tax net. Nobody with an income under £100 a week will have to pay income tax. This will provide more incentive to people to work by making it preferable to social welfare. It will encourage more people to join the workforce. This should help alleviate the labour shortages in certain areas of employment.
Farmers have suffered a great loss of income as a result of poor weather conditions and the collapse of the Russian market. The Minister should be congratulated on the measures he has taken to date. His continued commitment to agriculture is evident in the further new measures in the budget. The introduction of the new farm assistance scheme to address severe income difficulties is most welcome. This scheme will provide vital support for those worst hit. It will benefit 13,600 farm families, or twice the number currently availing of the smallholders' scheme. A further £15 million will be provided for the existing smallholders' assistance scheme, which is already worth £33 million a year.
In excess of £40 million has been allocated to farm investment schemes next year. These schemes were withdrawn by the rainbow Government. It is also worth noting that members of both left wing parties have continued to add insult to injury by their comments in recent months about developments in agriculture. The farm pollution control and dairy hygiene schemes will facilitate more farmers to avail of the REP scheme. In doing so, farmers can avail of £50 per acre which is payable under the scheme.
I also welcome the VAT refund worth almost £11 million in a full year. I am glad the Minister has also looked after our elderly citizens and rewarded them for the sacrifices they made in order to create our healthy economy. These people worked hard at a time when working conditions and pay were much worse than today.
The £6 increase in contributory pensions and the increase of £13,000 per couple in the amount a pensioner can earn before tax is due are most welcome. They will improve the quality of life of pensioners, particularly those who wish to remain gainfully occupied in later years. The increase will remove 15,000 older people from the income tax net. Approximately 10,000 people over the age of 70 will be eligible for medical cards for the first time because of a change in income guidelines. The introduction of a pro rata pension for the self-employed, which includes farmers, is another positive step.
The provision in the budget for remedial teaching services to every school is evidence of the Government's commitment to improving opportunity at all levels of education. Access to remedial teaching is most important and is a key element in ensuring that all children receive the best possible education. This measure, together with the decision to give disadvantaged schools home liaison officers, is vital to the promotion of social inclusion.
Other measures, such as the £50 million for rural water and sewerage schemes, are also welcome. They will help to address the problem of rural depopulation by encouraging industry and people to move to towns and villages. The extra money for local authorities for disabled persons' and essential repairs grants will benefit those in need of changes to their homes to facilitate a disabled person.
The valuable role of carers in society has been acknowledged by an allocation of £18 million in addition to an existing allocation of £45 million. The improvement includes a significant relaxation in the residency conditions which formerly attached to carers looking after elderly or infirm relatives. Up to now, they had to live with the person for whom they were caring. They will now qualify if they live within a reasonable distance of that person. This will benefit a huge number of mothers.
The importance of having people cared for in their community cannot be over-emphasised. Moving a person in need of care to accommodation outside the security of their own homes and into the relative social isolation of nursing homes and hospitals must be a last resort.
These are only some of the many positive elements of the budget. I welcome it and compliment the Minister and the Government.
(Carlow-Kilkenny): Ba mhaith liom mo chuid ama a roinnt leis na Teachtaí Jim Higgins agus Theresa Ahearn.
Is that agreed? Agreed.
(Carlow-Kilkenny): Ta sé deacair i mbliana díospóireacht chiallmhar a bheith againn faoin cháináisnéis seo mar tá na mílte milliún punt ar fáil ag an Rialtas agus níor thárla sin riamh cheana. Ba ghnách le Rialtais cáin sa bhreis a thabhairt isteach chun airgead a thabhairt do dhaoine nach raibh airgead acu. I mbliana ní raibh deacracht ar bith ag an Rialtas seachas an t-airgead a roinnt go ciallmhar. Theip orthu sin a dhéanamh.
When the Government has millions of pounds to divide, a duty is imposed on it to look after those most in need. I do not criticise the budget because it gives too much to income taxpayers. All those measures are most welcome and everybody who will receive extra money is delighted and grateful to the Government.
As politicians we have a duty to look after the poorest in society. If we are in politics for any other reason we have been led astray in our ambitions.
Since becoming a Member I have spoken time and again about the way in which widows have been treated. That is the test that tells me the budget is a failure. The Minister, Deputy McCreevy, does not lack kindness. I know from experience where his heart is. It was a deliberate policy by the Government to decide the poor can wait. Regardless of what ambitions the Government may have in five years time, the poor should not have to wait.
The role of widows has never been recognised by Government. They are given an allowance of about half what they should get. This year, in a land of milk and honey, they are given a miserly £3. Given that the rate of inflation is currently 2.3 per cent, by the time they receive this allowance in June it will not have kept up with inflation. What philosophy dictated, at a time of plenty, that for a widow — playing the role of husband and wife, depending on social welfare and with barely enough on which to survive — the rate of inflation was sufficient? She received nothing extra for her children under the child dependant allowance. I am completely baffled by this. The £3 increase was given to everybody on social welfare — the long-term employed and those on disability. Oliver Goldsmith's poem, The Deserted Village, written in 1770, has more sense than many others.
Ill fares the land, to hast'ning ills a prey, Where wealth accumulates, and men decay:
At a time when Ireland is regarded as a wealthy country it would be a pity if we forgot those who need assistance. If the increase granted to widows was 40 per cent it might make sense. The pattern of giving them far less than enough is being repeated here, with the view to increasing the payments to those on social welfare.
I know from experience, when I was in charge of football teams and so on, the efforts made by widows to ensure their sons have an opportunity to play games. They have a difficult role in life and the least we can do, at a time of plenty, is grant an increase which would justify the pretence that they are being looked after. The budget is a failure given that there was an opportunity to help those in need; instead, it was decided to look after those with plenty. It was not a question of the Government deciding either to give a break to income taxpayers or increase allowances for the poor, given that the Government had £1,400 million at its disposal. The children in the Gallery, no more than some of us here, have no concept of £1,400 million. That money was available.
Given the promise that the next budget will look after the poor, I hope there will be some extra money for widows. I do not mean a miserly increase of 3 per cent or 5 per cent. Even pensioners who got an increase of £6 per week are caught up with inflation and under the drugs refund scheme will have to pay £2.50 per week extra. This is an area where the Government should have delivered.
When I heard the previous speaker say how the poor and the elderly were looked after, I realised it was difficult to have a sensible debate on the budget. If he thinks the poor and the elderly are looked after he has not even read the budget speech.
Those on disability have many disadvantages. The £3 increase was an insult to them. Hospital waiting lists have been left almost untouched. I know a lady on morphine who has spent two months waiting to get to a specialist for an operation on her arm. One person has suffered a second heart attack while on the waiting list. The Minister had the money and it should have been directed at those who need help.
That farmers were treated well in the budget, as claimed by the last Government speaker, is beyond belief. Farmers are genuinely in trouble financially. What they got is miserly. Even the £2 million for installation aid will not go half way towards helping those in the queue.
At a time of plenty it was decided our cars were not dear enough and VRT was increased. The motor industry had made marvellous presentations indicating how they increased employment. The price of cars is put even further beyond the realm of the realistic.
Given that the budget did not look after those in need it has to be classed as a failure.
(Mayo): Since the Dáil resumed on 30 September we will all acknowledge that we have had to wriggle our way through the protesters outside the gates. All the interest groups — not pressure groups but people with legitimate interests looking for their rights — looked to the budget as providing their moment in the sun when their grievances would be addressed. I was amazed at the instant media euphoria and I must commend the budget as an excellent PR exercise. It was sold in advance to the media but the glamour, the glitz and the sheen is beginning to wear off. It is seen as a missed opportunity. From the point of view of those interest groups it does not address their needs.
The farmers came to Leinster House on two occasions in the past two months, 4,000 on the first occasion and 40,000 on the second. Never before has agriculture been on the broad of its back. All kinds of initiatives were mooted because people are genuinely in dire need. A whole way of life is being swept aside. There is no doubt that come spring, unless some drastic measure is put in place, there will be major casualties. Neither the factories nor the export markets have been tackled. Yet the remedy for the plight of farmers was the farmers' dole.
I am an expert on farmers' dole, given that when the system was changed in the 1980s I represented a constituency which had a high density of people on farmers' dole. I was one of those who fought to put in place a proper regime which would be means tested and where expenses necessarily incurred in running the farm would be taken into consideration. The current system is elaborate, painstaking, difficult and sometimes unfair. There is a long and difficult appeals process. God help those who wait for their share of the additional farmers' dole to come onstream. They will not see it until this time next year. It takes up to six months to deal with one appeal. In relation to disabilities Deputy Browne has hit the nail on the head.
This will reduce the number of appeals. There will be more done for farmers dole this year.
(Mayo): The same number of social welfare officers dealing with more files in a conflict situation will not reduce the number of appeals.
As regards disabilities, millions of pounds will be spent on millennium projects. This budget was a missed opportunity in regard to people with disabilities. If we are serious about people with handicaps and disabilities, we should make a clear commitment that the new millennium will mark the dignifying of rights, facilities and services for them. That is the kind of tangible initiative which would strike a chord with the public rather than build white elephants and towers in the sky which are a sad reflection on our paucity of thought.
I had hoped this budget would look after carers. A mere token was offered in regard to the £200 for respite care and an extension of the domiciliary care. At a time when we are trying to nurture the extended family and encourage people to look after senior citizens during their so-called ‘golden years' in order to allow them to live in a natural home environment, we should be making more money available to people who are prepared to stay at home and carry out that important duty.
What about the income disregard?
Deputy Higgins, without interruption, please.
(Mayo): Under the heading of child care, £1 million was provided for a programme to prepare people who have committed offences for release back into the community. That is a commendable initiative — I believe in the reintegration of people into the community — however, if that is the only initiative in terms of child care, I wonder what direction we are going in.
A sum of £12 million was allocated to alleviate health waiting lists last year and the figure is £8 million this year. The Minister of State will be aware that people are sitting in corridors in the casualty ward of University College Hospital Galway waiting for a bed. I know of a person with cancer of the bowel being brought into the hospital and sent away again. People in need of heart, hip, cataract and prostate treatment must wait for 20 or 25 months. In some cases, their conditions are life threatening.
A total of 600 new housing starts have been approved. When I joined Mayo County Council in 1979, we built 232 houses in urban and rural areas. Dublin Corporation was building 600 houses ten years ago. Young couples are attempting to secure loans of £90,000 or £100,000 in an overheated housing market. Modern marriage is difficult enough without people having the millstone of a debt they cannot repay around their necks for up to 30 years.
A serious danger is posed by the threat that the economy may overheat and the bubble may burst. Economies operate on a cyclical basis. I hope I am mistaken but I believe this so-called boom, which is irrelevant to the vast majority of people, will come to an end and I am concerned this will happen sooner than people expect. One must consider the context in which the boom has occurred. It has occurred against the backdrop of a ten year major expansion in the United States and a huge surge in Asian markets up to 1997. It has occurred against a backdrop of a major recovery in the UK economy and a stable performance by EU economies. It has occurred against the backdrop of the opening up of new markets for our products in Russia and the former Eastern bloc countries. When Krups closed down, it cited global factors as the cause. Difficulties in the Russian market have affected our agriculture sector. Fruit of the Loom management pointed to cheap labour costs elsewhere.
The boom in house prices here is incongruous in a world of deflation. The housing market defies the economic laws of gravity. Credit borrowing increased by 20 per cent last year whereas our economy grew by only 8 per cent. That could be sustained if the worldwide economy was booming. However, the Russian economy is in tatters, the Japanese economy is on the broad of its back and the UK economy is going into recession. When the UK sneezes, we get pneumonia. This budget represents a missed opportunity. We are living on the top of a credit bubble which will undoubtedly burst. I hope I am mistaken but past experiences indicate that will be the case.
The Government parties, together with sections of the media, have hailed this budget as the panacea to all our ills. It is said it strikes the right balance, that the Minister for Finance is a Santa Claus figure and that the budget demonstrates the Government's commitment to wiping out disadvantage, poverty and injustice.
There are many welcome provisions in the budget. The Minister, having undergone a startling conversion, has begun to make the taxation system more equitable. He has begun to ease the tax burden on people on low incomes and has increased child benefit and old age pension payments. These increases could and should be much better but we acknowledge the improvement. The Minister has tinkered around with the carer's allowance which, though insufficient, is at least a start. We have listened to a succession of Ministers praising the Minister for Finance and delighting in the allocation of money to their Departments.
The Minister for Justice, Equality and Law Reform, spoke yesterday of the Government's commitment to continuously advance the position of people with disabilities to enable them to achieve greater independence and to participate more fully in the life of the nation. The Government has placed disability on the agenda of every Government Department and public body. I wonder where on those agendas disability is placed. Is it item 1 or item 3, or is it simply another item under Any Other Business to be addressed if and when all other agenda items have been dealt with?
How high on the agenda of the Department of Public Enterprise is disability placed? On 11 November 1998, the Minister for Public Enterprise announced that for the first time the Exchequer was providing direct capital funding for public transport. Of the £56 million provided, the Government was providing £17 million for 100 additional buses. In addition, 50 new buses were approved for purchase as part of the reallocation of the Luas EU assistance. There is a total of 150 new buses on our roads. The Minister stated that this was the first time the Government provided direct capital grants to CIE for investment in public transport.
Good news travels fast especially when the Minister for Public Enterprise makes an announcement. We could be forgiven for believing that this announcement would be good news for all people when the Government is committed to the core principle of promoting empowerment through appropriate, accessible and responsive services. However, it was not good news. Good news may travel but wheelchair users may not, even on one of the 150 new buses which are funded by the taxpayer. In reply to a parliamentary question tabled by my colleague, Deputy Olivia Mitchell, the Minister for Public Enterprise stated it was her policy that all transport providers should, as far as possible, make their services and facilities accessible to people with disabilities. The Minister pointed out that the new buses were urgently required to meet traffic congestion problems in Dublin. However, they are not wheelchair accessible. The Minister also said there are low floor buses available which may be suitable and will shortly be in use in London; that Dublin Bus is seeking to obtain a single bus for trials; that a pilot programme will begin in March, and that Dublin Bus should be in a position to begin ordering wheelchair accessible buses from the year 2000. Despite the Government's commitment to promoting access for people with disabilities to public spaces facilities and the transport chain, the Minister did not ask Dublin Bus to buy low floor buses. Was she not aware of the technical difficulties and that trials would have to be conducted, when in opposition her party demanded instant solutions to the transport problems encountered by people with disabilities?
The Fianna Fáil policy document, "Meeting the Challenge of Equality — A Policy on Disability", published by the Minister of State, Deputy Mary Wallace, in opposition stated that there was no economic reason for Dublin Bus to continue investing in non-accessible buses. I agree. There is but one reason for the continuation of this policy, the lack of political will. The Minister promises much but delivers little. The Government's philosophy is, "That was then, this is now". It is all style but no substance.
This morning on the "Today with Pat Kenny" radio programme I listened to John Doyle who has spent the past two nights in his wheelchair protesting outside the headquarters of CIE at Heuston Station. He described how he has to crawl on to a bus. I am ashamed that there are no wheelchair accessible buses for people with disabilities unless they live along the No. 3 bus route. Donal Toolan said that many disabled people would not show the same determination as John Doyle, that they would be beaten down by the system and remain imprisoned at home, trapped, excluded and marginalised. People with physical and sensory disabilities have to listen to buzz words such as "independence", "mainstreaming" and "participation". Is it any wonder they are cynical and angry and that John Doyle has had to take such extreme action?
How much more empowered or mobile are people in a new wheelchair if they cannot get on a bus? How much more independent are they if they cannot get a taxi? How much more confined are they if they cannot get on the DART whenever there is a strike? All the fine words and promises are not of much use to them if they are not backed up by fine deeds.
During the debate on the Fine Gael Private Members' motion on transport the Minister agreed with my colleague, Deputy Olivia Mitchell, that "we are not a proper nation if we do not allow public transport access to disabled people". I agree. The Minister has admitted defeat. Even though the money was available to make us a proper nation she did not bother. Another year for some could be a life sentence for others.
The budget tinkers with the edges of the problem. It pays lip-service to the commitments in the programme for Government and nods in the direction of promises. Aided by Deputies Fox, Blaney, Gildea and Healy-Rae, the Government voted down two motions tabled by Fine Gael and supported by all the Opposition parties which would have forced Fianna Fáil and the Progressive Democrats to live up to their promises at a time when the coffers are bulging and in a budget in which the gamblers were granted concessions worth £24 million.
On the rights and entitlements of people with physical and sensory disabilities and a mental handicap, carers and advocates need not look for assistance from Deputies Fox, Blaney, Gildea and Healy-Rae. They lost an opportunity to ensure the needs of people with disabilities and a mental handicap would be addressed in the budget.
A sum of £1 million is to be made available to organisations and groups which support carers. While this is welcome, there is no meaningful commitment to smaller national agencies. There is a severe lack of investment in the personal assistance schemes for people with disabilities who need help to get out of bed, wash, dress and eat. Most of those with physical disabilities are not in the tax net. The budget, therefore, is of no use to them.
It is the responsibility of the Government to support family members who for too long have had to shoulder an unfair burden and to ensure equality of treatment for those who cannot speak for themselves. It is an indictment of the Government that at a time of unprecedented prosperity it failed to provide the necessary resources to vindicate the human rights of people with a mental handicap and with physical and sensory disabilities who require improved and additional services. People should not have to take to the streets to demonstrate they have a right to day and respite care, education and training and transport. It was our hope that following the budget there would not be a need for them to do so again but we were wrong. John Doyle is proof of that.
During the debate on the motion on services for people with a mental handicap Deputy Hanafin quoted the mother of a mentally handicapped child who said that if her child was a criminal, a cow or had a hurley in his hand, he would get money from the State. She can now add that if her child was a gambler, he would also get money from the State.
The Commission on the Status of People with Disabilities stated that its report was an ambitious one and once its recommendations were implemented would change the world for many people with disabilities, their families and carers. They deserve no less. It is the least to which they are entitled as equal citizens. The budget could have changed the world but it did not.
I wish to share time with Deputies Ardagh and O'Flynn.
Is that agreed? Agreed.
I have listened to and read with great interest the comments which have been made by Opposition Deputies and others about the Government's second budget which has been widely welcomed. Those who have been critical have had to scratch around to find something about which to crib. In introducing the budget the Minister of Finance explained that it was his intention and that of the Government "to benefit those who have not done as well as most of us in recent years, in particular the old and lower paid. However, in delivering fairness, we must not abandon prudence. We must remember that the world economy is in a volatile state. The open nature of our economy and the high level of foreign investment here are reminders that economic booms do not last forever".
The budget measures in the area of housing for which I have special responsibility come on top of the 20 per cent increase provided for in the 1999 Estimates for social and local authority housing, the largest increase since 1986. Deputy Higgins said there would only be 600 housing starts next year. The correct figure is 4,500. The Deputy does not appear to understand anything about the local authority housing programme if he believes his own statement in the House today.
In housing the budget will benefit people who are most in need. However, we did not throw caution to the wind and there can be no apologies for this. The housing measures were targeted very carefully. We set out to improve the position of some of the weakest in our society, the elderly, those with disabilities and the young homeless.
The task force on special housing aid for the elderly is specifically designed to enable elderly persons living alone to enjoy decent housing conditions. At no cost to the occupier, it provides for the carrying out of basic works to prolong the useful life of the house so that for as long as is necessary it can continue to provide an acceptable standard of accommodation for the occupants.
The scheme is operated at local level by health boards, is funded in full by my Department, and has, since its inception in 1982, improved 35,000 houses. I recently visited some houses which had been improved under the scheme and was impressed with the improvements made under this well targeted scheme to enhance the quality of life of the elderly in a very cost effective manner.
The budget provided an extra £1.6 million for the task force bringing the total funding in 1999 to £6 million — the highest level ever. I expect improvement works to be carried out under the task force to 3,500 houses in 1999.
The essential repairs grant scheme has been a modest but worthwhile social housing measure. It enables people in accommodation which cannot be made fit in all respects at a reasonable cost to have basic repairs carried out to their houses so that they can continue to provide an acceptable standard of accommodation for the occupants. The scheme has generally been used to secure essential repairs to dwellings occupied by elderly persons, often in isolated rural areas.
The essential repairs grant is improved in two respects in this budget. First, for works commenced on or after 2 December, the effective maximum grant limit generally imposed by local authorities is increased from £1,800 to £4,500. Second, rules governing the scheme are being amended to allow it to be operated in urban areas — a significant change. An additional £1.25 million is being provided in 1999 to facilitate the introduction of these significant improvements.
One of the undertakings in the Government's An Action Programme for the Millennium was to review the disabled persons grant scheme, the terms of which had not been improved since 1993. Under this scheme, local authorities grant aid necessary adaptations and improvements to houses to meet the needs of a disabled member of the household. The budget provides for significant improvements to the scheme. First, local authorities are being enabled, at no cost to themselves, to increase the effective maximum grant by 50 per cent, from £8,000 to £12,000 where works commence on or after 2 December. Second, in the case of private houses the grant can now amount to up to 75 per cent of the approved cost of the works rather than twothirds, as previously. The cost of these improvements to the terms of the scheme are estimated at £3 million in 1999.
In the case of young homeless people, it is often necessary to provide more than accommodation to meet their needs — it is necessary to equip them with the employment and other skills necessary for life. Foyers are specifically designed and managed to provide both accommodation and training opportunities for young homeless persons. I am especially pleased that a £1 million special grant has been made available in this year's budget for St. Catherine's Foyer in Dublin which, along with funding under the capital assistance scheme, will enable the first Foyer to be developed in this country.
Our relatively small private rented housing sector is under considerable pressure at present. A significant factor in rising demand for private rented accommodation over recent years has been the growing numbers of third level students who require accommodation outside the family home during their studies. The growth in third level student numbers has been remarkable in recent years. In 1990, the number of third level students stood at about 68,000. There are now more than 105,000 and numbers are expected to continue to grow, reaching 120,000 over the next five years.
This pressure is in addition to the increased demand generally for private rented housing associated with high levels of net immigration, including returning emigrants and, of course, our high rate of new household formation. I am very pleased that new fiscal incentives to assist the third level colleges to provide suitable student accommodation have been announced in the budget. This incentive has considerable potential to ease pressures in the private rented sector over the coming years.
Last April, the Government's action on house prices abolished tax deductibility of interest on borrowings used for investment in residential property. However, the Finance (No. 2) Act, 1998, recognised that some investors would have entered into binding contracts to purchase properties prior to 23 April but the properties would not have been completed until after that date. In these circumstances, transitional tax relief was made available if the borrowed moneys were employed by the investor on or before 31 December 1998.
The 31 December deadline has been represented as causing problems in certain circumstances. In particular, it was argued that the end of year deadline could encourage developers to force projects through during these dark winter months with attendant risks on certain sites. The budget, therefore, extends the transitional relief arrangements to 31 March 1999. It remains a requirement that the binding contract must have been entered into before 23 April last.
In much the same way I was aware there were difficulties in a number of on-going urban renewal projects meeting the extended 31 December 1998 deadline for the current urban renewal scheme because of delays in getting planning permission, archaeological problems and the bad weather. I was pleased, therefore, not least for reasons of safety on building sites at this time of year, that the Minister for Finance was in a position to announce a further short extension of the deadline for the current scheme up to 30 April 1999, subject to certain conditions being met. While this extension had to be confined to residential developments only, having regard to the current position with regard to the negotiations with the EU on commercial development, I am nevertheless satisfied that it will facilitate the completion of a substantial number of developments which could not otherwise have met the deadline. The residential development at the west end of Temple Bar has also been delayed because the highly important archaeological dig in the area took longer than expected to complete. The deadline for completion of the residential development there has also been extended, therefore, from 5 April to 31 December 1999.
Housing and urban renewal projects must have the interests of the community at their heart. Projects which ignore the needs of people are fundamentally flawed. I refer to the special £700,000 allocation made in the budget to enable the provision of a new civic centre for Darndale in north Dublin. This allocation will be additional to funding which has already been secured from various sources. The proposed centre will incorporate an integrated enterprise centre, a comprehensive work related training centre, a child care facility, community health centre, a one stop shop for Dublin Corporation services, community shops, a community resource centre and a Garda office. The centre is not only important in its own right but also as a new model for delivering local services where they are most needed.
I have not heard any Deputy question the steps we have taken in the budget. Rather, they have concentrated their fire on areas they feel might be taken up by the public or commentators as omissions. I will deal with some of these.
There were some comments that the new house grant should have been increased in the budget. Such a suggestion is naive in the extreme. Any increase in the level of the new house grant would, in present circumstances, merely go on to the price of new houses. This would undermine all the efforts we have made to take the steam out of house prices. Anyone who, at this stage, suggests an increase in the new house grant shows little understanding of the operations of the housing market.
Some may argue that stamp duty might have been abolished on all houses purchased by first time buyers. This is to ignore the radical overhaul of stamp duty rates undertaken in our action on house prices package last April. It also ignores the fact that tinkering with stamp duty rates in favour of one sector tends to cause bottlenecks and distortions.
However, the Dublin Docklands Development Authority is currently working on a model which would link the application of residential tax incentives to the provision of affordable housing for those whose incomes are at a level which means they cannot purchase housing under current market conditions. I also hope that any new model of affordable housing provision to be piloted in the docklands area might be capable of being applied elsewhere, in the context of the integrated area plans for the new urban renewal scheme.
Others have asked what the budget has done to ease social housing waiting lists. This conveniently ignores the fact that the Estimates for the coming year increased the local authority housing programme to its highest level since 1986 with record levels of funding. It also ignores the very substantial increases to the levels of assistance under the voluntary housing capital assistance scheme which I announced last month — the second such announcement within a year. It is to suggest that housing lists, which started to grow in the early part of the decade, can be dealt with in one fell swoop. This is dangerous talk. It is akin to suggesting that we should forget all we learned during the 1980s about building large single class housing estates on the edges of our cities and towns and put bricks and mortar before the wider needs of communities.
Complaints about this Government's housing record are self-seeking and designed to whip up anxieties among the public. They are not only poorly judged, they are misleading. In the short time we have been in office, we have taken more action on housing, both public and private, than the previous Government did in its entire term in office. If the previous Government had been alive to the growing mismatch between demand and supply in housing and had acted swiftly, as we did under our action on house prices package, we may not be facing current difficulties in housing.
Some might ask what the budget did for people in local authority housing. I am very much committed to improving the living conditions of people who reside in local authority houses. In addition to providing for the continuation of the remedial works programme and further resources for the regeneration of the Ballymun housing estate, I am happy that the 1999 Estimates provide for another major initiative in relation to existing local authority housing.
Earlier this year, Dublin Corporation approached my Department proposing the redevelopment of nine inner city flat complexes over a five year period. These are Lourdes House, Mountainview Court, Sean Treacy House, St. Joseph's Mansions, St. Jude's Gardens, St. Michael's Estate, Poplar Row-Courtney Place, Marmion Court-Queen Street and Bridgefoot Street-Island Street. The overall estimated cost of the proposals put to me by Dublin Corporation was £87.8 million. This project has now been approved and expenditure is provided in this year's Estimates for the commencement of the work in 1999. A special allocation of £6.5 million is provided in the 1999 Estimates and the full amount will be available from my Department. This has been the best budget for housing for many years. There will be no apologies for the legacy of neglect by our predecessors. Our programme will continue to focus on action on behalf of all those in housing need.
I spoke earlier about the need for safety in building sites. I would like to refer briefly to water safety, which has long been one of my particular interests. At present, responsibility for providing public awareness of water safety, for education on prevention of accidents in water and for provision of instruction in water rescue and resuscitation, rests with the National Safety Council. The council has similar responsibilities for public awareness of road and fire safety, and I am pleased to acknowledge the council's contribution across all its programmes since its establishment nearly 12 years ago.
However, I am convinced that we should reestablish a separate and distinct body to promote water safety. This activity depends, almost uniquely, on the efforts of about 5,000 volunteer activists who give selflessly of their time and energy. In the final analysis, it is the views of these volunteers which is paramount. From my contacts with them, I know they feel a distinct parent body is required to give due recognition to their efforts. I am pleased to respect their wishes and I very much welcome the provision of £200,000 in the budget to assist in establishing a separate and distinct body to promote water safety. I also hope that the separate identity for water safety which the new body will provide will enable additional funds to be raised through corporate sponsorship.
I welcome the budget. It hits the right note. It should achieve the stated aims of the Minister, Deputy McCreevy. It will help to sustain a vibrant economy by having a minimal effect on inflation and encouraging a welfare to work movement and it will make it more attractive to start up and stay in business. Giving tax relief for personal allowances at the standard rate of tax is a major reform which allows the possibility for all taxpayers to benefit through changes in personal allowances in future years. The generous increase in old age pensions, services for carers and social welfare payments will help to maintain social inclusiveness.
One of the highlights of the budget was the doubling over three years of the income guideline of the medical card for those over 70, with a third increase in 1999. Plans are being implemented for the longer term and I welcome the publication of the Stability Programme 1999 to 2001 which sets out the Government's budgetary strategy for the next three years. The Stability Programme 1999 to 2001 is the best produced, most interesting and easily readable booklet produced by the Department of Finance. It is an ideal Christmas present for anyone who is interested in how Ireland's economy got to where it is today and where it is going in the future. There is fairly detailed information about the next three years, but the detail diminishes as we approach 2050, in 50 years' time when it is expected there will be one million persons over 65 years of age, with roughly the same overall population as at present.
It is interesting to read the Department of Finance's view on the reasons for Ireland's recent strong growth. They include macro economic stability and social partnership. They can be attributed to the work of all the Governments in the 1990s, particularly to the former Taoiseach, Charles Haughey, the former Minister, Ray MacSharry and the then Minister, Deputy Bertie Ahern in the 1987 Government who kick-started the sound economic policies and partnership agreements. Other reasons for the success are the baby boomers of the 1970s or, as described in the parlance of the Department of Finance, a dynamic demographic structure. This allowed for buoyancy in labour supply and, together with Donogh O'Malley's free secondary education, it raised the quality of the labour force. There was strong business investment. A high level of public investment in physical and human capital was undertaken with the help of EU Structural and Cohesion Funds.
There are nuggets of information in the Stability Programme 1999 to 2001 such as growth in Ireland is expected to be more than double the European average each year over the next three years. It is expected that the general Government debt will be down to 43 per cent of GDP by the end of 2001 as against 59 per cent today. In the three years to the end of 2001 it is projected that employment will increase by 1,700 jobs, and that the unemployment rate will reduce from 7.8 per cent today to 5.9 per cent at the end of 2001. That is about as near as we can get to full employment.
Getting back to basics, I would like to address the matter of the integrated services project, ISP, which is designed to tackle the problems associated with pockets of acute deprivation in urban areas. The first phase of that project related to research which involved a close examination of the position in four areas, including the canal communities of Fatima Mansions, St. Teresa's Gardens, St. Michael's House and Dolphin House. Following that work, the Cabinet Committee on Social Inclusion and Drugs decided to proceed with the implementation phase of the project. The Minister of State, Deputy Flood, is committed totally to the implementation of the project. At my request he attended a very successful meeting with the local task force in the area.
The Taoiseach launched the implementation phase of the ISP last Friday at a special meeting of the secretaries general of relevant Departments and chief executive officers of relevant agencies. The Taoiseach, in unscripted remarks, passionately appealed to the organisation chiefs present for a fair deal for those children growing up and living in flat complexes. Those children deserve the same educational opportunities as children in Foxrock or Malahide. High standards of pre-school care, schooling and after school care is a right of all children, irrespective of their parents' means. Co-operation between the Department of Education and the communities in the flats is required, among other things, to achieve these high standards in flat complexes. It will also require resources to be put into the early education of the children in those flats so that they are on a level playing field with the children of Foxrock and Malahide in terms of secondary and third level schooling and getting a job.
What has been the response of the Department of Education to date? Nothing. For years all the public representatives of the area and the local activists have been trying to get a representative of the Department to attend the monthly meeting of the Dolphin House Task Force, all to no avail. I asked other organisations about the Department's attitude to meetings which deal with deprived areas and social exclusion and I have got the same reply, "A very poor response." I ask the Department to take on board the Taoiseach's passionate plea to all service providers to co-operate fully with the integrated services project. I look forward to the Government cooperating fully and wholeheartedly. As there were no funds in the Estimates or the budget for this matter, I hope a supplementary Estimate will be needed for the Department of Education and Science as a result of funds well spent on children from areas of acute deprivation who, we hope, will become the high earners and the heavy taxpayers of the future.
It is a matter of great pleasure for me to speak on this budget debate. It is the first occasion on which many of the Opposition Members will agree with most of what I have to say. I cannot remember a budget which has been so widely acclaimed. Many complained last year's budget was tailored to suit the wealthy. They cannot say that of this year's budget. This is a budget aimed at the current and long-term needs of society and which will ensure the continuation of the social partnership, the bedrock on which the economic climate we enjoy today is built. It is pay back time for those who exercised pay restraint for many years in the interests of national well being.
The Minister is to be complimented on his radical reforms of the tax system which focus on the low and middle income groups. This initial move in the direction of a system of tax credits will enable the Minister to focus on the different groups in the taxation brackets in the next and forthcoming budgets in the lifetime of this Government.
The Minister has tackled the serious problem of the high tax rate for those on low income. I foresee further improvements to the levels at which people move into the higher tax bracket in future budgets. The Minister will finalise his shift in the direction of tax credits in next year's budget. He has made major moves to simplify the tax system and has made it more equitable. The concentration by the Minister on the lower paid is the correct and desirable approach for this year's and future budgets.
Those who wish to take up part-time work can earn up to £100 per week without incurring income tax liability. This will prove to be of immense benefit to people who are unwilling to undertake part-time work because of the tax implications.
Some Opposition Members have said the tax cuts, which will cost £581 million next year are mean. They have also said the £310 being allocated to social welfare is miserly. Some have focused on the reduction in betting tax. If one looks hard enough, one can find fault in anything. If some Members on the other side of the House had been present at the wedding feast of Cana, they would have looked for a better quality wine. If they had been present at the miracle of the loaves and fishes, they would have complained that the fish was not fried and would have asked for a portion of chips as well.
I ask the knockers to look at the positive aspects of this budget which have received widespread support from the general public and all bodies of opinion. One does not have to criticise because one sits on the Opposition benches. It would be nice to see critics adopt a positive approach. It would be good to hear some balance. Maybe I am expecting too much.
The removal of 80,000 people from the tax net, following the decision not to tax incomes under £100 is the greatest bonus the low paid have ever received from any Government. This is a milestone in taxation history. I would like to think that all Members of the House share this opinion.
The Minister has asked for reports on social welfare, public sector pay and pensions — in the light of our ageing population. These will have a significant impact on the framing of next year's budget.
This year, for the first time in many years, PAYE workers can see appreciable benefits. There is a major impact on the earnings of single people and married couples. The overall context of provisions mean there is a significant improvement in the take home pay for the employed.
I congratulate the Minister for the substantial increase in the level of the old age pension. The increase of £6 per week for those who fully qualify is greatly appreciated. This signals the intent of the Government and of this Minister to deliver on the £100 per week pension within the timeframe specified. There is a Government commitment to do this on a staged basis and it will be honoured. I was pleased to see the provisions for those on occupational pensions. This body of people will make significant gains. They have not received the treatment they deserve in many past budgets.
The Minister has dramatically reformed the area of pensions for the self employed in the following ways: he has increased substantially the level of tax deductibility for pension contributions up to a maximum of 30 per cent and the self employed will now own and control the fund as it is being built up. There will be no compulsion to invest in the fund upon retirement in a single inflexible annuity. The pensioner will retain ownership of the capital sum invested at retirement. In this budget the Minister changed this system which was grounded in the dark ages.
Social welfare recipients have received increases in line with the minimum recommendations of the Commission on Social Welfare. There are additional payments for those in receipt of children's allowances and increases for families in receipt of the family income supplement.
The Minister has given substantial sums to the areas of mental handicap services, the physical and sensory disability services and the elderly community support services. In total, he has given these services an additional £24 million. He has tackled the problem of waiting lists by investing £9 million in community support services to free up beds, and an additional £8 million to the existing waiting list initiative of £12 million. In doing so he has delivered on another Government promise. No one can deny the Minister's positive financial input into ensuring the best of health care in the areas mentioned and his commitment to tackling the waiting list problem.
He has widened the bands for those who qualify for carers' allowance and has granted a free telephone allowance for all qualified carers. He has abolished the tax on benefit-in-kind to employees who are provided with child care facilities and has granted capital allowances to employers for buildings for child care facilities. This was a most desirable move in the right direction.
I could go on about the many benefits accruing to many sectors. Everyone is aware of the many positive and worthwhile provisions in the budget. There are always areas where people feel more could have been done. I expect that all areas of social welfare where there are perceived inequities will be catered for in the coming year and in next year's budget. Anything more would be an exercise in gilding the lily.
There has been a strong reaction from the motor trade and the public to the additional VRT on cars over 1,400 cc. I hope the Minister will look again at this aspect of the budget and take into account the major contribution the industry, which has had many lean trading years, and the hard pressed motoring public, have made to today's buoyant economy. I hope he will address the issue of those who have already committed themselves to the purchase of vehicles which are not yet available and cannot be registered before January 1999. If he must impose such a tax for budgetary reasons, perhaps he would raise the entry point to 2,000 cc. That is the only problem I have with this budget and the Minister should look at it in the near future.
Deputy McCreevy has done a magnificent job in framing the budget. He deserves our full support and acclamation.
Tell that to the young parents of the State.
I am glad to hear my colleague express his views on the budget. Let us be clear, however, that following last year's budget, we were the ones who made the Government change its tactics in respect of tax concessions. Practically all the concessions last year were given to the better off. I welcome the concessions given to the poorer sections of the community.
With a budget surplus of £4.1 billion available to the Minister, he has not earned much kudos. He had the money in the bank. I would hate to see what he would do if there was a deficit as there was for many years previously.
In the time available we can only speak on a few areas of the budget. I am sorry the Minister of State, Deputy Molloy, has withdrawn from the House because I want to deal with the current housing situation.
The Bacon report has been published and certain sections of it put into operation. It is having no effect on the price of housing. The Government can claim that the price of houses is stabilising but it is stabilising at a very high level. I am not satisfied the Government took action in this area.
In consultation with my county council, I will put forward a motion. There have been complaints again and again that we are not being constructive in our criticism and we are not making alternative proposals. I hope the following motion will be taken by next Monday's meeting of Wexford County Council: "To call on Wexford County Council to utilise existing land resources and purchase further lands within the county, for the provision of fully serviced sites to build houses under the builder licence scheme and other suitable schemes in all areas of County Wexford, and where agreement can be reached between the three main urban councils in County Wexford." House ownership is one of the greatest ambitions of Irish families. This ambition is unique to Ireland and is a very steadying social requirement which contributes greatly to the foundations of family life. The rapid rise in house prices is inhibiting growth in the economy. It is also putting upward pressure on costs through wage inflation. Present housing prices are outside the capacity of the average wage earner and are putting undue pressure on available disposable earnings, putting discomfiting pressure on marriages and family life.
A fully equipped three bedroom house in Wexford now costs in the region of £85,000, which is almost as dear, if not dearer, than prices in every big English town. The mortgage repayment on that level of borrowings, including insurance, is in the region of £600 per month. These prices and repayments will force huge numbers of people onto the council's housing list. The current annual housing programme in Wexford is approximately 100 houses per annum and there are 1,000 applicants on the list, which means there is currently a ten year waiting list. Proposals to build 100 houses a year are completely inadequate.
There is a moral obligation on the Government and Wexford County Council to step into the breach before the housing list reaches saturation point. Wexford County Council has the legislative facilities at its disposal to carry out an alternative system to provide private housing at reasonable prices. The only small hitch is that we do not have adequate finances to so do. We must move swiftly and aggressively with a new policy and programme.
Adequate safeguards must be built into the system to avoid speculation by potential house purchasers. I make that statement in the full knowledge of what it means. I am sure Members of the House who are also members of local authorities would agree. I cannot understand the Government, given the amount of money it has in the bank, allowing the building industry to be taken over by speculators, at a cost to the average wage earner.
I am sorry the Minister of State, Deputy Molloy, has left the Chamber because I wish to make an important point about housing. Wexford County Council gives borrowers housing loans at fixed interest rates which are greater than the current market rate. Given the significant fall in interest rates over the past few years and the likely continuation of this trend, many local authority mortgage holders find themselves locked into high fixed interest rate loans. For example, Wexford County Council has 1,640 mortgage account holders, 65 per cent of whom are on fixed interest loans of between 8 per cent and 12.5 per cent. The Minister of State knows that because he is a member of a local authority.
I am no longer a member.
It is scandalous.
I accept that.
The total value of these mortgages to Wexford County Council is £9,320,491, or 46 per cent of the total loan book due to the council. That is being operated by the Department of Finance. I proposed a resolution to Wexford County Council at the October meeting before the estimates, calling on the Minister for the Environment and Local Government and the Minister for Finance to permit local authorities to refinance their capital debt in order to facilitate the council in helping its mortgage holders remortgage at a much lower market rate. I was unaware that much of the council's own borrowings from the Office of Public Works are at a high fixed interest rate. The experience of Wexford County Council in this regard is undoubtedly similar to all local authorities.
I accuse the Department of Finance of working illegally. It has a house finance management committee and has secured situations where it is borrowing money at 4.5 per cent and is insisting on Wexford County Council and every other council paying it 12.5 per cent for most of the money. That is scandalous and is bordering on illegality. I call on the Minister for the Environment and Local Government to put this matter right immediately.
When our council looked at our estimates over eight or nine meetings, as does every council, we found that this was a very taxing situation. The people who must pay the 12.5 per cent rate are the poorest sections of the community because they cannot qualify for a council loan unless they are refused a loan by other financial institutions. Despite the amount of money the Government has, it is not prepared to allow the county councils to operate a fair and honest scheme. I accuse the Governments of acting illegally in this regard.
I will turn now to agriculture, although it is impossible to do it justice in the time available to me. The recently released GDP figures for County Wexford have conclusively proved what many of us have been saying for some time, that County Wexford is the third most disadvantaged county in Ireland, with 55 per cent of EU GDP. Only Roscommon, at 51 per cent, and Leitrim, at 48 per cent, are more disadvantaged. This deplorable statistic for Wexford reflects the failure to provide sustainable manufacturing and service jobs and throws on the county's agricultural sector the task of sustaining its economic and social fabric.
County Wexford is the victim of sustained erosion of its economic base. If this had happened elsewhere, there would be task forces across the county, as has happened in most of the other counties where the problems lie. Donegal has 72 per cent of EU GDP, Kerry has 64 per cent and Clare has 89 per cent. These counties have obviously benefited much more from Government support than Wexford has, but they are given task forces and inclusion in the Objective One retention proposals. That is an extraordinary situation.
Agriculture is the core of Wexford's economy. We have the highest dependency on full-time farming of any county in Ireland. Between 60 per cent and 70 per cent of the economy of County Wexford depends exclusively on farming. The survey released by Teagasc this week, which indicates that only 18 per cent of farmers intend to make additional investment in the coming year, has grave implications for the servicing sector in all counties, particularly in County Wexford. This is reflected in the figures. In 1996, on-farm investment was £400 million; in 1997, it was £250 million. The projected figure for 1998 is £268 million and for 1999 is £168 million. The Acting Chairman, who is from a rural constituency, will know the effect this will have on rural towns and villages.
I was surprised yesterday to hear the Minister for Agriculture and Food describe this as a landmark budget. However, it is certainly marking the agricultural sector which is going backwards at a terrible speed. At the moment, 5,200 farmers are leaving farming annually and this figure is expected to increase considerably next year. The Minister's reaction was to reintroduce the farm installation scheme, at a cost of £2 million. However, he did not tell us that he suspended it. The French Government spends £38,000 on young farmers starting up in agriculture — we spend £5,400. The Government had the cheek, knowing that agriculture was in difficulties, to suspend that scheme. I cannot understand the Minister's attitude to giving farmers the family income supplement. He refused to do so, but he is providing £15 million, a kind of "special dole" for farmers, which will come into operation next June. What about the thousands of small farmers who will have little or no income for the rest of the winter? The Department of Social, Community and Family Affairs does not want to know about them.
The VAT refund was increased from 3.6 per cent to 4 per cent. The VAT refund from the German Government is 13 per cent, and we are competing with German farmers. The French figure is around 10 per cent. The Government could have given some money back to agriculture by giving a decent VAT refund and a direct payment through the family income supplement, but it has refused to do so.
I concentrated on two areas because it would not be possible to go into much detail on the budget as a whole. I welcome certain measures in the budget. However, two areas, housing and agriculture, were completely neglected.
I too will concentrate on just one aspect of the budget because I am sure we will have plenty of time to talk about the other areas where there are deficits, child benefit, carers and the paltry allocation for overseas development, all affecting the most impoverished, desperate people in our society and worldwide at a time of unprecedented economic boom and in the context of national experience of our own deprivation and devastation at times in the past. The budget is a national disgrace, and we all feel embarrassed and ashamed of it.
The Government excelled itself in the cavalier way in which it treated the whole area of child care in the budget. It could not claim not to know that there was a crisis. It could not claim to be unaware that an expert working group has been working for 18 months on a package that took in all aspects of supply and demand in child care, the crisis within it and the resources that are needed. In particular it could not claim not to know of the recommendation presented before the budget to begin a seven-year strategy to cope with an ever increasing crisis not just for the economy but also for family life. This was totally side-stepped and ignored. There was a complete cop-out, even in the language in which it was treated in the presentation of the Minister for Finance —"The Government is conscious of the growing wish for a recognition of child care needs in the tax system. The question of child care tax relief raises important and complex issues".
As if we did not know, as if the Government did not know, as if it had not been advised by every agency in the country, from the child carers associations to IBEC. Even IBEC never centred on family needs until it had to made recommendations and pointed to the crisis that exists.
The national children's nurseries associations, among others, gave us the facts on child care. Irish parents pay 20 per cent of their income on child care. European parents pay, on average, 8 per cent. Child care costs are not listed in the cost of living index because they are still seen as marginal and, in this patriarchal society, they are still seen as the responsibility of women. I believe there is a view among certain politicians that if women went back to the home and looked after their children we would not have to worry about this problem. Never mind the economy, never mind equality of opportunity, never mind the cost of educating and training women who until 1973 were forced back into the home. Now not even when they are needed is it accepted that the work of women inside or outside the home has any value. This is totally depressing 20 years after I and many others sat on a working group on child care for working parents back in 1978. What has changed? There has been no change in the attitude and mindset that demands that women take responsibility for the domestic and parenting needs of this country while housing costs and the economy demand that they work in the workforce with no resources and no help. It is a scandal, and it shows how little we have moved psychologically, philosophically and politically in the whole area of equality of opportunity.
This budget is a reflection of the Cabinet and, unfortunately, of many politicians on the other side of the House who do not have child care problems because they have women in the home looking after their children. They are not forced to juggle, to miss meetings, to make apologies, to worry about their children being sick, and miss out on their employment as well. This is a crisis that the Government has signally failed to address. I would like to think, since the budget has been announced, and particularly since they have gone back to their own constituencies and their own communities, that they realise this is not a middle class problem as has been alleged, in an ill-informed and biased way, by certain people on current affairs programmes. This is a problem that particularly affects our children, one third of whom are deemed to be living in poverty.
The package that the expert working group and the National Women's Council have been working on is not middle class and it is not exclusive. It takes in every area and concentrates particularly on the needs of parents and lone parents in disadvantaged areas. The package started a seven-year strategy, modestly and practically. One aspect has been taken out — that benefit-in-kind should be given as a subsidy to employers for the most privileged parents, the few who have child care facilities within their workplace.
I want the Government to recognise, and the women and working parents to let it know, how signally it has failed to meet expectations and the further crisis into which it has plunged us by doing nothing in this budget and delaying doing anything for at least another year. Some 90 per cent of the children being minded by childminders in this country are being minded by people in the black economy. That does not do the children, the work the childminders do or the income and rights of the childminders, any good. It shows how we have marginalised this work and treated it in the same way as the unpaid work of women down through the years. It is forcing highly qualified women, who are needed within the economy and whose income is needed in households to help pay the extraordinary housing costs we now have, out of an economy that does not allow them equality of opportunity or choice as to whether they will have their children minded in their own home, of flexible working hours that will allow them to take part in child minding themselves or to avail of high quality registered care in well run child care centres throughout the country.
This is not an urban problem. Every working politician knows that one of the greatest disadvantages that rural areas suffer from is the lack of a structure that allows women in those areas to go out to work. One of the things that astonishes me is that, given the focus on farming and the fears for its future, there is no inclusiveness, no recognition that providing child care structures in rural areas would enable women to contribute towards farm incomes which are devastatingly low in many places at the moment. I am sorry to say that the lack of planning, value and professionalism in this area is a reflection of the patriarchal society which has never really come to terms with women's work inside or outside the home or paid or unpaid in the community. We are faced with a crisis which started 20 years ago. The same old arguments are being used. I am old and weary enough to remember the debate on equal pay, equality of opportunity, the employment equality legislation and paid maternity leave which was grudgingly given with the shortest amount of paid leave provided in the whole of Europe. Just recently in this session there was a debate as to whether unpaid parental leave would grudgingly be given.
This budget, delivered during the best times we have ever had, for all the economic, social and family reasons I have outlined, failed on every level and has written into the record the extraordinary marginalising, devaluing and undermining of the work of women and their status in society. I say this in sorrow, particularly as we approach the millennium and after 25 years of a women's movement which continues to be denigrated by people as some sort of middle class community organisation working for privileges rather than rights.
I am happy to contribute to this debate. Over a number of years, and in particular over recent months, there have been several attempts to fly around the world in a hot air balloon, all of which have been doomed to failure. I suggest to Richard Branson that if he harnessed the hot air generated by the budget not only would he get around the world once, but he would probably make it twice. Never was there a budget from which so much was expected and which delivered so little.
I accept and understand that it is a big man's budget for big business, big farmers and big gamblers who are friends of the Minister for Finance. All these people will do well out of the budget. However, the ordinary people whom I represent are totally devastated by the miserly tuppences which have been handed out in various benefits. Absolutely nothing has been done for small farmers, small businesses, people on social welfare, the aged and those on hospital waiting lists. However, big business with big Progressive Democrats and Fianna Fáil connections has been looked after.
It is unacceptable for the Minister of State, Deputy Molloy, to state in the House that nothing could be done for young couples seeking to buy their first house and that an increase in the first time buyers' grant would have resulted in increases in house prices. This one statement clearly indicated how inept the Government is in dealing with crises. There will always be problems and crises and if the Government is not able to deal with them it should pack its bags and leave and allow in people who can deal with them as Fine Gael dealt successfully with problems and crises when they arose during two years in Government.
The Tánaiste is stumbling around the country from one industrial closure to another, unable to deal with them before they happen. The Minister of State, Deputy Molloy, has stated that nothing can be done for young couples seeking to buy their first house. This shows how inept the Minister and the Government's advisers are. Is the Minister of State aware that there is a means test for third level grants for students at universities and regional colleges? There should be a £10,000 first time buyers' grant for young couples buying a house costing up to £80,000, with no grant for houses costing in excess of this. This is a simple solution to the problem. If this is introduced builders will address a market they will have to meet. This is achievable and possible. The Government has washed its hands of house prices because its friends are the big builders who are creaming off profits. The other evening I overheard a builder saying in the city that houses costing £110,000 left him a profit margin of £35,000. This is outrageous, scandalous and totally unacceptable. The first time buyers' grant should be available for houses up to £80,000. Cavan Urban District Council has decided to move on this in the context of starter houses for young couples, namely, two-bedroomed bungalows.
It does not surprise me that the Minister for Finance said farmers are whingeing and have nothing to whinge about. This is outrageous and shows how far out of touch the Minister is. How could he be so out of touch? Is he talking about Kildare and Meath, the areas he is closest to? I ask the Minister for Agriculture and Food to find out where the Minister for Finance is getting his information. The Minister is correct in saying his friends and neighbours are doing extremely well in farming. However, the small farmers I represent in counties Cavan and Monaghan are far from doing well and there is no gravy train.
I wish to place on the record the average payment in 1997 to the 100 top recipients and the bottom 100 recipients under the various grant schemes from Brussels. In the case of the special beef premium, the average annual payment to the top 100 was £15,583.78, while the average received by the bottom 100, the people I represent, was £51.03. This is less than £1 per week for the bottom 100 and over £300 per week for the top 100 recipients. In the case of suckler cow premia, which are very important to the farmers I represent, the amount received by those in Kildare and Meath was £20,571 while farmers in counties Cavan, Monaghan, Sligo and Leitrim and the west of Ireland received £77.42. I again emphasise that these are annual payments. It gets better for counties Kildare and Meath and worse for counties Cavan, Monaghan and Leitrim. The figures for the extensification premium are £12,399 for the top 100 recipients, while farmers in counties Cavan and Monaghan received £27.85, or 50p per week. In the case of livestock headage, which is very important nationwide, the big farmers with whom the Minister for Finance socialises and goes gambling, received an average payment of £5,378 in counties Kildare and Meath while those in counties Cavan and Monaghan received £20.02. The real boys with the four wheel drive vehicles who go to the races and benefit from the budget introduced by the Minister for Finance are the top 100 who receive arable aid, the average payment to whom was £92,972.28, or £2,000 per week, which is hardly available in counties Cavan and Monaghan. However, there are some poor farmers receiving an average payment of £145 per week. These are not going to the races or rubbing shoulders with the Minister for Finance, Deputy McCreevy. The big boys are doing well and this is why the Government is so out of touch with the reality of life and the hardship on farms and in small businesses. The Government has washed its hands of the people whom I appreciate and recognise and who are struggling to live.
I accept the Minister of State at the Department of Agriculture and Food is a decent man and I am glad he is in the House. He is aware of the crisis in pig farming in Cavan. I was at a meeting in the Kilmore Hotel last Friday evening and saw hard working decent men in tears with their businesses in ruins. Like the Tánaiste and the Minister of State, Deputy Molloy, the Minister for Agriculture and Food says there is nothing he can do. There is huffing and puffing, plenty of hot air but no solutions. I ask the Government to pack up and get out, for God's sake, before the country is ruined.
I wish to share time with Deputies Noel Ahern, Haughey and Kelleher.
I listened with interest to Deputy Boylan and must say he has the shortest memory in the history of Dáil Éireann as only a year and a half ago he sat on this side of the House and things have not changed much in that time — only the weather has changed. I agree with some of the points mentioned by Deputy Boylan which were of a nonpolitical nature. Deputy Boylan went over the top on the weaknesses of the Government. We have achieved a great deal in the past year and a half, and I will enumerate what we have done.
This budget is prudent in its treatment of the public finances by providing a radical change in the tax system and significant increases for the most vulnerable in our society, particularly the elderly. It has also been a very good budget for the agri-food sector.
This year has been difficult for the agri-food sector. The CSO's preliminary estimate for total farm income for the year, released last Monday, shows a decrease of 4 per cent. This is accounted for mainly by substantial increases in input costs, which went up by more than 6 per cent. Despite the problems experienced by several sectors, particularly in the second half of the year, output value declined by less than 1 per cent overall.
Depreciation rose by nearly 6 per cent, reflecting the record levels of investment by farmers in recent years. Also on a positive note, direct payments increased by nearly 9 per cent to £1,024 million. These payments now account for nearly 55 per cent of farm income.
This is a remarkable level of public subsidy, and it will have helped many farm families in what has been a difficult year. That is the gross income, for Deputy Boylan's information.
The House is well aware of the problems faced by the farming community and the many measures that have been taken to alleviate the situation. In recent months I have travelled the length and breadth of the country to attend meetings to listen to farmers air their concerns and grievances. Be it three or 300 — in one case it was 450 — they all got a hearing and an opportunity to suggest solutions and, just as important, hear explanations from me as to why things were going wrong and how we thought we could sort the problems out. Those meetings produced some very engaging discussions which were very valuable.
Farmers need to know they have access to us and that we listen and respond to their needs. We have responded well to their needs, but we are certainly not calling it a day yet. We have to continue listening and being as responsive as possible, and that is what I intend to do.
The pigmeat industry is in crisis. This has been addressed in export refunds, aids to private storage and other methods of alleviating the crisis. The problem is not new, nor is it confined to Ireland; it is worldwide and arises out of the BSE crisis and the classing of swine fever in Holland, where numbers have grown enormously. I am aware of the crisis experienced by farmers in the northeast and northwest due to the lack of slaughter facilities in another part of the island. I have met those farmers, and I sympathise fully with their plight, as they are very efficient farmers. I have received representations from all the Cavan-Monaghan Deputies, including Deputy Boylan, on this matter and met them at the Virginia Show. We must work within the confines of the EU, and pigmeat is not an intervention product, so there are different mechanisms for that industry. The EU is 108 per cent over supply, and my understanding is that the North American market has not reached full expansion yet. It will not reach its full target, a 5 per cent increase, until March 1999.
Deputy Boylan mentioned small farmers. We all know small farmers and identify with them. We feel passionately for small farmers and what they have done for our communities. Rural Ireland without farmers or people living in it is not Ireland. The fodder crisis has been devastating. We have had high levels of rainfall since August 1997 which has devastated poor quality land, mainly in marginal areas. I visited north Meath with Deputy Johnny Brady, west Limerick with Deputies Collins and Finucane and the Duhallow area of north Cork to see the damage. We have tried to address this situation.
There is always a future for farmers, be they big or small. There is a perception abroad that we will have to rationalise and limit the number of farmers. That is not my philosophy, and I never want it said that it is. I believe in a vibrant rural Ireland with farming families, who have been the backbone of our society for many generations. I do not doubt that those farming families will survive. They will get the full support of this Government, which has always had a great commitment to rural Ireland and to agriculture. Let nobody doubt where I stand on this issue. I am not promoting rationalisation or the removal of families for viability; that is not my philosophy. In its assistance to small farmers the Government has committed itself to the viability of that sector.
The 1999 budget and Estimates introduced some very significant measures for dealing with rural exclusion, and providing for a more competitive industry structure in the future. The gross estimate for the Department of Agriculture and Food for 1999 has increased by £73 million to £814 million — another record for expenditure on agriculture and food. This represents a net increase of 19 per cent. Total expenditure, including FEOGA guarantee expenditure, which is not included in the Vote, will be almost £2 billion in 1999. This expenditure will be run on an administrative budget of £133 million, less than 7 per cent of the total amount spent.
The changes to the smallholders assistance scheme will be very important in terms of providing an income safety net for severely disadvantaged farmers.
The means test which applies to the existing smallholders scheme will be modified by giving child related income disregards of £100 to £200 per year per child. Other income will be assessed at 80 per cent, which is a very fair assessment. We have been looking for it for some time. In practical terms, a farmer with a spouse and two children, earning £100 a week, will have assistance payments increased by £28 a week to a total of £66. A farmer with a spouse and two children earning £150 a week would not have qualified for assistance under the old scheme. Under the new scheme that family will receive £26 a week in assistance.
The number of participants is expected to almost double from 6,800 to 13,600. The new scheme will cost £15 million in addition to the £30 million already being spent on smallholders assistance. That is a substantial amount. In addition, the fodder money has been a major contribution. I compliment Teagasc on the assessments it has carried out in all these areas. These were efficiently done and the assessments were very prudent.
Funding for the rural environment protection scheme has been increased by 21 per cent to £176 million. The scheme has attracted a great response with some 38,500 farmers currently participating. The 1999 allocation will allow for more farmers to participate in the scheme and to avail of attractive supports for farming in an environmentally friendly way.
An additional £25 million is being allocated to the reintroduction of the control of farm pollution and the dairy hygiene schemes for 1999. These on-farm investment schemes are targeted towards smaller farms, and that is a focused commitment to rural Ireland. This additional amount brings the total funding available for those schemes in 1999 to £36.5 million. This is in addition to the £45 million which has already been secured in the lifetime of this Government.
The budget provides for a new targeted national scheme of installation aid for young farmers. The scheme will be funded by the Exchequer, at a cost, over three years, of £10 million. There were several other expenditure items which I do not have time to go into such as headage support payments of £111 million, £42 million for disease eradication and controls, which is a terrible state of affairs, £6.5 million for the national beef assurance scheme, and an allocation of £40 million for Leader and INTERREG. The disease eradication schemes cannot continue to burden the taxpayer. We cannot have this inefficiency at farm level from a number of people who continuously wreck the system. Our record on brucellosis and tuberculosis is not good and must be improved.
Rural water and sewerage schemes have been allocated £50 million over the next three years. Although not specifically aimed at agriculture it will benefit the sector greatly. Two programmes are involved, one of which relates to facilities in small rural towns and villages while the other is directed towards improving water quality in private group schemes. This was an outstanding budget on behalf of the people and great credit is due to the Taoiseach and the Minister for Finance for the effort they are putting into running the country.
One of the disadvantages of announcing the budget before Christmas is that one gets to speak for only five or six minutes rather than the 30 minutes one would get if it were announced in February. I agree with the final remarks of the Minister of State as it was an outstanding budget. All of us have certain ideas which we want implemented every year but there is no doubt that the budget was good. It was so good that the response from the Opposition has been all over the place, not just as between the two main Opposition parties but as between different spokespeople within them. Some called for everything to be spent while the initial response from Deputy Noonan was that it was inflationary and too much was spent. However, his colleagues on the backbenches said the opposite.
Part of the political process is that every party puts a spin on issues but recently it has not just been a case of putting the best spin on them as there has been absolute abuse of facts and lies have been told. I briefly saw the Labour Party budget address by Deputy McDowell on television earlier this week and it contained incorrect facts and spin. He stated that the back to work allowance for the long-term unemployed had been reduced, when in fact it was increased. I wanted to get a copy of the broadcast because it totally distorted the facts. It appeared that the statement had been prepared prior to the budget and the party just ran with it anyway, ignoring what the budget actually contained.
I wish to refer to CORI's document. It is a very good group, which I greatly admire, and it operates in my constituency. I listen to their submissions and presentations on basic income every year. However, when I glanced through the group's document it contained incorrect figures. Statistics are misleading given that some may be technically right. The document quotes a figure of £91 million for the social welfare package and much of the analysis in it is based on that figure. However, the package amounted to £305 million. I do not know where that figure came from, given that social welfare is funded from different sources. It is sad that a group for which I have great respect used incorrect figures and then presented such a document. Once the foundation was wrong, much of the comment following it was also wrong.
The tax proposals in the budget were very reforming. Every year the House debates the need for tax reform but it is rarely dealt with. However, the increase in personal allowances this year was staggering and the problem now is to ensure the threshold at which the higher rate of tax is paid is increased by widening the bands so that one does not reach the higher rate quickly. I hope that direction will be taken. Much was done for the elderly this year but I hope the allowance is increased so that more elderly people escape the tax net.
I am chairman of the Oireachtas Joint Committee on Social, Community and Family Affairs and many of the proposals worked on by the committee and sent to the Minister were more or less carried through by him. Our assessment of the situation was good and there is no doubt that many of the proposals in our submission were acted upon, which is a tribute to our realistic approach.
I thank the Minister, although he did not respond to a request that the living alone allowance should be increased. It is very important and, while the £6 per week increase for the elderly is marvellous, there is no doubt that when one partner dies and the other is left with one welfare payment the allowance helps. I hope the committee's proposal for a significant increase in the allowance will be looked at again. For many years it was ignored. It was increased by £1 per week a number of years ago and prior to that it was only increased by 10 pence per week per year.
The CORI document constantly refers to poverty and states that not enough is given to the unemployed. When measuring the poverty index if one averages incomes the same number of people are bound to be in the poverty trap; if they are given an increase of £100 each, the same number of people will still be in the trap if poverty is assessed in that manner. Poverty is not just about money. It is about involving people in their community, giving them something worthwhile to do and making them feel at the end of the day or week that they are making a contribution to their families, communities and society.
I wish to see reform of the community employment schemes, which was not touched on in the budget. They have been taken over by lone parents. These schemes are not equally attractive to everyone. A great deal of social work needs to be carried out, especially in my constituency, and it could be done if the benefits of these schemes were distributed fairly. Everybody should get something out of them but they have been hijacked by lone parents and it is not fair to those receiving unemployment assistance.
Having listened to contributions from all sides of the House in budget debates spanning many years, this year has taken the biscuit in the sense that we have heard about paltry social welfare increases and missed opportunities. These Members are not meeting the same people as I am throughout the country because by and large the budget has been very well received by all sectors and all the social partners.
That is an indication of the way the Government went about formulating the budget. It analysed areas of need and addressed them. The most significant area was tax change and the direction that has been taken in terms of radical tax reform, a topic which has been bandied around the House for many years. At long last we have recognised there is a need to adjust personal taxes to ensure fairness to those in the low and middle income brackets. The budget has started a process of trying to eliminate the wedge that exists between those on low pay and those on social welfare.
While social welfare allowances were increased by 3 per cent across the board, which is well ahead of inflation, the manner in which personal allowances have been addressed is very significant for those on marginal incomes. For example, those earning less than £100 will not be taxed. Over the past few days it has been stated that social welfare payments are paltry and major increases were not provided. However, the facts speak for themselves over the years.
Fianna Fáil in Government has contributed enormously to the advancement of payments to old age pensioners, in particular, and over the past two years it has increased such payments by £15 per week. When the parties opposite were in Government and had resources available to them, they did not significantly increase these payments. I am confident the Government will be early in meeting its election commitment to increase pensions to £100 per week by the end of its term.
On social welfare, unemployment assistance has risen by £3 per week but over the next few years we must increase funding for training. As unemployment levels fall we will have a hard core of people without skills. We must divert funding towards those people, who could find work if they were trained. There is more to be done in that area. On Grafton Street and every major shopping thoroughfare, all the shops are advertising for staff. We must ask ourselves how this can be, when such a high number of people are long-term unemployed. I am confident there will be major improvement over the next few years in training, improving skills, and redefining a person's worth to the community, and that the unemployment figures will continue to tumble.
Deputy Ahern mentioned the living alone allowance. The payment should be changed because it militates against elderly people living together for company and security. If one elderly neighbour moves into another's house, both lose the allowance. We could reduce tension in areas with elderly people. Many of them have asked me about sharing houses. It would also alleviate problems associated with housing the elderly in local authority areas, because it is not always possible to find suitable ground level housing.
There will be major improvements in funding for education and health. The Opposition is making great play of the hospital waiting lists but this problem was inherited and steps were not taken in recent years to counteract the increasing waiting lists for acute hospital services. I am therefore delighted the Minister has announced a waiting lists initiative to address these problems. For some time I have called for a comparative costefficiency study of hospitals to see how efficiently they perform operations. Those that are efficient should be rewarded and those that are inefficient should be asked why they are not performing as well as other hospitals with similar staff and facilities.
I would like to continue but unfortunately, as the previous speaker said, pre-Christmas budget debates are short. I have more to say but I will say it at another forum.
I welcome this budget, which is one of the best for many years and has been wellreceived. The Minister, Deputy McCreevy, had a difficult job — expectations were high and we have seen the development of the new phenomenon of intensive lobbying, possibly because the resources were there on this occasion. Interest groups were well organised and bodies undertook effective lobbying. Pressure groups which had not previously been well organised put forward detailed submissions on this occasion and campaigned actively at the political level to achieve their objectives. Rightly or wrongly, the view was taken that he who shouts the loudest gets the most. Also, many groups asked for a great deal in the expectation of getting less than they requested. This lobbying made the Minister's job particularly hard; it also made life more difficult for a backbench TD, but that is part of our lot.
Despite this, the Minister succeeded in satisfying most people with the budget, while keeping a firm grip on the public finances and the economy. Like other speakers I welcome the income tax changes. On this occasion we saw real reform of the tax system. I welcome the emphasis placed on the lower paid and the removal of 80,000 people from the tax net. I also welcome the generous social welfare increases, particularly those to the elderly. The caring social philosophy of Fianna Fáil came to the fore in this budget. All this has occurred against the background of a fall in interest rates, which is putting more money into people's pockets.
I applaud the £400,000 allocated to the Mater Dei Institute of Education, Drumcondra. This is a third level institution with a special ethos which was struggling because it did not receive State funding. The Minister for Education and Science has responded to legitimate lobbying and, for the first time, has introduced State funding for the institute. This is a good investment.
I also welcome the allocation of £700,000 for the building of Darndale community centre, as mentioned by the Minister of State, Deputy Molloy. Much is happening in the Darndale area — it is planned to develop a village centre, with much funding from the EU, which will make many facilities available to local people. They have put up with a great deal since some bright spark designed a so-called state of the art corporation estate which did not work in practice — it never could have, given its design, its laneways, and the type of housing provided. The houses are now all but refurbished, a new park is being developed, and this budget allocation adds to those measures and shows the Government's commitment to improving this estate.
I am also pleased about the allocation of £300,000 for the restoration of the Pearse family home. It was a disgrace that this house, on Pearse Street, was falling into dereliction. Many of us pass it every day on the way to the north side. I welcome the purchase of the House by the Ireland Institute, a private organisation, and this Government allocation.
I also welcome the money made available for the demolition of flat schemes in the north and south inner city. The Taoiseach's hand can be seen in this decision. If the Celtic tiger rids the city of poor quality flat schemes it will have done a good day's work.
I had wished to speak about child care but my time is up. Perhaps the next speaker will mention it and I can discuss it at another stage.
I welcome the opportunity to speak on the budget. This debate gives us a chance to reflect on the values and priorities of our society and the policies of Government. It gives us clear indicators of the choices being made in terms of public policy priorities. If one analyses the budget one must come to the conclusion that certain values were predominant. Certain areas were dealt with efficiently, but others were comprehensively ignored.
Many years ago Disraeli wrote a book called The Two Nations in which he described England at the time as a country divided between rich and poor. The book brought home to people the divisions in English society at that time and he wanted to put in place policies to address them. Many countries try to do this but fail dismally. Ireland is in a unique situation at present. We have a successful economy and thousands of jobs are being created effectively and efficiently. The investment put into our education system has undoubtedly paid off and many things are going well.
However, there is a deep sense of unease among many people. Even with the Celtic tiger economy, 217,000 people are unemployed. Ireland has the worst problem of low pay in the OECD, with the exception of the USA. There are 50,000 people on local authority waiting lists and there are in excess of 35,000 people on hospital waiting lists. In addition, Ireland has the highest level of functional illiteracy in the OECD and there is a growing number of young people on our streets. People who are benefiting from the Celtic economy are very disturbed by this. They see the evidence of these social problems every day.
One will find up to ten people sleeping on Baggot Street in my constituency every night. The budget provided £1 million for homelessness. How many houses in south County Dublin would that buy to deal with this problem? The answer is not enough. As a statement of values, £1 million to start to interrupt the cycle of homelessness on the streets of Dublin is not enough. There is a serious shortage of hostel places and people cannot move on from temporary accommodation. A sum of £1 million is not a sufficient allocation to deal with this problem.
Similar to Disraeli's England of the time, two Irelands are emerging. A key issue is what the budget does to begin to deal with that divide which, at a time of plenty, is taking people by surprise. The average person is very saddened by this divide in society which was not dealt with effectively in the budget. I welcome the tax reform measures. The Minister had the money to do what was required in that regard. He is probably the first Minister to have such a golden opportunity and I welcome the fact that he took it. However, the chance to tackle poverty, particularly child poverty, which is developing in society and to give those on long-term social welfare adequate money to ensure they are not excluded from ordinary life was not taken. I regret this statement of values by the Government.
In relation to the lack of real increases in social welfare, the underlying philosophy appears to be that to get people to take jobs in areas with skills shortages, social welfare payments must be kept low. The idea is that this will force people into jobs. This shows a lack of understanding of the needs of the long-term unemployed. The issue of training and education in terms of helping those people, many of whom are caught up in generational unemployment, to move on from long-term unemployment to training and educational schemes and into jobs is not as simple as the budget implies.
The decreases in the unemployment register must be welcomed, but some of the underlying thinking behind the budget does a disservice to those groups. It does not recognise the problems they face in re-entering the jobs market. I refer Members to the report on long-term unemployment prepared by the National Economic and Social Forum which addressed this issue very well. It pointed out the range of initiatives which are needed if people are to move away from long-term dependency on social welfare.
However, this does not deal with the needs of those who are on long-term payments because of illness or disability. There was a moving debate recently on the needs of the physically handicapped. Thousands of people are unable to get out of their homes because of the lack of aids, appropriate day centres and appropriate supports. This is a major problem.
Another area which was completely fudged by the Government was the issue of child care. I hope the debate surrounding child care will serve as a wake up call not only to the Government, but also to the Department of Finance. It was an insult to the expert working group which prepared a report. We should not pull any punches in this regard. The best thinking of the expert group was available to the Government and the Department of Finance, but for some extraordinary reason the Government decided to ignore this issue totally. I agree with Deputy Barnes that this was an insult.
After 25 years of trying to get this issue onto the agenda and numerous reports, Ministers then said that we need to start a debate. Where were they for the past 20 years when one report after another recommended a range of initiatives in this area? Finally an expert working group, which included representatives of all the social partners, brought a realistic plan to the Government, asked for £5 million in seed funding to begin to work out an approach to this issue throughout the country, but the response of the Minister for Finance and others was that we need a debate.
They should wake up, find out the progress of this debate over the years and inform themselves. If the Minister for Finance knew as much about the child care industry as he does about the betting industry and if his understanding of it was at the same level, I guarantee there would have been movement on this issue. This matter involves investing in children and families. Why was a decision not taken in the budget to invest in children? People ask if it is the role of the State to invest in children, but what better place to put investment than the future of children and families? Why fudge the issue?
Approximately £20 million is already spent on child care across ten Departments. The principle of involvement in child care has been established by various Departments. Why did the Government fudge a perfect opportunity when its own expert group made realistic, reasonable and necessary recommendations? Why avoid taking any decision on child care?
The answer is that this issue does not affect male Deputies.
We need to use the current opportunity in the debate on child care to move the issue forward. The Minister of State, Deputy Kitt, understands the situation and has spoken about it previously. He knows the complexities facing families in his constituency who are paying between £500 and £700 a month, which is more than the cost of a mortgage in many cases, for child care. The Minister of State should ensure that the Government begins to address this issue in a realistic way. It is a very serious problem with many dimensions given that there are approximately 150,000 children under the age of nine in some form of paid child care at present.
There is a totally false debate about women in and outside the home. It is outrageous to hear people, primarily men, using the unpaid work of women in the home as an excuse for not doing something for another group. We all want to recognise the unpaid work of women in the home and none more so than women. They have strived to ensure that the work of women in the home becomes visible. However, that should not be used as an excuse not to tackle the real problems all women face.
Up to 30 per cent of women working full-time in the home will avail of some form of child care outside the home. Everybody knows this from our daily experiences. Women who work full-time in the home at one stage of their lives work outside the home at another. Women who have reared families will still need some support at a later stage. The artificial divide put forward is that this matter is very complicated and nothing can be done about it because there is a problem in relation to unpaid work. The problem of unpaid work will not go away in this society or any other for many years. It is a worldwide issue. Unpaid work has always been done by huge numbers of women.
However, the bigger equality issues include what is still happening in terms of the positions of women and men, the lack of women in decision making and the lack of access to child care. I appeal to the Ministers who understand this problem to talk to their colleagues and to ensure this issue moves forward. The recommendations of the expert group should be taken on board so we can begin to adopt a comprehensive approach to this issue.
In the British economy, the Prime Minister, Tony Blair, is beginning to address this issue with some interesting initiatives. We owe no less to children and parents in this economy. Apart from the equity issues involved and the quality of child care, there are economic reasons for addressing this issue. If anything succeeds in moving policy here or elsewhere, it is the economy.
There are skills shortages. There are many women who wish to enter the workforce but cannot because of the lack of supports. Grandmothers are leaving the workforce to look after their grandchildren. Because of inflexibility in the workplace young women are leaving. This is another key issue that must be addressed. Incentives should have been introduced in the budget to deal with that issue. Developing measures to address the crisis in child care should have been an integral part of the budget. Questions must be asked as to why it was completely fudged.
It is likely the number of women in the workplace will grow by 37 per cent by 2011 as a further 218,000 women join or rejoin the workforce. Some 600,000 Irish women are in the workforce. Some 46 per cent of men and women in the workforce have children under the age of four. We have a responsibility to ensure they get supports. The doubling of child benefit for children under five, which was a Fine Gael recommendation, would have gone a long way to giving more income than the paltry increases provided. Up to 30 per cent of women in the home use child care. Let us not have an artificial divide.
There are new registration regulations for child care facilities. There is a problem on the supply side but some minor measures were taken to deal with it. Parents on maternity leave who wish to return to work are stressed in an effort to make child care arrangements. This is a major issue for families. It is very expensive for child care nurseries to comply with the regulations. Yet, they have to comply with them from a quality point of view. In reply to a parliamentary question I tabled two weeks ago, I was informed that there are about 3,000 facilities in the country, very few of which have been inspected. The Minister for Finance must support these nurseries to ensure they are brought up to standard where quality care can be provided. It is very dangerous not to address this issue. I hope the Government will commit itself to a national child care plan over seven years. It should begin to put a package of measures in place to address this issue. If the issue is to be fudged let it not be for the reasons put forward. They are unacceptable at any level.
And insulting.
This is avoidance of a major issue of huge concern to families all over the country. It is a real issue. The proportion of income being paid by families in Ireland on child care is way above the European average. This matter must be prioritised. The budget was a missed opportunity to begin to show a commitment by providing £5 million seed funding. Why was the £5 million seed funding not given since it was recommended by everybody involved in Partnership 2000? What is the philosophical and practical reason for not doing this? It is unacceptable. I hope this issue will be dealt with in the weeks and months ahead.
There is no question but that people are under huge pressure in the Dublin area because of the housing crisis. In my constituency many men and women who have lived in rented accommodation all their lives are being asked to leave and are under enormous pressure to find alternative accommodation. More money should have been allocated to develop sheltered accommodation of various types. Obviously there is huge pressure in Dublin and in other parts of the country. Will the Government introduce more schemes to provide sheltered and co-operative housing to those in this situation? It is a crisis for many people. Social welfare can only do so much in providing a rent supplement. Given the enormous rent increases in the Dublin area this problem will add to the number of homeless and will be very stressful for those involved. Not enough has been done in the area of housing.
On health care, I have already mentioned the needs of the physically handicapped on which we had a debate recently. The waiting list issue is a huge crisis. I welcome the resources provided by the Minister. While the substantial increases provided are welcome they do not deal effectively with hospital waiting lists. In relation to women's health there are long waiting lists for cervical cancer smear tests and mammograms. Not enough money is being put into screening to ensure people have access to quick services. This area needs to be highlighted. Health needs are endless. In an economy that is doing well we have to highlight these areas and show a sensitivity and understanding at a time of budget surplus.
The transport issue remains a serious problem. Not enough money has been allocated in the Dublin area for traffic calming measures. Obviously this allocation comes through local authorities. It is clear the scale of traffic calming measures is much too slow in all areas of Dublin. Extra money should be allocated to the suburbs for traffic calming measures. Traffic calming measures would make a huge difference to the quality of life for people in the Dublin villages, all of which are under severe pressure. Every Dublin TD is conscious of the problem. This is not an impossible problem, there are solutions. Measures can be implemented in residential areas to improve the quality of life on the transport side.
This is a time of great prosperity. Many improvements have been made. In his budget the Minister dealt very well with tax reform.
However a number of areas were missed. I welcome the extra allocations provided. It is the job of the Opposition to point out the gaps and areas where policy should develop. I hope we can continue the debate on these areas in the weeks and months ahead.
In principle the budget was a good one but it has a number of inadequacies. My colleagues, Deputy Fitzgerald and Deputy Barnes, highlighted one such inadequacy, the area of child care. Deputy Fitzgerald made a strong case in relation to this matter. A problem which will cause the slow down of the economy is the shortage of people to take up vacancies in the workforce. There is a shortage of people to take up low paid jobs. This problem will increase unless we succeed in getting more people off unemployment. Some housewives may wish to return to work but it is not financially viable for them to do so. We must encourage such people back into the workforce if we are to keep the economy growing at its current rate.
We must also consider the issue of child care in regard to retraining. The vast majority of women who return to the workforce return to low paid and part-time jobs in catering or other labour intensive industries. It suits them to work part-time while their children are at school as they do not have access to child care facilities. The money they earn is quite minimal when tax is deducted, yet they need it to make ends meet. We must consider retraining women who were in the workforce previously and now wish to return to it. If we are going to provide adult education and training courses for them, we must have the necessary child care back-up facilities. We must address the current skills shortage before it starts to retard our economic growth. As Deputy Fitzgerald pointed out, we must not overlook women who choose to stay at home and look after their families. I urge the Minister and the Government to accept the recommendations of the expert group and implement a national child care plan.
While I have the attention of one of the three wise Ministers from Galway at the Department of Enterprise, Trade and Employment——
We have adopted him in Dublin.
Who does he shout for in the All-Ireland?
That is the acid test.
Deputy Kitt, the Tánaiste and Deputy Treacy travel through County Roscommon when they return home. Unfortunately, they do not leave many jobs there. I hope they will provide the industrial jobs required in Longford and Roscommon and the midland counties in general. The rural economies of Tarmonbarry and Clondra received a huge blow last week with the loss of 180 jobs at Atlantic Mills. These two villages have a combined population of no more than 200 people. The factory floor space measures nine acres. Textile industry closures have also occurred in Donegal and in Kilkenny.
Serious problems are being experienced within the textile industry and I hope the Minister of State and his colleagues ensure replacement employment is created in rural Ireland, not just in Dublin, Cork and Galway. The Atlantic Mills closure resulted from over-production and lack of sales, the same reasons cited for the closure of Fruit of the Loom. Cheaper labour and production costs are available elsewhere which allow these companies to make better profits. We must ensure industry is located in the areas in which closures occur and that retraining is provided as soon as possible. We must also consider the remaining textile industries and ensure the necessary back-up facilities are available to them should anything go wrong. The Tánaiste should maintain close contact with these companies through the IDA and Enterprise Ireland as they are undergoing severe difficulties at the moment.
I hope the Minister for Enterprise, Trade and Employment will ensure additional employment is created and is evenly spread throughout the country. Recently, she announced jobs through Enterprise Ireland but not one of them came to County Roscommon in spite of the fact that one third of the workforce of Atlantic Mills lives in the county. It will be very difficult to find another industry for the area.
Advance factories are available in Longford and Roscommon towns. Several companies have visited the factories but to no avail. The Minister for Finance announced rural tax designation measures in the last budget which could have attracted this badly needed investment. However, the proposals did not go forward to Brussels until last September because the Government wanted to finalise the Dublin docks development and other developments throughout the country.
Investment is badly needed in these rural areas which have suffered severe population decline over the years. It would be advantageous to Dublin constituencies for employment to be created in rural communities as it would reduce pressure on the city's infrastructure. Basic infrastructure is available in rural areas but we do not have the population. Schools are closing because there are fewer young people. I hope the Minister of State will seek to ensure an alternative industry is found for the Atlantic Mills premises, that retraining is provided for the workforce and that funding is put in place immediately. The factory site spans 23 acres on the banks of the River Shannon, nine acres of which are under roof. The closure represents a huge loss to two rural communities which have been badly hit by emigration and migration.
I welcome the £6 increase in the old age pension. However, not every old age pensioner will receive a £6 increase. Adult dependants will only receive a £3 increase. In other words, a husband will receive a £6 increase while his wife only receives £3. Sometimes, she will be lucky to receive even the paltry increase to which she is entitled. I came across a case recently where a husband had given his wife an extra £6 but when he discovered she was only entitled to a £3 increase, he deducted £3. All old age pensioners should receive the same increases in payments. In effect, most of the increase in pension payments goes towards increased rent prices in local authority accommodation. By the time inflation is taken into account, the increases are negligible.
I wish to share time with Deputies Browne, Kirk and Callely.
Is that agreed? Agreed.
I assure Deputy Naughten that the Government is determined to pursue a policy of regionalisation. The Deputy said that whenever Galway plays Mayo or Roscommon I wear the Galway colours but, as Deputy Callely is aware, when it comes to representing our constituencies in Dublin, whether it be in regard to the Luas project, the ring road, schools or employment, we do the job that we have been sent here to do. Many of my constituents in Dublin South come from a rural background.
I will deal with the three areas for which I have responsibility, labour affairs, international trade and consumer affairs. This is the most pro-active budget in the history of the State when it comes to addressing social exclusion, the theme of many contributions. This sends the right signal. From next year no one earning less than £100 a week will pay income tax. This is a clear incentive to move from unemployment to a job. There is now a greater incentive to stay in employment and increase the number of hours worked. The national anti-poverty strategy makes it clear that the best and most effective route out of poverty is a job. The budget is about the empowerment of employees on low and middle incomes. For the socially excluded, it is about opening the gateway to participation and opportunity.
We are exceeding our key labour market goals. We are extremely successful in translating economic growth into jobs. The unemployment rate has fallen to 7.8 per cent and continues to drop. The long-term unemployment rate has fallen dramatically in four years from 9 per cent to 3.9 per cent or 63,500. There is no complacency about these figures. We are determined to reduce the unemployment rate to 5 per cent through reintegrating the long-term unemployed into jobs and preventing drift into long-term unemployment.
A key element of the strategy is the activation programme for the under 25s introduced in September as part of the employment action programme which gives effect to the EU employment guidelines. The programme operated through FÁS and the Department of Social, Community and Family Affairs provides intensive support and guidance for job-seekers with 7,500 FÁS places reserved for referrals. In September 884 persons were referred for supports, of whom 345 or about 40 per cent had signed off by the end of October. Of the persons interviewed by FÁS about 42 per cent were placed in a job or referred to a training programme.
For persons at a remove from the labour market it is not enough to open the door. It is essential to equip them with the skills and experience necessary to match programmes to the needs of job-seekers and employers. That is what we have sought to do in a targeted set of labour market initiatives. The critical factor is that they are targeted and closely linked to the labour market. In this way they should produce good progression into jobs.
Consistent with this approach, five targeted initiatives are being introduced in the programmes operating under the aegis of my Department creating over 8,000 extra active labour market places at a 1999 cost of £13.75 million. More places will be created in subsequent years. A total of 4,800 jobs clubs places are being provided at a 1999 cost of £2.5 million. Jobs clubs are internationally recognised as being an effective and cost-efficient way of helping the unemployed in their job search activity. They are based on the self-help principle and provide a forum in which information on job vacancies is made available and where assistance and coaching in the form of CV preparation, interview skills, printing, copying, telephone services, etc., are made available to the job-seeker.
A total of 1,500 places are being provided in bridging programmes for the long-term unemployed at a 1999 cost of £4.35 million. Evidence suggests that many long-term unemployed persons do not have the skills necessary to participate in specific skills courses direct from the live register. The purpose of this initiative is to bring them up to a level where they can participate in the training programme with the best progression into jobs.
The jobs initiative is being extended by a further 875 places, giving a total of 2,875, at a 1999 gross cost of £4.9 million. The jobs initiative is a targeted programme focused on persons over 35 who have been unemployed for five years.
Two specific programmes are being introduced at a total 1999 cost of £2 million to facilitate lone parents to take up jobs. For the first time FÁS will have a part-time training programme with 800 places for lone parents at a cost of £1.8 million. This is in recognition that lone parents have particular difficulties in accessing the labour market and that flexibility is required. A total of 400 jobs clubs places, in addition to the 4,800 places mentioned, are being provided for lone parents at a 1999 cost of £200,000 in the areas of greatest concentration, Dublin North and Dublin West.
With a view to the roll-out of the activation programme to persons over 25 in 1999 we have secured £500,000 to strengthen staff resources in the FÁS employment service. These are important measures which the budget and the 1999 Estimates have allowed us to introduce.
I acknowledge the crucial role played by social partnership in our economic success. After four national partnership programmes there has been a dramatic turnaround in our fortunes and we now have the fastest growing economy in the developed world. Much of the credit for this is due to the system of social partnership put in place in 1987 and developed since then. I hope a further agreement will be concluded. Progress has been made towards the introduction of a national minimum hourly wage which is but one example of the Government's assault on exclusion and marginalisation.
We are spectacularly successful in attracting foreign investment. We are creating new jobs at a record rate. Further reductions in tax rates, with other reliefs such as widening bands, have been announced. Inflation has been kept low.
With the onset of EMU, increasing globalisation and the adverse consequences of economic slow-down, particularly in Asia, the pressures and competitive forces impacting on the economy are increasing. The continuation of partnership and the negotiation of a new three year national agreement are crucial and central to the Government's social and economic strategy.
The remarkable and sustained growth of the economy has been export led. The pattern remains strong with exports to August up 31 per cent on the same period last year. The trade surplus in August was £1.1 billion, £8.8 billion for the first eight months of the year. This represents a massive increase of over 50 per cent on the same period last year. There is, however, no room for complacency. There is economic upheaval across the globe. With an open economy world events have a significant impact here.
From 1 January Ireland will share a common currency with ten of our neighbours in the European Union. Many have said that in preparing for the introduction of the euro the consumer will lose out. We are determined to be vigilant. I intend to launch a draft national code of practice on dual displays of prices on 18 December. This will require that dual displays of prices be unambiguous, easily identifiable and clearly legible. It will be an important part of my Department's strategy to protect consumers in the change-over process.
The budget has been subject to much criticism.
Although there is always room for improvement — child care and other issues remain to be dealt with — I long for the day when Opposition Members will say that a Government is doing a good job. I commend the Minister on introducing an historic budget in the run-up to the next millennium.
(Wexford): I compliment the Minister for Finance for introducing a caring budget. Business and Finance magazine described it as a left wing budget while last year's budget was described as right wing. If it is a left wing budget I am pleased. It is the Fianna Fáil Party's backbencher's budget because many of the aspects we pressed at our parliamentary party meetings and other fora have come to fruition.
I welcome the increase in the old age pension by £6 per week with an extra £3 per week for an adult dependant. This moves pensioners' entitlements to £100 per week. It is a commitment we made when coming into Government and we will honour it.
I also welcome the changes in the social welfare area. We proposed many of them to the Minister throughout last year. The changes he announced in the budget and to be included in the Social Welfare Bill will be of major benefit to the less well off and the poorer sections in the community. I welcome the extra funding for improved mental handicap services, physical disability, child care and convalescent care for the elderly.
I sympathise with the Minister for Health and Children. Any Minister dealing with the problems in the health service has a major task. I have long held the view — Deputy Callely disagrees with me — that all the health boards should be disbanded and reconstituted. The majority of politicians on health boards take little interest in the running of the boards and they usually leave it to the chief executive officers. I do not include Deputy Callely in this. Cutbacks do not take place at the administrative end, or from the chief executive officer down, rather they are manifest in ward closures or reductions in nursing and medical staff. Administration in the health boards appears to be increasing at an alarming rate and the Minister needs to look seriously at the operations of boards throughout the country.
I welcome the fact that more than 80,000 people on low pay will be taken out of the lower end of the tax net. Those earning £100 per week will not pay tax, which is a welcome development. Over the past ten years the PAYE sector has been crucified. When all of the tough decisions were taken in the late 1980s and early 1990s this sector had to bear the burden of the cutbacks. Now when the country is flush with money it is right that we should reward those who are working. The Minister for Finance is moving fast in that direction, which I welcome.
I also welcome the changes introduced to farming, especially the reintroduction of the on-farm investment schemes and the targeted national scheme of installation aid for young farmers. We promised this prior to the last general election and we are honouring our commitment. I especially welcome the farm assist scheme for low income family farmers. All Members of the House argued for this in recent months. I compliment the Minster for Agriculture and Food, the Minister for Social, Community and Family Affairs and the Minister for Finance for recognising that there is a significant number of small family farmers who are barely surviving and who need the farm assist scheme. I hope it will be introduced as quickly as possible. In his circular the Minister said he hopes to have it implemented by the middle of next year. I hope this will happen early next year.
There are always one or two aspects of a budget that do not fit into place. The gurus in the Department of Finance always include aspects that cause concern to politicians and members of the public. The measures on VRT bands for cars based on their cc is a major mistake. I have discussed the matter with him and with other members of the Cabinet. We should revisit the measure in the Finance Bill.
For too long motorists have been easy prey for successive Governments. We have raised car tax and petrol and now there are to be increases in the VRT. Motorists are already paying huge prices for their cars and pay high petrol prices and road tax. In addition, car insurance charges are way above what is available elsewhere in the EU. VRT is not compatible with EU tax harmonisation, which is being much talked about. Six years ago an Oireachtas committee on EU secondary legislation recommended that VRT should disappear within four years.
The tremendous success of the scrappage scheme will be undermined when new car buyers are penalised by the increase in VRT. The threshold of under 1,400 cc is too low a level at which to make changes. Cars of 1.6 or 1.8 litres include the Ford Mondeo, Mitsubishi Carisma and Honda Civic. These are normal family cars. Families with four or five children need decent sized cars. The Minister should look seriously at this area. Motor dealers and their staff tell me that customers are up in arms and are cancelling orders placed for next January. The Minister should revert to the old system or at least amend the threshold to 2,000 cc or 2,500 cc.
This is an excellent budget. When the Minister made his Budget Statement I cast my mind back to the budgets introduced during difficult economic times in the late 1980s and early 1990s. Most economists would agree the difficult decisions taken then, especially the social partnership arrangements and the models established for subsequent years, which are continuing, established economic stability. This contributed significantly, along with other factors, to the present excellent budgetary position.
A Leas Cheann-Comhairle, you were in Government at a very difficult time when harsh and hard decisions had to be taken. The country faced bankruptcy when a minority Fianna Fáil Government took office in 1987. It made the necessary decisions with courage. When the economic history of that period is written much credit will go to those who took decisions at that time.
Parents and taxpayers had invested substantially in the education and personal development of the many young people who emigrated at that time and there was a serious haemorrhage of natural talent. Many secured worthwhile employment abroad, but a significant number have now returned to participate in the present economic growth and activity.
In addition, the national debt overhung every decision taken by the Minister for Finance. However, with the necessary political resolution those problems have been confronted successfully and I hope we have set the scene for continued economic growth in the years ahead.
This budget is a pay back to all those who have made sacrifices and to those who have followed in their footsteps. It signals continuing significant investment in our education structures. There has been a substantial increase in social welfare payments to those who have retired and to the less well off. The Department of Health and Children, is demanding an increasingly bigger slice of budgetary expenditure, and the budgetary provisions have addressed many of the problems in this area.
Economic growth brings change. The economic growth in recent years has increased the demand for housing stock across the country, particularly along the east coast. There has been a significant increase in the unit cost of housing. That gives rise to a concern that people on a low or middle income will not be able to provide their own accommodation. The Government introduced changes in line with the recommendations of the Bacon report. The rate of increase in house prices has slowed down, but the cost of building land is an inflationary factor underlying problems in that area. Local authorities, particularly those on the east coast and none more so than Louth County Council, are faced with a significant dilemma. The escalation in house prices in Dublin has resulted in an overspill in demand for houses in the neighbouring counties of Louth, Meath, Kildare and Wicklow. The indigenous population of those counties are finding it increasingly difficult to secure building sites at a reasonable cost. It may be necessary to revisit some of the county development plans and to make adjustments. Louth County Council has decided to focus on 42 development centres in the county. That policy objective is admirable, but is it possible to implement it within a five year period, which is the normal timespan for such a plan? There may be a need to introduce flexibility or a provision to review these development plans, if the policy objectives are not being met within, say, a two year period. Such plans must have a policy objective of ensuring that the supply of building land is such that it will not spiral inflation in the price of land which would affect those who wish to build their own houses.
Many of the traditional industries were significant in the economy in County Louth. Its significant mix of rural and urban industrial development was a microcosm of the national economy. Dundalk had a significant footwear industry. The county also had a significant textile industry and many people worked in the agricultural industry, but many modern industries, which require skilled personnel, have taken the place of those traditional industries. I hope those new industries continue to grow.
I disagree with what my colleague, Deputy Browne of Wexford, said about the health boards. I have served on the Eastern Health Board since 1985 and have found the board members, regardless of their party affiliations, very committed to the provision and delivery of health services. Deputy Neville is present and I served with him on the Association of Health Boards of Ireland, on which all eight health boards are represented. The health boards are working well and their board members are dedicated and committed.
I welcome the opportunity to participate in this debate. The budget represents the buoyant economic position Ireland enjoys. The Government is working well and delivering on its promises. As targets are achieved, the Government sets new horizons in the knowledge that the world economy is in a volatile state and that we have a high level of foreign investment. As witnessed this week, our current strengths can be hit at any time.
Acknowledging our large national debt and our underlying financial position, which has greatly improved, the true measures of our public finances are good and we must be cautious. I congratulate the Minister, Deputy McCreevy, on his overall approach to this budget. He took advantage of the current favourable economic and budgetary conditions and indicated that if we wish to continue on this path and avoid painful and disruptive adjustments in future, we must think strategically and prepare for the challenges that lie ahead.
From a taxpayer's point of view, the budget is impressive and significant. For the first time a Government is not only tinkering with the system. The budget provides £581 million in personal tax reliefs and more than 80,000 taxpayers will be removed from the tax net. The number of taxpayers availing of exemptions will increase or marginal reliefs will fall. Tax bands have been increased and individuals will not pay tax on income up to £100 per week. I particularly welcome the move in the right direction in respect of provisions for the elderly, in particular pensions. I welcome the move in tax and social welfare reforms, but I put down the marker that much more could be done in this area. The system is changing, particularly the taxation system as we move towards a system of tax credits. At long last we are on the way to real tax reform. I welcome those moves.
There are some good initiatives in the budget and, as in all budgets, some issues that give rise to concern. Many people, like my wife and I, who have a weekly outgoing on cre che and child minding were hoping for a tax credit allowance. The Minister indicated he was anxious to go down that road. I understand he is awaiting a further report to get a clearer picture of what is needed in this area. In the meantime, a small, but important, step in respect of benefit-in-kind and capital allowance write-offs are positive measures, especially as a means of facilitating and encouraging the supply of child care facilities. I also welcome the benefit-in-kind in respect of the provision by the employers to employees of bus, DART and rail passes valid for a month or more which will not be subject to tax.
Deputy Frances Fitzgerald castigated the Minister for not addressing the problem of homelessness. She was wrong in that. The Minister has doubled from £2 million to £4 million the allocation to local authorities for hostels for the homeless. I particularly welcome the Minister's special allocation of £1 million to address the problem of homelessness in Dublin. This is a serious problem and that allocation will be well spent.
I also welcome the measures to increase the income guidelines for eligibility for a medical card, especially in respect of persons over 70 years of age. For a single person, aged 70 and living alone, in the Eastern Health Board area, the income under the current guidelines is £97, and under the new guidelines, £133; for a single person aged 80 and living alone, the income under the current guidelines is £101, and under the new guidelines is £140; and for a married couple, aged 70 the income under the current guidelines is £144, and under the new guidelines, £199. That shows a significant improvement in respect of those who may qualify for a medical card, particularly those aged 70 and over.
The £21 million pounds additional funding allocated to the provision for community and family support groups and the special allocation of £100,000 for the development of St Vincent de Paul services, are very welcome. However, I am not satisfied that the calculations, as contained in the budget, will stack up.
Under environmental tax issues, the Minister proposes to take a number of positive steps. In respect of VRT, he proposed a three tiered structure applicable from 1 January 1999, which will yield £43 million additional revenue.
In conclusion, I ask the Minister for Finance to modify and amend these calculations. They are incorrect and the industry will prove that. I welcome the fact that since I raised this matter with the parliamentary party yesterday, the Department of Finance has made contact with SIMI to make progress on it. This has been referred to as a green tax. An imported used vehicle of between 1,200 and 1,400 cc can be more damaging to the environment than a new vehicle of between 1,600 and 2,000 cc. The Minister should listen to the industry.
Debate adjourned.