Deputy Browne was in possession.
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 provisions in connection with finance.
–(Minister for the Environment and
Local Government.)
I hope he will attack the budget in the same way as the people from Wexford are attacking it. I also hope he will attack the policies of the Minister, Deputy Harney, in the same way as they are being attacked by the people from Wexford.
(Wexford): The Minister, Deputy Harney is safe enough. She does not need me to defend her from attack. I will refrain from attacking the Minister, Deputy McCreevy. One of the most disheartening sights during the past year was that of people in wheelchairs fighting for their rights on a number of occasions outside the Dáil. It was a sad day when those people had to spend their time in wet and cold weather trying to bring their plight to the attention of Ministers and Deputies. For a long time backbenchers from all sides of the House have made a strong case for addressing the needs of people with disabilities. I have a deep interest in this area as one of my children is confined to a wheelchair. The Minister for Health and Children has recognised that something must be done for these people. The additional investment of approximately £69 million over the next year in services for people with disabilities is to be welcomed.
One matter that must be given serious attention is the provision of personal assistants for people in wheelchairs. The personal assistance service has been funded by FÁS over the past three or four years, but that was a stopgap measure. People who worked as personal assistants for three years or, in some cases, for one year, have had to step aside and the people with disabilities whom they were assisting have had to find other personal assistants. The Minister should make a strong case, through the health boards, for the appointment of personal assistants on a permanent basis to assist people in wheelchairs and not by way of a stopgap measure funded by FÁS. The Minister will have difficulty in achieving that because the health boards are unwieldy and are not serving any great purpose. He should review their operation to ascertain how they can be made more relevant to the people who need the services they provide.
People with disabilities have been neglected for far too long. It is welcome that the Minister for Health and Children will make some changes to address that neglect. An additional £5 million will be allocated for aids and appliances for the physically disabled and a respite care grant to the value of £300 will be given, although that is far too low. The Minister should reconsider the value of this grant because we all know of cases where parents, the mother more often than not, spend their time looking after people with disabilities with little respite care or back-up services. I welcome the introduction of the respite care grant, but the allocation should be more generous.
I welcome the increase of £7 per week for old age pensioners. It is a worthwhile increase but no more than old age pensioners deserve. The Minister for Social, Community and Family Affairs has made a serious effort over the past three years to give substantial increases to old age pensioners thereby ensuring they have a decent standard of living.
I welcome the decision to extend the free schemes to all people aged 75 and over. Members pressured the Minister for some time to introduce such a measure.
A substantial increase in the back to school clothing and footwear allowance will be introduced next year. While I welcome the increase, in some cases where a number of children in a family are attending school the increase may not be sufficient. Perhaps the payment of this allowance should be reconsidered on a sliding scale basis.
Carers have been the group most neglected by Governments down through the years. I welcome the fact that the Minister will extend the free schemes to carers. This will ensure they will be able to gain access to free electricity, free television licence and free telephone rental.
Although unemployment has fallen to 5%, in Wexford unemployment stands at 12%. While 5% may be the national average, some areas of the country have not benefited from the Celtic tiger economy. I draw the attention of the Ministers for Finance and Enterprise, Trade and Employment – I am not going to attack the Minister, Deputy Harney – to the need for selective investment in certain areas. Wexford is one of those areas. Despite major infrastructural developments there during the past five years and it having the port of Rosslare, it has not enjoyed the benefits of the Celtic tiger in terms of job creation. I ask the Ministers concerned to seriously examine this area and to encourage selective investment in the areas where it is required.
While the introduction of a minimum wage of £4.40 on 1 April is to be welcomed, too many companies are trying to find ways around having to pay it. That rate should be increased to at least £5, given the rate of inflation. Many large companies do not intend to introduce the minimum wage until 1 April. They should implement it, and should be encouraged to do so, as quickly as possible and not wait until the legislation governing it is introduced. An earlier speaker said Dunnes Stores, Feargal Quinn's stores and some other companies have introduced a minimum wage, but other companies should not wait until 1 April to introduce it. They should introduce it immediately and stop whingeing about why they cannot afford it.
I welcome the positive features of the budget. The Ministers for Health and Children and Social, Community and Family Affairs fought a good case at Cabinet for the measures in their respective Ministries introduced in the budget. There was a hiccup on tax measures during the past two weeks. I welcome the new found interest of the Unions in their members. As a former shop steward, I consider the unions have not been doing their jobs for the low paid and certain sectors in recent years. It is welcome that Mr. Geraghty, Mr. Cassells and others are beginning to talk about another sector of the community, the low paid. I hope they will be provided for in whatever partnership arrangement is reached in the future. In previous partnership arrangements the less well off and the low paid have been left behind compared to middle income earners who have gained substantial increases. I thank the Ministers for Health and Children and Social, Community and Family Affairs for putting their cases for the increases they secured for their respective Ministries.
I wish to share my time with Deputy Broughan.
Is that agreed? Agreed.
The Deputy could not share time with a better man.
Under the budget, a widow will receive an extra £4 per week. If she lives in my constituency, she will be charged £3 per week to have her refuse collected, an extra £1 per week if she is on differential rent and a further 50p per week if she uses gas. Assuming inflation proceeds at the 3% rate anticipated by the Minister for Finance, the purchasing power of her pension will reduce by approximately £2.50 per week during the next year. Taken together, these represent an overall real income reduction of £7 per week. In other words, the widow will end up being worse off to the tune of £3 per week.
Let us compare her situation with that of a household with an income of £100,000 per annum. That household will gain an extra £70 per week from the budget, an amount which is almost on a par with the widow's pension entitlement and which represents ten times the increase an old age pensioner will receive. How does the Government justify giving so much more to those who have most and giving so little to those who have nothing? Is there not any sense of fairness, equity or compassion informing the Government's budgetary consideration?
Last week, Fianna Fáil backbenchers, scorched by the outrage of their constituents and choreographed by their party's press office, paraded on the plinth demanding changes to the unfair plans to discriminate in taxation terms against stay-at-home spouses.
They were like turkeys trying to abolish Christmas.
At least we were disciplined.
Where are they this week? Leaving aside the inadequacy of the £3,000 buy out announced last week—
Quo vadis?
—where do Fianna Fáil backbenchers stand on the plight of widows? They were very vocal last week about women whose husbands have only one income. Where do they stand on women who are left with neither husband nor income? Do they think it is fair to give these women only £4 per week in a budget which gives so much to the better off? Do they think it is fair that a widow on a non-contributory pension has only £77 per week on which to live, while a wealthy person will obtain that amount and more from additional tax breaks announced in the budget?
The discrimination against single income families was unfair and unjust. It has not been eliminated by last week's buy off. However, that was not the only unfair feature of the budget. The Government's decision to use the State's additional resources to favour the better off to the disadvantage of the poor was shameful. No previous Government ever had such an opportunity to reduce inequality and tackle poverty. The current Administration has turned its back on the poor to favour the rich. It has not offered any social or economic justification for making the rich richer and the poor poorer. There is not any such justification.
We obtained a glimpse of the Government's thinking in the Minister for Finance's speech on budget day. He stated that "We draw our mandate from the will of the people who clearly favoured the Fianna Fáil-Progressive Democrats prescription on taxation at the last general election." The same political argument was repeated by other Ministers in media interviews and it was again put forward earlier this evening by the Tánaiste. What does it mean? In a way it is accurate. There was a clear difference at the last general election between the taxation policy of the outgoing Rainbow Government, which favoured raising tax allowances to favour the lower paid—
And forgot to do so.
—and what the Minister calls the "taxation prescription" of Fianna Fáil and the Progressive Democrats which favoured emphasised reductions in the top rate to favour the better off.
In so far as Fianna Fáil and the Progressive Democrats formed a Government after the election, it can be superficially claimed that there was a mandate to favour the rich. However, apart from the leader writers in the Independent Group, how many voters, even those who voted for Fianna Fáil or the Progressive Democrats, understood that they were voting to rob the poor to pay the rich?
Underlying this political justification for the budget, there is a more fundamental aspect of Government thinking. Put simply, it appears that the Government has concluded that the poor do not vote and, therefore, do not count. If that is the lesson which the Fianna Fáil-Progressive Democrats Government has learned from low turnouts, particularly those in disadvantaged areas, at recent elections, then poor people need to learn a very stark lesson about politics, namely, staying away on polling day means they will get screwed on budget day by a Fianna Fáil-Progressive Democrats Government and if they really want to protect their interests and are serious about building a fairer society the ultimate answer is to vote the current Administration out of office as soon as possible.
The inequality in the budget is not even confined to the skewed benefits for those at different levels of earned income. Some of the biggest benefits in the budget are conferred on unearned speculative income. In his 1997 budget, the Minister for Finance, Deputy McCreevy, caused considerable surprise by reducing capital gains tax from 40% to 20%. There had not been any public demand for such a reduction. No social or economic case was made then or since to justify halving the levels of capital gains tax.
The inflow to the Exchequer justified it.
The Minister of State should allow Deputy Gilmore to proceed without interruption.
That reduction conferred a windfall of enormous proportions on some very rich people.
Hear, hear.
What about the £343 million it yielded?
The extent to which it benefited the rich can be gauged from the Minister's budget speech this year when he informed us, as the Minister of State and Deputy Power have stated, that the yield from capital gains tax in 1999 would be £343 million. The Minister asked the rhetorical question "Need I say more?" However, he did need to say more. He needed to explain that a yield of £343 million from capital gains tax at 20% meant that capital gains in 1999 amounted to £1.715 billion, of which £1.372 billion was completely free of tax, courtesy of the Minister's reduction in capital gains tax in 1997.
On what does the Deputy base those figures?
On the law of diminishing returns.
What an enormous windfall for the rich and propertied in this country.
This year, the Minister has extended this largesse to every—
McSweeney economics.
Deputy Gilmore without interruption
—land speculator in the country and he has done so in a way which belies previously stated Government policy on residential development and housing policy.
In the 1997 budget, the reduction in capital gains tax did not apply to development land. The Bacon report on housing prices argued that, because capital gains tax had been reduced from 40% to 20%, this reduction should apply, as a temporary measure, to the sale of land for housing development. A measure was then introduced to reduce capital gains tax on housing land from 40% to 20% for a period of four years, following which capital gains tax would increase again, not to the original 40% but to 60%. The logic was that a short-term incentive would be applied to landowners to encourage them to release land for residential development. It was made clear that this advantage would apply only to housing land and not to other development land. However, under the current budget, every type of development land is to be included.
When referring to the changes made the 1997 and the recommendations of the Bacon report, the Minister stated:
This now leaves only one type of asset still liable at the 40% rate, that is disposals of development land for non-residential purposes such as for example road-building, or the construction of factories or offices. I have decided, therefore, for simplification reasons to apply the 20% rate to this remaining type of asset in the case of disposals occurring after today.
In addition, where the holders of development land are taxed under the corporation tax or income tax codes instead of the capital gains tax code, the rate of tax that will apply in their case on the sale of land for residential purposes will be reduced to 20%.
How does reducing capital gains tax on land designated for road building or the construction of factories or offices help increase the supply of land for housing?
The answer is obvious.
This question obviously did not dawn on the Minister for the Environment and Local Government or the Minister of State at the Department of the Environment and Local Government who between them issued eight press releases praising the budget on 1 December.
Of course, it was obvious. It was an incentive for disposal.
Both declared: "The introduction of a 20% rate of tax on the sale of residential land for companies and individuals who had been liable for higher rates previously will further encourage the release of land for residential development." Both Ministers were factually wrong. First, the 20% rate of CGT has applied since the Bacon report. Second, the advantage which had been conferred on housing land was wiped out in the budget. It does not matter what type of development the land is sold for as it will only attract a 20% tax.
This measure confers an additional windfall on land speculators who already reap enormous profits from land rezonings, the property boom and the increased price of houses. A developer who, for example, owns agricultural land on the perimeter of a town or city and has it rezoned for any type of development already benefits from a huge increase in the value of the land, but when he sells it for ten or 20 times the price he paid, he will only be liable for a 20% tax. What is the justification for the Government playing Santa Claus to land speculators and property developers? There are currently two tribunals at Dublin Castle where some of Ireland's best lawyers and sharpest journalists are examining which developer made what gain and from whom in the 1980s. Meanwhile, the Minister of Finance has done more in one measure in the budget to line the pockets of developers and land owners than any of those currently under investigation. Who has benefited from the budget?
Everyone.
The people.
They did not even get a packet of Smarties.
Deputy Broughan, without interruption, please.
The PAYE sector.
Certainly not the widow who received only £4 per week, spouses in the home, those on lower or higher pay or double income families.
Who wrote the speech?
The biggest tax cuts in the budget went to the old tried and tested friends of Fianna Fáil, property developers and land speculators.
I am glad that Deputies Power, Ellis and Carey are present as they were among the minority of Fianna Fáil Members who were loyal to the Minister for Finance and did not go out to the plinth. The scenes witnessed over the past week to ten days were the most shameful and amazing in the aftermath of a budget.
Absolutely.
Would the Deputy like some tissues?
A new Budget Statement is necessary after all the changes which have been made, as the leader of the Labour Party said earlier. It remains to be seen whether it should be introduced by a new Minister for Finance. There is a possible candidate in the House.
There are four of them here.
We are not short of talent.
Please allow Deputy Broughan to make his contribution.
Since my undergraduate days, I have always read The Economist. It speculates in its current edition that the economy will be worth approximately $98 billion or 100 billion euros in—
What about Old Moore's Almanac?
It does not make as many mistakes as the Minister for Finance.
The Economist is accurate. That is the background against which the Minister had to work and it is the context in which he announced a total social welfare package of £132 million. It was a disgraceful increase when one considers the funds at his disposal. The tax package of £920 million was similar as the Minister wasted more than £700 million on individualisation and cutting tax rates rather than targeting workers earning less than £175 per week. The upshot is that the budget is effectively defunct and we are not sure what the Finance Bill will contain.
I reiterate that the Government had no mandate following the last general election for a Progressive Democrats-oriented budget, which benefited the top 20% to 30% of the population much more than the bottom 30%, to be brought before the House. The most shameful and disgraceful aspect of the budget was the treatment of the 1.5 million citizens who depend on social welfare given that budget surpluses of more than £17 billion are predicted over the next four years along with a social insurance fund total surplus of almost £600 million during the same period.
While the increases which take effect next May are welcome, they are disgraceful. As Fr. Seán Healy and CORI noted in their excellent and thoughtful review of the budget, Ireland spends less than any other EU country on social solidarity, except Portugal which has a much lower GNP per capita than Ireland. In addition, the share of the budget which the Government allocates to social welfare is declining steeply and now represents less than 8% of GDP, yet that amount provides the income for one third of the population. CORI and Fr. Healy best described the budget as “anti-poor, anti-woman and anti-family”. That is the budget which Fianna Fáil Members must defend on the doorsteps over the coming months.
Does the Deputy expect an early call?
Cement would not hold the Opposition parties together.
The budget must still pass through the House. An increase of £4 per week for social welfare recipients, other than the elderly, is an outrage and is totally shameful. As my party spokesperson on finance, Deputy McDowell, said on budget day, while unemployment assistance has been increased by £7.50, the carer's allowance to £80, the blind person's allowance to £77.50 and the disability allowance to £79.20, they are incredibly low incomes on which to expect people to live.
Following discussions with all the key social welfare interests, the Labour Party set out its stall before the budget. We called for an increase of £6.50 to ensure all families dependent on social welfare reached at least the median income. However, this approach was totally rejected by the Ministers for Finance and Social, Community and Family Affairs. Indeed, we went further in that we would have increased the payments to long-term claimants by at least £10. What is the point in stashing £4 million in a social welfare reserve fund next year when it is known that many people are on the bread line?
I commend the Minister on bringing forward the social welfare increases to 1 May, but both the tax and social welfare years should be synchronised in April. Indeed, the Minister for Finance said in his first Budget Statement that he would base the tax year on the calendar year and it is critical that the social welfare year should be synchronised with that. However, a range of payments will not be made until much later in 2000. For example, the new carer's benefit will not be introduced until November, child benefit is always introduced in September under this Government and the free schemes for carers will not be introduced until October 2000. Deputy O'Keeffe and I discussed the new capital assessment procedures at length with the Minister for Social, Community and Family Affairs, but they will not be in place until October 2000.
The total social welfare package of £400 million is extremely misleading. The reality is that when the increases are introduced during the calendar year, the package is worth £132 million so far. The Minister for Finance and the Taoiseach are talking about an increased package. When that is compared to the £750 million which was misspent on taxation measures and, indeed, the £46 million, which Deputy Gilmore rightly said was wantonly squandered on capital taxation, the amount spent on social welfare is miserable.
Over five Question Times, I have repeatedly asked the Minister, Deputy Dermot Ahern, to address the appalling low rates of dependant allowances. This is currently a disgraceful £43.20 for an adult dependent on long-term payments of unemployment assistance, pre-retirement, farm assist and disability allowances and blind person's pensions. Old age non-contributory pensioners only receive a miserable £44.20 at current rates.
The Government has been repeatedly asked by the Labour Party to address the issue of individualisation of social welfare payments because of its dreadful impact on spouses in the home. However, instead the Government attacked the living standards of dependent spouses of workers through its policy of individualisation of tax bands. This policy was not discussed in the House or at any committee. It was not floated by the Minister and there was not any demand for it except in the fevered minds of Progressive Democrats and the Progressive Democrats dominated Fianna Fáil Party of today.
Combat Poverty, Share the Wealth and a host of recent studies have asked for the dependant allowance rates to be raised to 70% of the main social welfare payment. Yet, the Minister for Finance, Deputy McCreevy, and the Minister for Social, Community and Family Affairs, Deputy Dermot Ahern, are only prepared to do it over three years. This year, thousands of social welfare dependants must make do from next May with the princely rise of £3.80 a week, which brings the unemployment assistance dependant's allowance to a still disgraceful £47 a week.
Since the announcement of this ill-fated budget, carers, who were promised so much by the Fianna Fáil Party, feel cruelly let down. Every member of the Labour Party has been extensively contacted by the carers' organisations, including CROSSCARE and others, who are most unhappy at the lack of progress in this area this year. Less than 14,000 of the estimated minimum 50,000 full-time carers qualify for the carers allowance due to the restrictive means test. More than a week ago at a meeting of the Oireachtas Joint Committee on Family, Community and Social Affairs, of which I am vice-chairman, I was informed by the Minister, Deputy Dermot Ahern's officials that all full-time carers could be funded for approximately £150 million a year. With a budget surplus of £6 million and a 100 billion euro economy, why did the Government not fund all full-time carers? When it was in Opposition, the Fianna Fáil Party said this issue would be dealt with, but after almost three years in Government it has not addressed it. The Labour Party's Deputy Proinsias De Rossa doubled the number of carers who benefit from the carers allowance.
Deputy De Rossa gave £1.80 to poor, innocent pensioners.
The Celtic tiger was only a cub then.
It was a few years ago.
The introduction of the carers benefit, as advocated by me and Deputy Moynihan-Cronin for the past three years, is belatedly welcome. However, why are the conditions for qualifying for the benefit so restrictive? Why does it only last for one year? The Minister told the House that when a person who qualified for the carers benefit ran out of stamps, he or she could qualify for the carers allowance in certain circumstances. However, the conditions appear very restrictive.
The blatant refusal of the Minister for Finance, Deputy McCreevy, and the Minister for Social, Community and Family Affairs to even consider a cost of caring allowance is disgraceful given that caring is not only about income support. It involves many other issues and costs. The £7 increase in contributory pensions is welcome, but the Senior Citizens' Parliament and the other groups representing the retired were expecting their £100 this year and not in May 2001.
They will get much more than that.
The Government has given increases totalling £18 in the past three years.
Live horse and get grass.
It must be remembered that non-contributory seniors will still only receive £85.50 from May while their spouses will receive a pathetic £51.70. The longstanding demand of the Senior Citizens' Parliament and the trade unions' seniors group that contributory and non-contributory pensions should be directly linked to the average industrial wage at 34% and possibly rising to 40% has been totally ignored once again by the Government. However, it will not be ignored when the Labour Party returns to Government.
The Deputy should read out the rest of the Senior Citizens' Parliament's press release.
Deputy Broughan without interruption.
Once again, the Minister forgot the real needs of widows, despite the revised death grant which is welcome. He blatantly refused to concede the £17 million in arrears to widows and seniors which are still owed. Many opinion makers feel these arrears should be paid as soon as possible. The Minister also refused to address the anomaly concerning widows' entitlement to disability benefit. In general, this was a disgraceful budget for social welfare from the author of 'the dirty dozen' cuts in social welfare payments.
While most attention in the budget shambles of last week was focused on the issue of individualisation of tax bands at one level, an equally serious failure by the Minister for Finance was his refusal to use available resources to significantly raise tax allowances to assist the lower paid. Why did the Minister spend, for example, £360 million on reducing rates to fulfil the Progressive Democrats' mantra on tax rates when he was only prepared to spend £202.5 million on increasing personal and married persons allowances? He spent a further £310 million on individualisation but did almost nothing to improve the tax position of people earning less than the proposed minimum wage of £4.40 an hour or £175 a week. A radical budget would use available resources to take most of these workers out of the tax net. However, such a budget would not conform to the failed New Zealand model beloved of the Progressive Democrats and their fellow travellers in the Fianna Fáil Party.
Last week, following the unprecedented revolt by Fianna Fáil Party backbenchers, the Minister, Deputy McCreevy, refused to back down on the socially divisive individualisation of tax bands and introduced instead the £3,000 tax allowance for one income families with spouses at home caring for children under the age of 18, the aged and the handicapped. However, the Minister has embarked on a further divisive and fundamentally unfair policy by separating the tax treatment of one income couples with children from one income couples without children and implicitly castigating families without children. The proposed tax relief at the standard rate is worth only half the tax relief previously granted to two income families in the budget. In addition, the Minister has created a new poverty trap since the new tax allowance is accessible only to families with one spouse working. A further gap has been opened by the Minister between working families and families on social welfare.
A few years ago, the Minister, Deputy McCreevy, and the Attorney General, Mr. McDowell, who were then in Opposition, excoriated what they called whistle blowers. Section 153 of the 1995 Finance Act introduced by my colleague, Deputy Quinn, imposed certain minimal qualifications of honesty on the professional advisers of tax cheats. I have always thought that the Minister persued tax compliance with a heavy heart and it is against this background that I assess his approach to capital taxation. He praised himself because £343 million was collected in capital gains tax in 1999 and said it was vindication of his reduction in the rate of capital gains tax to 20%. However, much of this would have happened in a soaring economy and good tax collection practice.
It is monstrously unfair that people with large resources should pay tax on unearned income at the same rate as a person who earns under £9,000 a year. What was the rationale for reducing the capital gains tax rate from 40% to 20% on the disposal of development land for non-residential purposes? The Minister said the reason was simplicity but I wonder.
On capital acquisitions tax, there is a general welcome for the family home exemption, even under the strict conditions. However, the rationale of abolishing the 30% and 40% rates appears to be mainly motivated by covert pressure from the rich class which the Minister represents. How long have I left, a Leas-Cheann Comhairle?
The Deputy has one minute remaining.
The Deputy will be in Opposition for another two years.
Will Deputy Broughan remind me of the £1.80 Deputy De Rossa gave to pensioners?
Deputy Ross.
I ask Deputies to give Deputy Broughan a chance to conclude.
On capital taxation, a weekly newspaper stated that the CAT changes could also be hugely beneficial to the super rich, including leading business figures who are among Ireland's leading tax exiles. After the budget, those who are tax resident abroad could transfer foreign assets to their children provided the recipients lived abroad. Residence abroad by the donor and the recipient for three years may be all that is needed according to some tax advisers.
What newspaper was that?
It is a newspaper which often strongly supports the Fianna Fail Party.
That is most of them.
The Donegal Democrat.
Deputy Broughan, it is usual to quote a reference.
The newspaper I quoted from was the Sunday Business Post.
That is good.
The budget was socially divisive. It was a budget which divided this House as never before and, sadly, set in sunder the once monolithic Fianna Fáil Party.
I wish to share my time with Deputies Ellis and Pat Carey.
Is that agreed? Agreed.
I hope we will be able to contribute to the debate in our own words rather than resorting to newspapers to fill up the time available to us.
We will help out the Deputy.
No budget has received more publicity since Deputy Bruton failed to bring his budget through the House than the recent one.
This was a non event.
He put it to the country.
And he got his answer.
Hope springs eternal.
It is fair to say that the immediate reaction to the budget which the Minister, Deputy McCreevy, introduced was one of welcome. If Deputies recall news bulletins and so on, most of the organisations—
He never had so much to give away and he scored an own goal.
—and people interviewed immediately after gave a broad welcome to the measures introduced by the Minister, Deputy McCreevy. Even in the House no budget received less attention immediately after it was announced. We had only one vote in the House on the budget.
That did not last long.
That was on the decision to abolish the £5 travel tax that we had put up with for 17 years. The only argument the Opposition had was it wanted it abolished on 1 December rather than four weeks later. That was the only matter that went to a vote on budget night.
What about the increase in cigarettes and tobacco which was effective from the first day?
The Deputies allow other people to point out the failings of the budget and then run with them. The only increase in the budget was 50p on 20 cigarettes, and we had the full support of the House for that measure. Anyone listening to the last two speakers would think it was all negative. They must have had great difficulty in writing their speeches trying to find holes in a budget which has so many wonderful measures. I must repeat the standard rate of income tax has been reduced by 2% and there is a similar reduction in the higher rate.
We commissioned it.
Single persons on the average industrial wage will see their take home pay increase by £20 per week while married couples will have an increase of £40 per week. That would be unheard of four years ago when a different Government was in place. Reference was made to Deputy De Rossa, a former Minister for Social, Community and Family Affairs. It may be just as well he is in Europe because it would be embarrassing for him to come in here and listen to us explain that we have succeeded.
He was the best Minister we ever had, he took care of the carers.
Deputy Power, without interruption, please.
We announced before coming into Government that the old age contributory pension would be increased to £100 per week in the lifetime of this Government. In the last three budgets we succeeded in giving them £18. Next Christmas they will have over £100 per week.
If they do not starve in the meantime.
Where there is a will there is a way.
Live horse and you will get grass.
It has been said that we neglected the poor. Nothing could be further from the truth.
Hear, hear.
The Minister came in for much criticism over individualisation. It is easy to put a label on a Minister or politician, and usually it sticks. If we look back over the Minister's history we will see he has been very effective and has not allowed himself to be dictated to. Instead he puts his own stamp on whatever brief he is given. As one who treats politics seriously, he treats his portfolio very seriously. Mention was made earlier of the dirty dozen. Attempts were made to take the Minister's seat from him, as Deputy Durkan will realise although he was not part of it, but they were unsuccessful. I did not see any great sign by the Rainbow Government of substantial changes to the so-called dirty dozen.
We did.
Allow Deputy Power to make his contribution without interruption, please. The time is limited.
It took a while to round up the dirty dozen.
Likewise, when he introduced changes in capital gains tax and reduced that tax from 40% to 20% in 1997, the take was £132 million. This year the take is expected to be £343 million. I am not surprised at the begrudging attitude of the Labour Members, but I had thought that attitude was changing in Ireland. Will they not give credit where it is due? The Minister produced the figures and explained the reasoning behind the measure, and it has succeeded.
In what?
In raising capital.
It did not put money back into people's pockets.
Read the papers.
The Minister, Deputy McCreevy, has introduced three budgets and we have had the same old story from the Opposition every time: "It is a budget for the rich", and "The Government is looking after the well off". If Deputies look back over the figures they will see that through prudent management the Minister has made extra resources available. That is why the Minister for Health and Children, Deputy Cowen, was able to announce major expenditure for the mentally handicapped.
Nobody discarded the waiting list for hip operations.
The Minister for Education and Science, Deputy Martin, has money for education which no Minister for Education has had previously. We can all identify with and see how well that money is being spent. I realise the Opposition has a job to do. Some people say it is doing so well in Opposition it should stay there. I guarantee it will get at least one more term there. The recent Fine Gael policy proposals on income tax, which were on the front page of the newspapers, would give back a fair share of the resources available to those people whose hard work has contributed more to Ireland's current prosperity and would also increase the number of people available for work. An independent minded person would acknowledge that what the Minister, Deputy McCreevy, tried to do in this budget was exactly what Fine Gael proposed in its document.
Do not copy us.
The Government does not have to take our plan.
We are all aware of the serious labour shortage, particularly in the service industry, and the need to address it. In regard to the 50p increase on 20 cigarettes, Deputy John Bruton suggested on budget night – I do not know from where he gets these brainwaves and policies on occasion – that we spend the profit, which the Government projected would be £132 in a full year, on reducing the cost of AIDS treatment in Africa, not in China or anywhere else.
It is a health issue.
That is where it is most evident.
I would be the first to acknowledge there is a problem in Africa but there are problems all over this country. It is possible the Deputy saw a programme on television the night before and decided to come in with the new Fine Gael policy. I am sure it was not a policy that was approved by the Front Bench. If we are serious about tobacco consumption and the damage it is doing to the health of the nation we will have to introduce a total ban on tobacco advertising. I realise we have some of the most restrictive measures in place in Europe and we have a general prohibition on indirect advertising. We also have restrictions on sponsorship and have capped the amount that can be spent on advertising generally. The tobacco industry is a wealthy one and spends a fortune on advertising. We have sexy advertisements on a regular basis aimed at young people. Given that many of their customers are dying, there is a need to recruit new people. That is the reality. We need a complete ban on tobacco advertising and I have asked the Government to bring it in as quickly as possible.
I turn, briefly, to the racing industry.
Do not ban that industry.
We are fortunate to have a Government that is committed to the racing industry and realise its importance here. It is an industry that has made tremendous progress in the past few years. We have had wonderful developments, prize money has been increased and facilities at the tracks improved. However, the one group that has been forgotten is the stable staff. I appeal to racecourses throughout the country to redress this wrong. The facilities which many of these people have to put up with are disgraceful. In many cases there are no toilet facilities and there is no area in which to change or have a hot snack. They are putting up with conditions which another group would not tolerate. I appeal to the Minister to ensure that all race tracks provide basic facilities for the stable staff.
There is a race meeting at Tramore on New Year's Day. It will be the only race meeting in Europe that day.
There will be racing at Drimoleague on New Year's Day.
There is not a proper structure in place for paying stable staff, but I appeal to racehorse trainers to acknowledge the sacrifice the stable staff are making by attending the races and fulfilling their duties on that day, and to reward them accordingly.
What about giving them the minimum wage?
Their only hope is under our good deal.
Deputies expressed concern in this House for years, about the negative impact of the hearing impairment claims on the Defence Forces. I am happy that a system has finally been devised and that the matter can now be dealt with in a cool and calm atmosphere away from the spotlight.
The Minister for Defence, Deputy Smith, announced major investment in the Defence area, part of which is taking place at present, and it is not before time. In many cases the Defence Forces were working in dilapidated conditions. I am delighted that has finally been acknowledged and an attempt is being made to rectify that situation.
In restructuring the Defence Forces it is vital that all members are kept fully informed of the proposed changes and they do not have to depend on newspapers to discover where lies their future. They deserve better than that. They make a tremendous contribution and they should be treated with dignity in that matter.
Members enjoy putting labels on budgets. A couple of days after the budget was announced they were saying it was anti-this and anti-that.
A Thatcherite budget.
It was a budget for aunties, uncles and everyone else because the truth is a person cannot claim he or she will be worse off. Everyone will benefit as a result of what the Minister, Deputy McCreevy, announced here a fortnight ago. He has a long-term vision. We are lucky to have a Minister for Finance who knows he will be in a position to deliver five budgets – that was his third.
Three this year already.
Unlike previous Ministers, who had to look over their shoulders, we have a Minister who has a long-term plan. I thank him for the effort he has made and look forward to his next two budgets.
Was the Deputy out on the plinth?
Those of us who have been here for some time should all look back, in the context of this budget, at some of the budgets we have witnessed. I remember coming in here to discuss the 1987 budget, which tried only to start to turn around what had been inherited by the Fianna Fáil Government which came into office in that year.
That is rich.
Deputy Durkan will remember it well and so will Deputy Sheehan.
That was 12 years ago when the Celtic tiger was only a cub.
I know Deputy Sheehan has a short memory and he appreciates that I have a long memory at times, but in this case we were in a budgetary position of which none of us could have dreamt in 1987. There is tremendous economic growth. Ireland is the fastest growing economy in Europe. This is something which must be attributed to the actions of Governments over the past 12 years. The Governments have done their utmost to allow the economy to grow as fast as possible, while controlling inflation and all the other problems which can result from fast growing economies.
The current buoyancy in the economy frightens some of us, but when one reads that it is predicted the economy will grow at a rate of between 5% and 6%—
(Interruptions).
No doubt Deputy Sheehan reads all the economic pages of the newspapers, which will have told him this over the past number of years. However, when one reads that it is predicted the economy will grow at a rate of between 5% and 6% over the next three to five years and that the economy will continue to grow at a fast rate for the next ten years, it is important that we should look at how we can best treat that economy and keep it growing. With record numbers of people in employment, these are unprecedented times. In my 20 years in politics, I have not ever seen the rate of unemployment so low. It is at its lowest in memory and it has been so for quite some time.
Because all the farmers have lost the dole.
When that rate was low before, it was because people had been forced to emigrate due to the action of certain Governments. Not only are we able to look after those coming into the labour market on an annual basis, but we are able to make sure that we can deal with the 40,000 who are returning every year.
His party sent them to the cardboard city in London.
These are the 40,000 people who see a better future in Ireland than in some of the other economies which they have helped to build over the past ten or 20 years.
We must pay tribute to some of the people who went long before us. Current growth in the economy is due to the educational measures which were introduced by the late Donogh O'Malley in the 1960s. His policy was not short-term; it was a long-term policy and we will continue to reap the benefits of this top quality education system. We must acknowledge that, and acknowledge those parents in the 1960s or 1970s who made the sacrifices and set about giving their children the education of which they were deprived in many cases.
Recent Government decisions seek to spread the Celtic tiger economy to the Objective One region. My colleagues in the border, midlands and west region and I welcome that the region has been given Objective One status. It gives us an opportunity to catch up with some of the more affluent areas, which have faired better in the past, the areas represented by Deputies Sheehan and Durkan.
I welcome the various social welfare increases in the budget. The £100 pension, of which many people dreamed, is practically a reality and it will be a reality following the next budget.
They are still dreaming of it.
Deputy Durkan presided, as Minister of State at the former Department of Social Welfare, while his then colleague, the then Minister, Deputy De Rossa, was giving old age pensioners £1.80.
Solid performance.
I know it was not Deputy Durkan's wish, but he was not able to do anything to persuade his then socialist colleague to deal with old age pensioners. No doubt if he had the reigns of power at the time, he would have seen to it that they would have been properly looked after.
I welcome the other increases in the social welfare programme. That the increases are being brought forward to May is an improvement. This process will continue until such time as such increases apply from the same date as the other changes.
What about the measure the Minister will not introduce until December 2000?
Deputy Sheehan is a little confused and annoyed, but no doubt the yellow paper he has in front of him is a reflection of the way his party is feeling because it is neither in a 'go' or 'stop' position; it is in limbo.
I welcome the reduction of 2% in both tax bands and the changes to the allowances. I welcome last week's decision by the Minister to deal with the anomaly which arose from his original budget proposals. It is a positive step. It does one thing to which no one has given recognition, that is, it recognises stay-at-home spouses. I welcome the fact that this assistance will be made available for those who care for the elderly, the disabled or their children.
The Deputy should have gone out on to the plinth and not make a half-hearted effort now.
No doubt when Deputy Sheehan issues his budget bulletin, as far as west Cork is concerned, he will be only too glad to welcome the changes of the Minister.
Decentralisation was mentioned in the budget and in the future this will affect the area which I represent. With modern technology one can operate any organisation from any part of this island. The infrastructure which has been put in place will be of benefit. When it comes to making those decisions, I hope the Minister will see fit to look at areas which have suffered as a result of the Northern troubles for the past 30 years. I represent one of those areas which has suffered badly as a result of the Northern troubles. Yesterday's meeting of the North-South Ministerial Council in Armagh was an occasion that many of us had dreamed of but never thought we would see. Let us now reap the benefit of a country that is at peace and whose economy can grow both North and South at an unprecedented level. Let us make sure, however, that future economic growth is divided equally so that disadvantage will not be carried into the next millennium. There is a need to spread the gains of the Celtic tiger right across the country and I have no doubt the Government will endeavour to do that. In so doing, decentralisation can be a major initiative to encourage people to return to rural areas, thus alleviating the housing problems in Dublin.
Earlier in the debate, speakers mentioned capital gains tax which for many years prevented people from disposing of property which could have been used for housing and various industrial development projects. This did not happen, however, because people were not prepared to pay capital gains tax. The budget will do a lot to help continued economic growth and to deal with those who are marginally disadvantaged. It will help to improve the lot of the people of Ireland.
We have had a wide-ranging debate on what is an interesting budget, although the debate on one aspect of it has been myopic. Perhaps that aspect of the debate should have been flagged earlier because many of the budget's many fine measures have been lost sight of. The budget should be seen in context and we should not forget that the national development plan, with an overall investment of £41 billion, was published just a few weeks ago. It indicates the broad strategies the Government proposes to take between now and 2006. On the other side of the budget we have the talks on pay and social partnership which have in the past proved to be an important pointer to the way society wants to progress. As a measure of how the Government sees the direction in which it wants to go, it has committed £485 million to social inclusion, which is £40 million short of what the rainbow coalition committed in its entire period in office.
The first thing to bear in mind about the current period of economic affluence is that it is largely attributable to the good housekeeping policies of Fianna Fáil in Government with the Progressive Democrats. This economic affluence means that gainful employment is now available to most people who are capable of working. The Government's function is to manage the economy which means creating the circumstances that enable citizens to live their lives in comfort. The Government has gone a long way towards achieving that objective.
Through a combination of wages and taxation people have the resources to achieve that comfort and the Government also has the resources to provide services that such an economy requires. The recent budget was the third presented by the present Government. Ten years ago a Fianna Fáil Minister for Finance said that we would replace doom and gloom with boom and bloom.
And he did it.
He certainly gave it new meaning.
Absolutely, and we are only just starting. I would remind the House that it was Fianna Fáil in Government who first invited the social partners to participate in creating economic programmes for the distribution of wealth to benefit all sectors of society. It is a proud record that we will stand over. No one will be looking over our shoulders wondering whether the Minister should be second guessed as to what figures he should put forward as opening positions.
Families must now earn in excess of £40,000 before paying tax at the higher rate, which has been reduced from last year. The lower rate of tax has also been reduced. I expect that very few of my constituents will pay income tax at the higher rate and for that reason alone I commend the budget to the House. It is a far cry from the situation that prevailed only five short years ago when the lower rate of tax was 27%, five points higher than the current budget proposal, and the higher rate was 48%, four points higher than the current budget figure. In addition, families paid tax at the higher rate on taxable earnings of just over £20,000. Looking at the same period, the old age pension, of which we have heard much in this debate, has increased from £71 per week for a single person to £96 per week. I have no doubt that in the course of the next two budgets the old age pension will go far beyond the £100 per week figure which everybody aspires to but thought was impossible. The percentage rate increases in this year's and last year's budgets was 7%, which is three times the rate of inflation and the highest percentage increase in 15 years. During that time, Fine Gael and the Labour Party spent significant periods in office. I welcome the fact that these increases are being brought forward to 1 May 2000. There is a commitment that in next year's budget they will be brought forward to 1 April 2001.
I want to address the issue of low pay. Long before the parade on the plinth started, I raised the question of low pay which is a key issue in constituencies such as mine. Despite the fact that the Celtic tiger is purring, thriving and rampant for many people—
It is never on the plinth.
—there are significant pockets in my constituency where the spectre of unemployment still haunts us. Many people in my constituency have only recently gone back to work. It is imperative that we provide as much inducement, attraction and encouragement to such people to remain in paid employment. For that reason, anyone who is earning less than the minimum wage – whether or not it will be increased from £4.40, and I hope it will – ought to be removed altogether from the tax net. I listened with interest to the Tánaiste's remarks earlier in Private Members' time and I welcomed what she had to say.
One of the social welfare issues I have been raising for a long time is that of pre-1953 pension contributions. I did not hear many Members talking about this issue in the debate. I am glad there is a commitment in the budget to address in the Finance Bill and the Social Welfare Bill that group of elderly people, all of whom started work prior to 1953. It is an injustice that needs to be rectified. The Minister should go the whole hog and implement the measure which would cost in the region of £25 million.
I welcome the budget's improvements in the carer's allowance. As regards the back to school allowance, if one has a large family and is living in Dublin, peer pressures are applied to young people at school, but we should be courageous and try to increase the back to school allowances even more significantly.
The tax relief for the elderly whereby a couple over 66 years of age can have an income of £15,000 before they are liable to tax is an enlightened measure which has been welcomed by Muintir na Tíre. The issue of child care has not been well addressed during the debate. Some £42 million has been committed to the supply side for a variety of initiatives of which people should be reminded. Some £23 million is being made available to expand the equal opportunities child care programme which is working in my constituency and many disadvantaged areas in Dublin and other cities. It is making a difference to women who want to go back to work and people who want to return to training and education.
The £10 million grant scheme for child care service providers catering for up to 20 children is a key measure along with other key initiatives. Anyone who listened to the "Today with Pat Kenny" radio programme this morning, broadcasting from Fatima Mansions, will have heard about the homework clubs. I am delighted a significant figure of about £5 million is being made available so that after school child care activities can be undertaken. When one bears in mind the amount of activity that many schools are now promoting through the home-school liaison service and through interaction with the local community, this sort of initiative is very welcome.
In the area of health, I welcome the disability initiative and compliment the work Carol Canning and others have been doing in that regard. In regard to the suicide prevention initiative, in recent months there have been several suicides of young people in my constituency in Mountjoy and other prisons. I welcome the Minister's initiative, which I hope will be well used. There are many other aspects I could talk about. I commend this extremely good budget to the House.
I wish to share my time with Deputies Sheehan and Gormley.
Is that agreed? Agreed.
One should be happy and joyous at Christmas time, especially after a budget which made available a great deal of loot to be given away. We heard over the past months about the great expectations that were whipped up. Appetites were whetted in all directions. Would it be £1 billion, £1.5 billion or £2 billion? How high was the bid? How was the electorate to be wooed and massaged? I am genuinely sorry for the Government because it has perpetrated on itself the most awful disaster possible, given the present state of our economy.
The Minister, Deputy McCreevy, is a decent and honourable constituency colleague of mine. I have no doubt that the budget is not his work. I do not know who concocted it, but it certainly could not have been the Minister because he knows too much about life.
It was Michael McDowell.
The Minister knows the scene. When he finished his Budget Speech, the Government Members walked out of the House but the Members on this side recognised the problem straight away. I heard a journalist suggesting he was the first person to identify the snags in the budget. He must not have been listening to what was being said here because the snags were identified on this side of the House.
The Government side retreated to have their tea and clap each other on the back. They went away at the weekend full of glory. That once proud group of soldiers of destiny sailed away into the sunset, full of happiness. When they came back the following Tuesday morning and passed the savage seven on the plinth, they recognised that something had gone severely wrong.
What had gone wrong was that, for the first time since 1977, the people's appetites had been whipped up to the extent that the Government could no longer control them. People had been selectively identified and isolated and the spotlight was suddenly placed on them. When they were isolated, they recognised how vulnerable they were. Segments of society suddenly recognised they were under threat. It was fine for some, which is how it always is. Some people will always win, but it should not be the situation that some people will lose.
I cannot understand how the Government was able to produce a budget, the like of which was never seen before in terms of the funds available, which offended so many people in a way which made them really angry. In 1977 the public was told that the outgoing Government was wrong, that it did not have to be that hard, that there was plenty of money and that all that had to be done was to give it out. Everybody has forgotten that that Government abolished motor tax. Every motorist thought that was wonderful and that the previous Government had not being telling the true story. That Government also abolished rates. The theme was to put more money in people's pockets. Within two short years the economy was in tatters. Nobody could have anticipated that.
Margaret Thatcher, in another economy, over a series of years selectively identified segments of the population which were rewarded at the expense of others. Not only did she divide the country socially and economically, she also divided her own party and ensured it was put out of office. It will be very lucky to return to office in our lifetime.
The same economic thesis was being pursued in both cases. Enterprise and industry must be rewarded. However, that must not be done in a way which gives the impression to the people that there is so much to be given away that the Government does not know how to give it.
The Government is now suffering. It is in the unenviable position of being out touting – prostituting itself – and wondering which group of people to which it can give the most to get them off its back. That is a sad situation. I do not know if the Government fully recognises or understands the damage.
I acknowledge that Deputy Power did not go on the plinth to excoriate his colleague. However, criticism from that side of the House of the Opposition is very close to the bone, when one considers one could not walk across the plinth last week without bumping into Government back benchers excoriating their own Minister. They flogged him well and truly to death at every opportunity. There is no point in Members on the other side of the House telling us we are wrong.
Another budget was then produced, although nobody read it into the record of the House. It was touted around the country for two or three days until another group of people were offended by it.
What has happened now is the worst of all. Several groups of people are still deeply offended by the first offer. It reminded me of a reckless group of gamblers going into a casino with their pockets full of money, placing all their money on the first roulette table and then discovering that someone who was not in their group, and whom they did not know, had won the whole pot.
I am genuinely saddened and sorry about what has happened. I am not saying that for party political reasons. Very serious damage has been, and is being done. All the discussions will take place outside the House of Parliament, because no Member of this House will believe any revised budget at this stage.
The legacy of this budget – the greatest opportunity of all time – is not how one would like to remember this millennium. Some wag mentioned here last week that this was an historic budget as it was the budget of the millennium. The candle would not go through the letter boxes and the budget would not go through the lobbies. One morning, even the printer failed and the Order of Business could not be printed. I am saddened—
That is not very inspiring. The Deputy would love to be at the roulette table but he will not be there for many years.
It might not be very inspiring, but at least it roughly sums up the sad situation emanating from the other side of the House at present. I feel sorry for the poor old soldiers of destiny – that once proud party of many electoral promises, some of which it kept – finding that, on their return from the wars, the battlefield of the budget, that they are not so much the soldiers of destiny but the warriors of history.
The Deputy's concern is touching.
That is a sad reflection on that once proud organisation. I do not want to use the time available to my colleagues, but I want to say two or three other things.
The Deputy should say something before he finishes.
I attended an eviction in my constituency a week ago. I do not blame the landlord in this case because he wanted his house back. However, at this time of financial full and plenty, there was no place for that man to go with his three children, except on to the road. With all the hoo-ha we have heard about what was going to happen and the great effort one could expect from the combined thinking of the two parties in Government, that is not the way to commemorate the millennium and the budget.
We have heard a great deal of talk about what was done in regard to social welfare. One of the election promises a couple of years ago was that an old age pensioner would get £100. We have heard this was the greatest giveaway budget of all time, but the same is said of every budget. The Government promised five budgets, each of which was to be an improvement on the previous one. We have already had three budgets this year, one worse than the other, so I hate to think of what the next two will be like.
The Deputy will not be introducing any budgets.
I want to explode the myth we hear every year about the number of people who will be taken out of the tax net. This is achieved by looking at those who are barely in the tax net and measuring up a little. This myth has been perpetrated on the public every year since I became a Member of this House and I hope it does not continue. The budget is a disaster and I hope the Government parties will apologise to the people, say they are mortally sorry for what they attempted to perpetrate on them and call an election.
I am glad to have an opportunity to speak on this motion. The budget was unfair, it lacked vision and squandered the substantial resources available to the Government. It was unfair because it failed to use the small proportion of available resources to eliminate poverty and because it distinguished between the so-called deserving and the undeserving poor. The budget was anti-poor. The Government was faced with a wide range of choices and chose the rich. The budget was skewed towards the better off, giving them substantial gains as against the poor who, once again, were left to collect the crumbs from the Celtic tiger.
This budget was also anti-women because it discriminated against those women who wish to stay at home to look after their families. It was anti-family because it favoured single people and gave few benefits to children and those families in which one parent stays at home to look after children, rather than taking up employment. This was a deeply divisive budget.
The Minister performed a U-turn but did he think he was living in a Middle Eastern country where women are not allowed to vote? He disregarded the voting power of Irish women when he introduced this draconian budget. More resources were available to the Government this year than ever before. It could have used these resources to eliminate poverty, tackle the problems of child poverty and child care and take those on the minimum wage out of the tax net while still having enough money to address issues of disabilities, health care, homelessness and adult illiteracy. The Government could have given everyone with a job the same benefits from the tax changes but chose to give large benefits to the better off. This is a scandalous squandering of resources and is indefensible in the context of the poverty and social exclusion which remain so prevalent. This is an unfortunate beginning to the millennium and leaves many people with no reason to rejoice next January.
This was an accountant's budget which tried to meet the demands of those who see success in budgetary terms as developing a better environment for investment and competitiveness while ignoring the centrality of social inclusion. The budget was blind to the needs of those employed or on low pay, and to those who cannot access well paid jobs because of ill health, poverty or disability. It failed to address major issues in areas such as the environment, rural development and economic and social sustainability. This was a budget which lacked the vision we need if we are to see the emergence of a just, fair and sustainable society in the 21st century.
The old age pension has been increased by only £7 per week or £1 per day, and only £4.70 for qualified adults or 67p per day. A plug of tobacco now costs £7.50, an increase of £1. The budget increased child benefit by £8 per month for the first two children and by £10 per month for subsequent children. Big deal.
Old age pensioners only got £1.49 when the Deputy's party was in Government.
This increase amounts to only 26p per day for the first two children, not enough to buy a small box of smarties. The increase amounts to only 33p per day for subsequent children, not enough to buy—
A big box of smarties.
—a small bar of chocolate. There was a miserable increase of £4 per week for the unemployed and only £3.80 for qualifying adults. The same increase was given to the disabled and the pre-retirement pension. What good is £4 per week? It would buy nothing for these unfortunate people. The winter fuel allowance is only £5 per week which would not buy a bucket of coal for misfortunate people who need heat as much as food to survive.
They must have big buckets in Cork.
The increase in pension and unemployment benefits will not come into effect until May 2000 and increases in child benefit will not come into force until September 2000. The free electricity and television licences and the carer's allowance will not come into force until October 2000. Who does the Minister think he is codding? Why did he introduce a budget in December 1999 when its provisions do not come into effect until October 2000? The special £1,000 grant to widows and widowers with qualifying children will not take effect until December 2000. The next budget will take place in the first week of December 2000, yet these allowances will not take effect until the same week. What is going wrong? The £4 per week increase in the carer's allowance is derisory for people who give full-time care and attention.
When the Minister was tabulating his percentage of gross expenditure he stated that industrial labour will get 3.8%, agriculture will get 3.8%, fisheries and forestry, for which the Minister of State is responsible, will only get 0.4% and tourism 0.3%. This means that these sectors will only receive 8.3% of the gross current expenditure while those under "other expenditure" get 11.7%, one eighth of the total. What does "other expenditure" include? Why does it get 11.7%, or one eighth of gross expenditure, while industrial labour, agriculture, fisheries and forestry and tourism only get 8.3% in total? The Minister should not cod the people of rural Ireland.
No previous Minister for Finance had such a surplus of money to disperse to the underprivileged, yet the Minister blew it to the winds without taking into consideration that he was reining in a wild Celtic tiger which was only a cub when we were in power.
A very unhealthy one.
Its effect could not be seen because it was too young to make its impression felt. The cub has grown to a tiger and the Government has given nothing to the underprivileged. Nothing was provided for hip, knee, eye, ear and throat operations or for a proper machine to deal with cancer cases in Cork University Hospital. What about the West Cork Wheelchair Support Group which cares for unfortunate wheelchair users from Clonakilty to Mizen Head and from Enniskeen to the Jersey Sound? The Minister did not give that group one pound. Who is he codding? Neither he nor any member of the Government should show their faces in my constituency until the damage done by this budget is corrected. The Minister of State, Deputy Byrne, should tell the Minister for Finance to go back to the drawing board and start from scratch.
I thank the Deputies for sharing their time. Historians will write that this Government was one with an embarrassment of riches that quickly became a rich embarrassment. The defining moment of the budget speech came when the Minister for Finance made an unscripted reference to his famous holiday in the south of France, where the Tánaiste also holidayed – she found the remark hilarious and clapped gleefully. This showed the smugness, arrogance, self-satisfaction and complacency of the Government and its contempt for ordinary people. The Minister was saying "Damn you plebs, we will go ahead with this anyway, we do not care, we are radicals". That was the word used constantly – this was a radical budget. It is reminiscent of the Attorney General, Mr. McDowell of the Progressive Democrats who once said that one must become radical or redundant. After this budget, the Minister was nearly redundant.
Clearly he does not understand the true meaning of the word "radical". As I understand it, radical comes from the Latin word, radix, which means root, going back to the root causes of our problems. It does not mean taking the extreme and divisive measures of the budget which were reminiscent of the faux pas made by the Progressive Democrats during the last election when it proposed the redundancy of 25,000 civil servants. This is exactly the same pattern. Those in Fianna Fáil should be wary of their Progressive Democrats colleagues who could be leading them astray. We need to find out who was responsible for this. From what I heard on the plinth last week, Fianna Fáil backbenchers were outraged by what had taken place.
Being radical is about going back to the root causes, not the "greed is good" or Thatcherite philosophy. We must remember what Thatcherism was about. It was not about family, community or society, it was quite the opposite. Margaret Thatcher famously said there is no such thing as society. I hope some members of Fianna Fáil still believe in family, community and society. If one goes back to the root causes, one finds out what constitutes quality of life, another phrase constantly used by the Minister for Finance. He talked about social inclusiveness and quality of life. Clearly, he does not understand what quality of life means. Some of the major thinkers in the Green Party have defined this. They have shown that since the mid-1970s as GDP has increased – Deputy Ellis spoke about our wonderful growth rates – quality of life has decreased. Quality of life was measured by the index of sustainable economic welfare, which takes many factors into account, housing, health, traffic congestion and the environment. This budget did not look at any of these issues. As a consequence of this budget, our housing problems will worsen.
Deputy Carey referred to suicide rates. Why, in this era of the Celtic tiger, are suicide rates increasing? We need to look at why this is happening in an age of affluence. It comes down to what was said by Erich Fromm, the philosopher, "If I am, what I have". If what I have is taken away, what am I? We measure people in terms of their wealth, not as human beings. This budget subscribed to the "greed is good" philosophy. It is exacerbating the difficulties experienced in society. For example, in the area of the health services, why are cancer rates increasing? We know that 80% of cancers are linked to the environment. This budget does nothing to address our severe environmental problems, the fact that the air in this city is getting worse daily and that traffic congestion is increasing. I watched the Minister on "Questions and Answers" last night, speaking about the Glen of the Downs. His solution is to widen roads. That does not improve quality of life and is not about going back to the root causes. It serves to increase the volume of cars on the road which will not improve quality of life.
The budget also widens the gap between rich and poor. The starkest statistic of this budget, as emphasised by Father Seán Healy of the Conference of Religious in Ireland, is that the most prosperous 10% improved in percentage terms at a rate seven times higher than the least prosperous 10% of the population. This statistic remains unaltered by the Minister's latest tinkering of the budget. What should the Minister have done? The Green Party's budget submission outlined a package similar in terms of cost but much better in terms of equity. Recognising the burden that child care costs are placing on couples whose circumstances are forcing both parents to work outside the home, the Green Party proposed the doubling of child benefit, with that becoming liable for tax. For those outside the tax net, the full benefit of a minimum of £450 per child would be gained. Even those taxed at the higher rate would receive a 6% increase on current levels of child benefit. Targeting child benefit in this way would have meant the best use of resources and not the scattergun approach of the Minister.
As regards social welfare, we proposed a 10% increase which would have seen higher payments to pensioners and all social welfare recipients. This would have gone a long way to ensuring that those on the lowest rates of social welfare would have been within striking distance of having an income of at least 50% of the average income. After this budget such recipients are still £10 a week below a 50% average rate. Our proposed tax changes may not have been as generous as the K-Club tendency demonstrated by the Minister. However, our proposals were infinitely more equitable.
The Green Party would have raised personal tax allowances by £800, as opposed to the £500 proposed in the budget. We also proposed a £500 increase in the PAYE allowance, which was ignored by the Minister and which would have been a further incentive for those in double income homes. While we proposed a £1,000 increase in the standard rate allowance, we also proposed a buffer 10% rate on £1,000 of taxable income at an intermediate rate of 33% per cent on another £1,000 of taxable income, before entering the highest tax rate. In accordance with our belief that PRSI is less an insurance fund and more a flat-rate tax, we proposed reductions of £500 million, shared equally between employees and employers. This area was largely ignored by the Minister.
This was a lost opportunity. We could have achieved so much in this budget. We could have moved towards a guaranteed basic income, which is being studied, as the Taoiseach replied at Question Time. So much could have been done and so little was achieved. The Government is in a difficult position because social partnership will break down as a consequence. This is because the Government has encouraged a greedy society. People now see that those who are good friends of Fianna Fáil and of the Government have benefited most. That is not the way in which to run a country or society, that is if the Government believes in society.
I wish to share my time with Deputies Aylward and Conor Lenihan.
I congratulate the Minister and the Departments concerned with the budget. However, because of recent controversies, recent budget proposals for social welfare increases have not received due recognition. I propose to list some of them here tonight. There is an increase of £7 per week in maximum personal rates for pensioners and £11.70 for a couple on contributory pension. This is the highest such increase in the history of the State. I was amused listening to Opposition Members referring to promises made some years ago. I spoke to an old gentleman at the week-end who said that when the old age pension was ten shillings, an inter-party government took one shilling from old age pensioners.
The Deputy frequently makes that statement.
Child benefit will be increased by £8 per child for the first and second child and £10 per child for subsequent children. There is a radical development in the extension of free schemes which will be extended to all those over the age of 75 years regardless of income or household composition from October 2000. This measure is indicative of a caring budget for older people who have contributed so much to the success of society. I remind Deputy Neville that in the not too distant past his party leader went on his two knees to the late Deputy Kemmy following a budget measure which taxed children's shoes.
The Government is afraid to go to the country.
Acting Chairman
The Deputy, without interruption.
I welcome the new widowed parent grant of £1,000. This will be paid to newly widowed persons with children from 1 December. I welcome also the measures introduced for the purpose of supporting carers. These people are the unsung heroes of our society who look after the needs of the elderly and the disabled. For example, 40% of people over 65 years may require long-term care at some point. These new measures are as follows. A social insurance carers benefit, based on PRSI contributions, will be introduced from October 2000. This will allow people to take time off work for caring responsi bilities. It will be payable for up to 12 months at the rate of £88.50 per week. The annual respite care grant will be increased by £100 to £300 from next June. Free electricity and TV licence will be extended to people receiving carer's allowance or caring for people receiving constant attention or prescribed relative's allowance from October 2000.
October is almost the end of the year.
The 13 paid contributions rule for disability benefit will not apply to carers from next April. From September 2000 carers will be able to avail of the back-to-education allowance scheme on ceasing their caring responsibilities. All these measures will improve the position of carers and are an acknowledgment of the huge contribution they make to society.
I am pleased at the elimination of inequality and discrimination and that the full integration of people with disabilities into society has become a priority. I welcome the fact that people claiming half rate disability allowance while living for part of the week in a residential setting will be entitled to the full rate of £77.50 per week from next May.
Half the year will then be over. That would not buy a box of smarties.
I note also the further improvements for people with disabilities in the extension of full allowances to people receiving unemployability supplement and the extension of the back-to-work and back-to-education allowance to invalidity pensioners and people on unemployability supplement from September 2000. These measures indicate a caring Government. It indicates the Minister's concern for the poor and under-privileged in society.
I am not aware of the price of smarties referred to by Deputy Sheehan. I am somewhat at a disadvantage contributing to this debate.
What took the Deputy out to the plinth?
I welcome the budget as presented by the Minister for Finance, Deputy McCreevy. This followed an exciting £40 billion national plan announced by the Minister a short time earlier. Unfortunately the budget has got lost since its announcement in the Dáil. Much of the personal criticism of the Minister has been totally unjustified. Members must accept that Deputy McCreevy is a man of vision and serious determination and resolve. He was man enough to face up to and change some minor mistakes in the budget.
He consigned the Deputies to the plinth.
I am concerned that people rushed to the plinth and the media to get their faces on television. This seems to be the order of the day nowadays. It was unfortunate so many Members took this action, particularly members of my own party. While I appreciate the right of people to free speech, I sometimes cast my mind back to the eighties when we had what could be described as hair shirt budgets. Bankruptcy was facing us and the IMF was waiting in the wings. It was the actions of people like Deputy McCreevy and people in the Fianna Fáil party who took over as a minority Government in 1987 which sowed the seeds of our success today and for which we should be grateful.
The budget has opened up a whole new debate in this country. While one tries to analyse the changes which have taken place in society, I must admit that perhaps the revelations of recent tribunals and matters which have come into the public domain on a constant basis have made people more aware of their rights and concerns. People are aware of and demand their rights nowadays, and rightly so. Ireland has come a long way and politicians such as Deputy McCreevy are responsible for the openness and transparency in society. He has never been afraid to express his views.
I welcome the changes to the budget. I supported the call for recognition of the spouse in the home looking after children, the handicapped and the aged. I have no doubt that the mistakes made in this budget will be corrected in the next two budgets. Ironically, it was easier when the Minister for Finance had very little money to distribute and was looking for money to balance his budget. The same applies to Deputies. I never thought I would say it was easier to be a Deputy during a recession than when things are good. People are very demanding nowadays. They know their rights and they expect instant reaction from their public representatives. Prior to the last election, Fianna Fáil drew up its manifesto based on the family and I hope it will do everything outlined in that manifesto. I look forward to the debate on the partnership agreement under which Fianna Fáil seeks special recognition for the lower paid. I welcome the social welfare package which gives increases to old age pensioners. I commend the Minister for Health and Children, Deputy Cowen, particularly for the better deal he has introduced for people with physical and mental handicap, an issue dear to his heart.
As a party, we must look after the weak and the most vulnerable in our society. I have noticed over the past number of weeks that there are certain people in our society about whom nobody is shouting. I refer to widows, widowers, lone parents, people in receipt of disability allowance and other social welfare recipients who only received an additional £4 per week. I was very disappointed with that. It is not enough. Most of these people live in local authority houses and when they get their increases in the coming months, it will be taken from them by an increase in local authority rent. There is no reason the social welfare increases could not be extended to widows, widowers and other recipients of social welfare benefit. I hope that will be redressed in the Finance Bill.
I have already referred to the increases and additional services in health but I would like to draw the Minister's attention to the provision of orthodontic treatment in my South-Eastern Health Board area, which is totally unsatisfactory.
The Minister has introduced several supports for mentally and physically handicapped people and one of the areas in which improvements could be made is the provision of rural transport. I welcome the improvements in the carer's allowance, an area about which we get a substantial number of representations. Regardless of what we do in that respect, we can never do enough, particularly in cases where full-time care and attention are required.
I was pleased to see recently in the national roads plan that £250 million has been allocated to my own county of Kilkenny for the realignment of the roads in the county. In terms of the national plan, and speaking from experience of working at local level, I sometimes wonder if we have the technical expertise available to us. Do we have contractors ready to carry out the work and the personnel necessary to fully implement the plan? That is something to which we must give careful attention because the current planning process is lengthy. There will be many compulsory acquisitions, roads will have to be designed, etc., and all that involves a great deal of preparation. I am concerned that we do not have the expertise in our local authorities. With the amounts of money being spent, that is something we need to address.
One of my greatest causes of concern in public life is the difficulty with the planning process. The planning process in my own county is archaic. The current volume of planning applications for various developments are processed in the same way as 20 years ago. That is not good enough in a progressive society. I am aware the Final Stages of the Planning and Development Bill will be debated in the House in the new year. That is welcome legislation which needs to be brought to fruition as a matter of urgency.
Water and sewerage infrastructure throughout the country is a priority and I hope the Minister for the Environment and Local Government will publish a plan for every county, from the smallest village to the largest town, because our infrastructure is not capable of dealing with the type of development currently taking place.
In the area of education, the Minister for Education and Science, Deputy Martin, has been one of the most innovative Ministers for a long number of years, and I compliment him on that. I would like to take this opportunity of raising the question of third level grants. Some years ago, I served in the Department of Education with a Labour Minister for Education who abolished third level fees. That has turned out to be a costly mistake. There is no comparison between people living in affluent surroundings in Dublin who are attending university with those in rural Ireland, who may have very small incomes and perhaps a maintenance grant. Those people find it impossible to survive. We have had the same level of grants for the past number of years. A major change is required in this area. I read a report in the newspaper today to the effect that many people refused third level places because they could not afford to attend university, even if they were availing of a maintenance grant, due to the rising cost of rented accommodation in Dublin. That is a terrible reflection on us at a time like this and it is a problem that should be addressed.
I come from a rural constituency where agriculture plays an important role in the incomes of the people in my county. We had a particularly good period in the 1990s when income gain was in excess of 21%, but problems have been experienced in the past three years. While I acknowledge the effort being made by the Minister for Agriculture, Food and Rural Development to improve the lot of agriculture, serious problems remain to be addressed. He has introduced certain measures in the budget, for which I am grateful, but the sheep trade is currently very poor and there has been a significant slump in most of the agricultural enterprises. We must ensure that farm incomes are supplemented. Many people are earning off-farm incomes. We cannot prevent that but the Government, the local authorities and the various State agencies must become aware of the fact that rural development is in serious decline. While I welcome the publication of the White Paper on Rural Development by the Minister of State, Deputy Davern, I have serious concerns about that area.
I mentioned the planning process earlier. It never ceases to amaze me that at Government level, through the Department of Agriculture, Food and Rural Development, we have a fine paper in the White Paper for Rural Development while at the same time local authorities, through the planning process, are ensuring that nobody can get planning permission to live in a rural area. That is difficult to understand. The local authorities are running people out of their own parishes into the town and cities which are already overcrowded. There is traffic congestion, problems with the cost of housing, acquiring sites and other social problems, yet this seems to be the official policy of local authorities throughout the country. That cannot continue.
I want to refer to tourism and sport, matters close to my heart. I am anxious that increased funding would be made available for a recreational facilities scheme. We should provide additional funding and this should be done on a three year basis where clubs and organisations would be able to avail of grants. I am aware of the difficulties in drawing down moneys but a three year plan would certainly improve that.
Overall, this is an excellent budget that unfor tunately got lost in the various controversies which arose over the past number of weeks. People reacted to what they saw was the effect the budget would have on their particular patch rather than the overall scene. Obviously it was a golden opportunity for the Opposition, who had dreaded budget day like never before, and who had to find some reason to knock what was a particularly good budget. They were supported in that approach by certain individuals who went over the top when dealing with the media.
Debate adjourned.