I am delighted to be able to contribute to this debate. Everybody is now agreed that social partnership has made a vital contribution to national economic and social development.
Private Members' Business. - Social Partnership: Motion (Resumed).
The following motion was moved by Deputy John Bruton on Tuesday, 14 December 1999:
"That Dáil Éireann
–noting the contribution which the process of social partnership, involving successive Governments, has made to national economic and social development in recent years;
–conscious of the importance of a successor agreement to Partnership 2000 being negotiated and agreed at the earliest opportunity;
–conscious of the need for the Government's stance in the negotiations to be underpinned by policies based on equity and fairness, respect for all forms of work, paid and unpaid, well paid and less well paid;
–deplores the introduction of suspicion and uncertainty by the Government to the talks process so far; and
–calls on the Government to take the necessary steps to reassure the participants in the talks of its good faith and restore the degree of trust and confidence essential for any negotiations to be successful."
Debate resumed on amendment No. 1:
To delete all words after "That" and substitute the following:
"Dáil Éireann
–noting the contribution which the process of social partnership, involving successive Governments, has made to national economic and social development in recent years;
–conscious of the importance of a successor agreement to Partnership 2000 being negotiated and agreed at the earliest opportunity;
–conscious of the Government's determination to continue to reform the taxation system to ensure that as many low paid workers as possible are taken out of the system altogether, and to remove middle income earners from the top rate of tax; and
–conscious of the Government's decision to introduce a national hourly minimum wage from 1 April 2000,
welcomes the Government's commitment to seek to implement the vision and the strategy outlined in the recent report of the National Economic and Social Council in a realistic and balanced manner through a new social partnership agreement, and supports the Government's efforts to conclude a new agreement with the social partners on that basis.
–(Tánaiste and Minister for Enterprise,
Trade and Employment.)
Joe Murphy did.
I welcome Deputy John Bruton's belated conversion to this cause. Unlike the Deputies opposite, many of whom are recent converts to the value of social partnership, Fianna Fáil laid the basis of social partnership in 1987 and worked to maintain it over the past 12 years. In the coming weeks, we will now work with congress and the other social partners to reach agreement on a new partnership programme in the ongoing talks.
The rest of us will all be left out.
Did the Minister write that?
The future development of social partnership must be seen in the context of a comprehensive framework of policies which we are putting in place. Deputy Carey should not do what he did last night, which was to heckle and try to put off the Tánaiste. I can assure the Deputy that he will not do that with me.
The Minister is a tougher nut, but I am here to assist Deputy Carey tonight.
Deputy Carey is fast becoming the arch heckler in this Chamber.
That is a good title in its own right. Does the Minister mean that he is the Gene Fitzgerald or Mark Killilea of Fine Gael?
I suggest that he should go back to Clare and do that on the local authority, but not in the national Parliament.
The future development of social partnership must be seen in the context of a comprehensive framework of policies which we are putting in place. These include the review of An Action Programme for the Millennium which sets out clear goals to provide the political basis for Government action until we complete our term in 2002, the consolidation of peace and of a new democratic dispensation by the full implementation of the Good Friday Agreement, and the national development plan which provides the resources to radically transform our economic and social infrastructure over the next seven years. The meeting of the North-South Ministerial Council on Monday marked an historic step forward in this process and I am delighted to have been part of it. Taken together, these policies provide us with an unprecedented opportunity to shape our own future.
These vital decisions are not taken in a vacuum. Our approach is based on a coherent and ambitious view of what Ireland can become – a vision recently articulated by the National Economic and Social Council. Among the most important aspects of the council's vision are: economic inclusion based on full employment; social inclusion, reflecting full participation in those activities which constitute the norm in society; and successful and continuing adaptation to change. This vision is shared by all the social partners and Fianna Fáil is wedded to this approach. Making it a reality is the task the Government now faces.
Above all, we must realise the full potential of our people. Social exclusion with its ever present companions of poverty, poor educational achievement, alienation and crime, is the major constraint we must overcome if we are to realise our full potential as a people. The budget introduced by my colleague, the Minister for Finance, will meet these challenges. It will improve living standards for all and invests in social services. It will maintain a strong and stable macro-economic position. It will contribute to the realisation of a socially inclusive and successful society, while supporting sustained competitiveness in a globalised economy.
Our policy will help to ensure continued strong economic growth, with growth in GNP expected to average 5.75% over the next three years. Unemployment is expected to fall to about 4.5% of the labour force by 2002. Alongside the national development plan, this budget provides a further important step towards the delivery of our vision of a new Ireland. The figures demonstrate that current spending has increased by 26% over last year, while capital spending on public and social housing increased by 160% since 1996.
The budget delivers a record social inclusion package of £485 million in a full year, with more than £400 million in the area of social welfare, family and community development. It provides a carefully measured package designed to give a balanced approach across all sections of our community. It takes up again the themes which I have focused on in my first two budgets to date, and which I will continue to focus on in the next two budgets. These are, securing the future for all our older people; improving the living standards of everybody on social welfare; particular support for people with disabilities and carers and supporting families and communities.
The social welfare budget day package of £398 million, together with an additional allocation of £5 million to my Department for child care provision, and a further approximately £15 million for pensions provisions in relation to the pre-1953 issue, in the forthcoming Social Welfare Bill, amounts to a total investment in a full year of more than £418 million – a record social welfare allocation by a very long way. To put the size of this investment in context, the equivalent figures for my previous two budgets were £316 million in 1999 and £225 million in 1998. The 1997 budget introduced by the previous Government was worth some £215 million as opposed to £485 million this coming year.
We have provided an increase of £7 per week, up to 9%, in maximum personal rates for pensioners, and £11.70 for a couple on contributory pensions. I suggest that anyone who dares to criticise that £7 should look across the water where old age pensioners were recently given a 75p rise in the UK budget.
Did the Minister ever read the parable of the talents? –"To those who are given much, a lot is expected".
Deputy Bruton has a very short memory because in the first budget when he was a Minister, he approved the princely sum of £1.80 for old age pensioners on social welfare. This Government has delivered pension increases of £5, £6 and £7, and we will continue in that vein over the following few budgets.
We left the Minister the surplus to divvy out.
Please, Deputy Carey. Allow the Minister to continue without interruption.
Where would the Minister be without the surplus the last Government left him?
The qualified adult allowance will reach 70% of the personal rate over three years.
The Minister should read the future properly.
The previous Government claims some credit for the economic situation, but the reality is that it was Governments led by Fianna Fáil since 1987 that have delivered the benefits to our nation.
Every party was in Government during that period.
I assure Deputy Carey that no matter how much he tries to intimidate me, the fact is that Deputy John Bruton was not a convert to social partnership. He is only a 'Johnny come lately' in that respect. Weekly increases will be paid four weeks earlier at the start of May 2000 and from April in 2001.
The Minister got the surplus and now he is divvying it out.
Deputy Carey, the truth is bitter. That is the reality. We are in the driving seat and the Deputy is over there. He will be there for much longer, I can assure him.
If the Minister addressed his remarks through the chair he might not invite the interruption.
The Minister has no Christmas spirit. He is not generous.
Weekly increases will be paid four—
What about the pensioners who will have to wait until October for their free electricity? 75 year olds will have to wait until next October.
Our record speaks for itself.
75 year olds will have to wait until next October for free electricity.
Deputy Bruton gave pensioners the princely sum of £1.80. He gave a 2.5% increase when inflation was also at 2.5%, so in effect he did not give an increase to the old age pensioners in his first budget. That is his record and we stand on ours.
The Minister should try to peddle that around the housing estates in Dundalk. They will not pay much attention.
We provided a record increase in child benefit of £8 per child for the first and second children, and £10 per child for subsequent children. To support less well off families, we gave a £20 increase in the back-to-school clothing and footwear allowance, something that I think Deputy Richard Bruton would welcome. For carers, we also introduced a new carer's benefit with up to an estimated 6,600 people to benefit over time.
These improvements are an important step forward to building an inclusive society as set out in the NESC vision. We all recognise that more has to be done over time in relation to all aspects of the NESC report. We in Fianna Fáil recognise that social partnership is the way to achieve this objective. As the Taoiseach has made clear, in the context of a new agreement, the Government would be prepared to agree the timetable for moving towards agreed objectives by way of improving the position of those on low incomes through the tax and social welfare systems.
Social partnership has been the engine that has driven the economic and social transformation of Ireland over the past 12 years. The evidence is compelling. During the period 1988 to 1998, the economy has grown by almost 6% a year. Ireland's average growth for the past six years has been the highest of all OECD countries.
Since social partnership was adopted, total employment in the economy has grown by almost 2% per annum– twice the OECD average and six times the EU average. Over the same period, the unemployment rate has fallen from 16% to 5%. On top of all this, living standards increased by more than one third in the 12 years to 1999. All social welfare rates have increased more rapidly than the growth in average industrial earnings. That is what social partnership is about – building a better Ireland for all our people.
The Fianna Fáil Party is a national movement and, like many of the social partners, is a broad church. We gave commitments to the people in our election manifesto, which we intend to deliver on over the lifetime of the Government.
While each social partner brings its own priorities and concerns to the negotiating table, a robust appreciation exists on all sides, of the successes delivered by the partnership model and of the potential to build on that good work. I am confident that, as with previous agreements, a consensus will emerge this time which will see the continuance of social partnership and which will launch the process into the new millennium. The Government will, in the context of moving to a new national agreement, continue to address the social welfare priorities set out by the NESC in a measured and balanced way.
I wish to share my time with the Ministers, Deputies Dempsey and Cowen.
Is that agreed? Agreed.
It is appropriate, as we go from the 20th to the 21st century, to reflect on the enormous transformation which the social partnership process has wrought on our country. Yesterday, and again today, the Opposition has provided us with an opportunity to remind the House that Fianna Fáil was the architect of social partnership. Similarly, Fianna Fáil has nurtured the process since then, yielding many benefits for the people.
It might be useful to take a step back in time to remind the House about the background against which social partnership was crafted. The year was 1987. Inflation had been allowed to rise to about 20% per annum.
Why does the Minister not go back seven years to Mr. Haughey?
The Deputy must allow the Minister to continue.
It was "arise and follow Charlie" then but they do not want to know him now. These are very selective quotations,
The Minister, without interruption.
What was going on when we were being told to tighten our belts?
Wait for it.
Allow the Minister.
The Minister is quoting very selectively.
Time is limited and the Deputies will have an opportunity shortly.
I am sure they will be equally selective.
What was going on when we were being told to tighten our belts?
Unemployment was running at 16%.
Charvet shirts were £250.
Emigration was soaring and personal tax rates were as high as 65%. The London Times reported that the international moneylenders were about to “pull down the shutters”.
Le Monde had excellent advertisements for Charvet.
That is an infantile argument.
I am not talking about—
There was responsible Opposition from Deputy Dukes, as the then Leader of Fine Gael. It was disgraceful.
The five years of coalition was a disgraceful period in Irish politics. I am not talking here about one of the struggling economies of Africa or South America. The country which I have described was Ireland Incorporated 12 years ago, a country which was staring into the abyss. A country—
It was taken over by a great leader.
A few chieftains had a different lifestyle.
The Deputies will get their chance in 15 minutes.
The Minister is misquoting—
The Opposition Deputies are not serious about the debate.
We should bring the Minister to the tribunal.
Could we have less of the jackboot tactics from Fine Gael, a Leas-Cheann Comhairle, so that I can be allowed make my contribution?
They were fond of those jackboots.
The Minister, Deputy Ahern, should allow his colleague to continue without interruption.
The country was staring into the abyss and had just come through the ravages of over four years of Government at the hands of Fine Gael and Labour, a period of economic mismanagement which had no rival either before or since. As is evident tonight, it is a period which the Members on the Opposition benches who served in that Government would like to forget. However, we on this side of the House will not allow them forget the huge damage they inflicted on this country.
The Minister should keep telling us about Charlie.
The people had to pay too great a price for the mismanagement of the mid 1980s for it to be simply swept under the carpet. It was a salutary lesson on how not to run a country.
The 1987 programme for national recovery was a watershed. Its successful negotiation with the social partners reflected the courage and determination of the newly installed Fianna Fáil Government—
Led by who?
—to deal urgently and comprehensively with the economic mess it inherited. Fianna Fáil was again to the fore in negotiating the subsequent Programme for Economic and Social Progress and the Programme for Competitiveness and Work.
A common thread running through all these programmes was the central involvement of the current Taoiseach. His unrivalled negotiating skills played a major part in transforming the days of strike chaos into industrial peace, and in laying the foundations for the creation of unparalleled prosperity out of recession and debt. Our dedication to the social partnership—
What was the name of the Taoiseach at that time?
That is so infantile.
He has been written out of history.
Just like Deputy Lowry.
—arrangements has again been underlined by our approach to Partnership 2000. Although this agreement was concluded under the rainbow Government, when we came into office we lost no time in setting about delivering on the commitments which had been made to the social partners. In the area of social inclusion, for example, we have delivered a combined package worth more than £1 billion in our three budgets so far. For a sharp contrast, one need look no further – as my colleague, Deputy Dermot Ahern, has done – than the Opposition parties and their approach to social partnership.
Who negotiated Partnership 2000?
All of us who were in the House at the time can recall the Leader of Fine Gael being very disturbed by the fact that the social partners could walk into Government Buildings and put forward their case on the range of issues that came within the partnership agreements. Due to a frighteningly poor understanding of the nature and dynamics of social partnership, he seemed to see such arrangements as, in some way, posing a threat to the role of the Dáil.
Against this background, it is interesting to read the apparent concern for the future of social partnership in this Fine Gael motion. When, I wonder, did it have its Road to Damascus conversion to the social partnership gospel? I wonder if it has really bought into the idea or if its motion is only a surface dressing which it applied because it suits it, concealing the anti-social partnership agenda which lurks beneath.
Whatever the truth, the important point is that Fine Gael is not in Government. Therefore, we do not have to worry about the fate of social partnership being in its hands, which is just as well. The fundamental flaws in the analysis underlying its recently published "Vision for Ireland" show that Fine Gael in 1999 is about as clued into reality as it was in the mid 1980s. It is so ill-equipped to address social partnership issues that its lecturing from the Opposition benches brings the concept of "brass neck" to a new plane.
We also hear many pious words on social partnership from the Labour benches. It is a great pity the Labour Party does not practice what it preaches. For example, the area of housing is now accepted as a key component of the partnership discussions. The two current members of the Labour Front Bench who were directly responsible for housing under the rainbow coalition sat on their hands as clear warning signs emerged on house prices. Yet, since they were consigned to the opposite side of the House, they seem to have miraculously found all the solutions. We often hear them talk about the need for more zoned land and social housing and affordable housing. However, when proposals are put forward at local authority level to deal with these issues, it is the left wing councillors, usually led by the Labour Party, who are the first to object. Such hypocrisy is frightening.
The true level of commitment to social partnership of the main Opposition parties is, at the very least, highly questionable. Their record in Government in the mid-1980s is still painfully fresh in the mind. To many it seemed as though they became confused between running the country and ruining it, and their recent performance in Opposition suggests they still cannot tell the difference. On the other hand, Fianna Fáil pioneered social partnership and has remained faithful to it since. We have carefully nurtured social partnership to its current level of sophistication. The electorate can have every confidence in the Government's commitment and capacity to go forward into the new millennium and to develop an even stronger social partnership which spreads the benefit to all our people.
I will quote from my maiden speech in the House during a debate on the Finance Bill, 1987.
Especially since the Minister for Health and Children is afraid to come into the House.
This will underline what I said about the situation in 1987.
Is Deputy Cowen in casualty?
I read a letter which appeared in one of the national newspapers at that time which stated:
I had great interest in the general election, but I wasn't voting, because I wasn't in my own country. I'm living in the USA, and have been since October.
What brought me here? Need brought me here. The need to earn a living. The need to have a better way of life and a better standard of living. The need to be a useful member of society.
Unemployment brought me here. My enforced absence from the Irish workforce lasted four years, and I regard my exile as an escape from the prison of unemployment.
I don't speak on anybody's behalf but my own, though I am sure lots of people share the same sentiments. When historians come to write about the '80s, they'll mention unemployment and emigration, just like what was written in the '50s and the early '60s. Have the thoughts and feelings of any emigrant Irishman or woman ever been recorded?
I'd like my views on politicians, unemployment and emigration to be heard. I regard myself as a rejected and forgotten member of Irish society.
I joined the expanding ranks of the unemployed in September 1982. Later on that year, Garret Fitzgerald's Coalition Government came into office. They were elected with a reputation of untarnishable integrity.
That is true – what a glaring contrast.
The letter continues:
I helped elect one member of that government.
In my home town we used to have one employment exchange. Before I left we had two. One for each of the Coalition TDs who represented us.
Politicians have rarely spoken honestly about unemployment. Oh, they'll mutter the usual phrases: "It's sad and something needs to be done". Their utterances are nothing more than gratuitous concern. Politicians only care about people when it affects their election chances. Our present representatives can't convince people otherwise.
Despite their numbers, the unemployed aren't a strong lobbying force. They aren't privileged and prominent, like many other groups in our society.
What do politicians know about the unemployed? Can they even try to imagine what it's like to be unemployed? Do they know how it feels to face each new day without work? Would they relish the thought of spending years of their lives in idleness? Do they know what it is like to try and exist on parsimonious unemployment assistance? Do they know how it feels to be utterly penniless and in debt? They don't have a mandate to pursue policies that will consign people to long years of unemployment. Nor do they have a moral right to do so.
No TD in Government, or in opposition, can stand innocent. All of them knock on our doors and request our support at election time.
The Deputy's five minutes are up.
That is a pity. I made this contribution on 4 June 1987 and it is worth reading. Since this Government took office, 85,000 people have been taken off the unemployment register. Since 1987, a combination of Fianna Fáil-led Governments and social partnership has improved the figures beyond recognition.
Unemployment is down by one third. That is our record.
I apologise for being a little late as I was contributing to a debate in the Seanad which was running behind schedule. I am delighted to support the Government motion on social partnership. It is interesting, and it would be amusing if it was not so serious, to be lectured on social partnership by Fine Gael which, in that famous coalition Government with the Labour Party between 1982-87, left everyone outside the door and told us all that the great guru, Garret, would sort it all out, but left us on the brink of bankruptcy. It galls Fine Gael that the 1987 Administration, of which you, a Leas-Cheann Comhairle, were an eminent member, showed that the political capacity to deal with the magnitude of the problems facing the country could only be taken on board by a party with the political leverage throughout social partnership to build a consensus which was totally absent as we headed into that Administration. Were it not for the enlightened leadership of a now discarded leader of Fianna Fáil that partnership would have met with limited success, but that is what happens to prophets.
The Deputy should tell us about his leader at the time.
The leader of Fianna Fáil at that time was the author of social partnership with the social partners.
His legacy in the 1980s was a disgrace.
We are here to discuss social partnership and it is sometimes important to acknowledge the contribution people make, even if it is not fashionable to do so. I do so unreservedly. In the run up to negotiations for the renewal of social partnership agreements, difficulties often arose because leverage was being sought by all parties to get their priorities included in the deal. When Partnership 2000 was being negotiated, Democratic Left tabled a motion lamenting the imminent collapse of discussions and calling on the Labour Party, of which they are now eminent members, to pull back on the 1% levy imposed and claiming they wanted social welfare cuts changed before there could be any discussions.
They pulled the rug from under Deputy Quinn.
Deputies Rabbitte and Gilmore were the Labour Party's most virulent opponents at the time. Now, we understand, they are com rades in arms with Deputy Quinn. Social partnership has transformed this country. The ability to do business better is why we have achieved unprecedented success in economic and social terms. I also acknowledge the vision and leadership shown by the trade union movement as a corporate entity. It has discarded the old adversarial ways which sought to restrict the influence of labour to wages and conditions. In so doing, it has recognised the social and economic advantage for its membership and their families, and for those political constituencies it seeks to represent – the unemployed and socially excluded – have been achieved under successive social partnership agreements under successive Administrations. Let this be the context in which the negotiations are resumed and I am confident that everyone will recognise this as the big picture. The maintenance of competitiveness is fundamental to ensuring our economic progress is sustained. This Government is committed to ensuring the socially excluded are part of the economic improvement and we now have the resources to meet, agree our priorities and proceed together, as we have done in the past, to the benefit of all.
I propose to share my time with Deputies Jim O'Keeffe, Clune, Cosgrave and Caoimhghin Ó Caoláin.
Is that agreed? Agreed.
I welcome the contribution of the Minister of Health and Children, Deputy Cowen. The shallowness of the contribution of the Minister for the Environment and Local Government, Deputy Dempsey, shocked me. I have soldiered with him in Meath but it was amazing to hear someone so trapped in a time warp who can see no one in step but his Johnny. Fortunately, probably no one was watching but the public would think he does not have the substance to be a Minister. His contribution was shocking.
I believe in social partnership and nothing the Government says will shake that belief. However, when the Minister for Finance rose on 1 December, one month away from the new millennium, it was an unprecedented opportunity. When he sat down barely an hour later he had sown the seeds which have almost derailed social partnership. We should not fool ourselves – the Minister squandered a huge opportunity. As the Minister for Social, Community and Family Affairs said, the NESC report outlined the basis for social partnership which underpins social and economic policy. This included the development of a negotiated consensus on key economic and social issues. What happened to this? No one was consulted. We have heard that several Ministers, probably including the Minister for Health and Children, did not know what was going to happen. The NESC recommended the development of a policy framework which generates social inclusion in tandem with economic success. This was not evident in the extra £4 given to the unemployed and the £50 given to double income couples.
The NESC also suggested that tax reform must be used to promote social cohesion. It set out key policy priorities and attached a high priority to increasing the standard rate of personal allowance as the most effective way to help the low paid. It favoured an increase in child benefit which would be neutral in respect to child care choice and the labour market position. It supported the introduction of new types of family leave which would enable employees to balance work and home responsibilities. The NESC had a vision although not the type of vision which was behind the budget which envisioned a scramble for money and the creation of traps in the tax code which will force people into work.
The NESC report was a consensus. It recommended that tax benefit should be concentrated on the low paid, that substantial increases should be made to support children, and that the workplace should accommodate the balancing of home and work responsibilities. The Minister kicked over the traces of all those principles of social partnership in his search for glory. He used tax policy to damage social cohesion – as we heard angry people say daily on the airwaves – and divide families. He abandoned negotiated consensus for developing positions on taxation. This provision was not suggested by trade unions, employers or any of the third strand – none of them were consulted. The Minister did the opposite and inverted the tax priorities which were agreed by the Government, employers and trade unions. He provided trivial support to children. This unresolved issue is of great importance and it will return to haunt us.
It is startling how quickly this Government has lost touch with the reality facing families. The Government decided to concentrate its tax concessions on those earning £30,000 and more – these benefits reach a maximum of £50 per week for an income of £50,000. This formula was designed by the Government – at least by the Taoiseach, the Tánaiste and the Minister for Finance as other Ministers seem to be trying to distance themselves from it. Do Ministers know the average industrial wage? Do they know what a woman working in industry earns? Less than £12,000 – that is the average industrial wage. Such women were given £5 a week in this budget. That was the concession of the Celtic tiger economy to those who have been the backbone of social partnership which has brought us this far.
A woman who is a dependent spouse on her husband's unemployment assistance was given £3.80, bringing the total allowance to a princely sum of £47 a week.
What about those on a minimum wage? The tax paid by someone on a minimum wage will be £17 next year – 10% of what was to be a subsistence wage. The Taoiseach boasts about how won derful this idea is. It is no wonder this budget made the public angry and that SIPTU was the first of other organisations to pull out of social partnership. It was provoked beyond what it could bear by this budget. This was no accident. By failing to address the issue of low pay, we are creating problems. In crude economic terms, the low paid will look to their employers for what they did not get in the budget. There will be huge pressure in industries such as textile and clothing where average wages are barely ahead of the minimum wage. The formula of social partnership – giving tax cuts instead of giving in to high pay demands – has been dispensed with as far as the low paid are concerned.
The Taoiseach sought to defend his actions by quoting the ESRI. I have not ever seen such a blatant example of the devil quoting scripture. The ESRI had the last laugh when it demonstrated its recommendations were in the context of recognising women in the home and substantial increases in child benefit. It also illustrated that the 20% of the population who earn the least gained less than 1% while those earning the most gained 4% on an already better income.
Budgets are about values. The values which underpinned this budget had nothing to do with social cohesion. It was a misjudged attempt to feed the Celtic tiger. It badly misfired because it was not thought through and there was no negotiated consensus. It deliberately kicked over the traces of social partnership. Organisations such as CORI, which is one of the pillars of social partnership, have excoriated this budget, which is not surprising.
This budget should have provided a framework whereby people, particularly woman, could make choices. It did not do that and instead it traps people into making choices which makes it more difficult for them to balance home and work responsibilities. For a mother at the low end of the income scale, the decision to take up work will carry an extra penalty of unrelieved child care costs, the loss of the £3,000 allowance and none of the other benefits. No thought was given to double income couples at the lower end of the scale. At higher income levels the decision to give up work will carry an extra penalty of the loss of £28,000 in the tax band. This is unbelievable. The State should have tried to facilitate and encourage employers, trade unions and workers to create a workplace which allows flexibility. It should not have used the tax code to trap people into making choices.
As far as families are concerned, the principles underpinning this Budget are totally wrong. They suggest that caring for children full-time in the home is a luxury that should be taxed. That is at the heart of this budget. They suggest that working and paying for child care is consumption and should not be relieved by tax concessions or child benefit. Some of my constituents are paying £90 a week for child care and they were given £2 a week in tax relief. It is ridiculous.
The decision of a single parent to live with his or her partner will carry a tax penalty of £40 per week and for many the loss of the one parent family allowance. We are setting up a code to drive people apart instead of creating a tax and welfare code to support stable families. The Minister is making decisions on the importance of children without regard to any form of partnership. Married women have lost out and they are angry about their position. There was a unique opportunity to resolve this in the budget. Instead the Minister set family against family. This is the tragedy and the memory the budget will leave behind.
The Government has shot itself in the foot and virtually torpedoed the prospect of a successor to Partnership 2000. During my time as a lawyer and politician, I believed that any negotiations to be successful require trust and confidence in the participants. The Government has shattered this trust and confidence by its incompetent mismanagement of the budget. Trust and confidence in the Government has been destroyed on virtually every conceivable front.
In my budget speech I referred to Article 41 of the Constitution dealing with the rights of the family. Even with the proposed changes to the Budget Statement, at a minimum there is a major question mark over Article 41 of the Constitution. At the very least, there is a constitutional uncertainty – the Supreme Court will decide on this one way or the other – arising from the budget which seriously undermines the foundations on which any agreement will be built.
There is further uncertainty as to the terms of the budget. I deal with the social affairs brief and, frankly, I do not know what the social welfare provisions are at this stage. I hear leaks and rumours about an additional £125 million. I am not sure whether this is true. Perhaps the Minister for Finance will confirm whether there will be an additional £125 million and if this is for the year 2000 or on a full year basis. As opposition spokesperson in this area, I would be interested to receive some clarification, because there is only uncertainty. Social affairs normally deals with people on the margins of society who are unemployed, on pension or disabled. I hear that the £125 million has something to do with the low paid. Is this concentrated on the family income supplement? All we have is uncertainty.
It is not clear if there will be a further package for the low paid. I am not aware of what the Taoiseach committed in a letter to congress today. Again there is further uncertainty. The major issue for the Government is its display of a combination of political misjudgment and muddled mismanagement. This is compounded by a series of climb downs coupled with devious tactics involving its own backbenchers and Independents. The net result is that we are entering hugely important negotiations on behalf of the country and we are being represented by a Government on which no one can rely. Any Government would have to convince the social partners of its bona fides in any serious negotiations. There is now a real danger that these social partners will be reluctant to conclude any agreements with such an unreliable negotiating partner. Already, there is evidence of a reluctance to even begin negotiations. The ending of the first crisis today may, I hope, be confirmed tomorrow by SIPTU. This is just lurching from one crisis to another.
I listened earlier to the rubbish emanating from the Minister for the Environment and Local Government when he was revising history. He carefully omitted the input of his former leader, Mr. Haughey, to the politics of the eighties. Let us be fair to the Minister for Health and Children, he at least had the grace to refer to him. He referred to Fine Gael's leader in the late eighties, Deputy Dukes, and his contribution. Let us be clear, all parties in this House have seen the enormous economic success over the past decade which has been largely attributable to a series of national agreements. I am concerned that in one fell swoop this Government has put in jeopardy our future economic growth path. This could have serious consequences for the country. In these circumstances, the Government should consider whether it has outlived its usefulness. From the vast Exchequer resources, its treatment of the low paid and the ‘no paid' has been unforgivable. What hope is there for the vindication of the rights of the socially excluded in any new agreement negotiated by the Government? On the basis of the Government's track record and of the previous history of the Minister for Finance, there is little likelihood of the Government being able to conclude an agreement. Even if it manages to cobble something together, it will have little credibility among those who are marginalised in society. Paragraph 1.11 of Partnership 2000 reads:
Facing the challenge of the 21st Century also requires a new focus on equality, which implies the adoption of a strategic approach.for the full integration of women and of people with disabilities, Travellers and other groups experiencing discrimination. It includes the promotion of access, participation and outcomes for all marginalised groups in our society.
What has the Government done to promote access, participation and outcomes for the marginalised groups in our society? It has ignored and paid lip service to them. It has given them platitudes. In relation to carers and people with disabilities, this budget has deigned to offer them the crumbs from the rich man's table. The Government's actions speak louder than words. The reaction to the budget by those who in the context of social partnership represent the marginalised and the socially excluded has ranged from lukewarm to downright condemnatory. CORI described the budget in the following terms:
Budget 2000 was unfair, lacked vision and squandered the substantial resources which were available to the Government.. This is a scandalous squandering of resources and is indefensible in the context of the poverty and social exclusion that is so prevalent throughout the country.
One of the voluntary groups representing the interests of carers said to me that Deputy McCreevy should no longer be Minister for Finance but Minister for Poverty, because that is what he is promoting for many people in society. The reaction of many of the voluntary groups of people with disabilities and their advocates and carers has been one of quiet resignation as they face into another year of broken promises. In the meantime, those who were promised much and received little, will continue to live lives of quiet desperation. How can people have confidence in this Government and Minister for Finance who last year favoured the needs of racing punters over those of carers? How can people have confidence that this Government will successfully negotiate a partnership agreement which will provide for a more egalitarian society? In the first edition of this year's budget, this Government has given an additional £77 per week to couples earning £100,000 per year. The contrast is £7.80 per week to couples surviving on disability assistance. The Government is not even ashamed of this. The employee pillar of the partnership is doubtful. I hope it will get into negotiations. The social and voluntary pillar of the partnership is already crumbling. The Taoiseach and the Minister for Finance by their actions may yet bring the House down around our ears.
It is only through social partnership that the rights of the marginalised and excluded will be vindicated. It would be unforgivable if the Government were to fail to conclude an equitable, meaningful and credible agreement. Given the posturing, equivocation and the sleight of hand practised by the Government, I fear it fails to inspire confidence in the social partners. The damage done may not be fully repaired – at least until there is a change of Government.
This day two weeks ago, the Minister for Finance introduced a budget. There was a budget follow-up last week. On the News tonight, Des Geraghty said that changes will be introduced in the Finance and Social Welfare Bills. I am pleased to hear this. I hope this will bring employees on board because they threatened to withdraw from the social partnership and the next round of talks with the Government.
It is unfortunate that we had to hear about these matters from a news programme. The leaks and the reaction in the media are unfortunate also. As we debate this motion tonight we still do not know what he was talking about in terms of the proposed changes, or what the Taoiseach has promised congress. I hope there will be some move forward in an attempt to patch up a budget that has been divisive and which has undermined partnership. People now realise that if they feel strongly about an issue in the budget, they can threaten to object to it and walk out of talks, and then the Minister will change the budget as he sees fit.
This budget has undermined partnership. Partnership is about workers, spouses, those on welfare payments, people with disabilities and many other aspects of our society, and SIPTU is right to speak out about those they represent. IBEC and the economists will have their view, but politics is about representing all of the people all of the time and giving everybody a fair share. It is not just about representing one sector over another, which we saw in Budget 2000.
This budget has been divisive in terms of the contribution of women who work in the home. We all heard the reaction to that issue over the past two weeks, and I read an article which stated that there may be a challenge to the budget because it threatens the family as enshrined in the Constitution. Women make up 75% of those who are paid below the minimum wage. I have received correspondence from the INOU to the effect that the £3,000 additional tax free allowance announced last week by the Minister will discourage women from taking up low paid employment. A total of 19,700 women work between one and nine hours per week, while 61,500 work between ten and 19 hours per week in part-time, low paid jobs as cleaners in supermarkets and restaurants. Women who take up such low paid employment will lose the £3,000 additional tax free allowance announced last week. The implications of this measure have not been thought through. We are now lurching from crisis to crisis. There is no concept of what these changes will mean.
Social partnership is necessary. The National Economic and Social Council commended the previous partnership process. Improved competitiveness in conjunction with favourable external economic development has played a crucial role in converting strong economic growth into the remarkable job gains achieved in recent years. It has helped to deliver industrial peace and moderate pay settlements.
Partnership 2000 was negotiated by a Fine Gael led Government and it has worked well. It worked well because it included everybody and it had the confidence of all those involved in the partnership. I suspect that partnership has been undermined.
I would remind the Deputy that there are six minutes remaining in the slot. I understand there are two Deputies sharing.
I hope what the Minister has proposed will bring the employees on board. I hope that further talks take place and that we will have a further element in partnership.
Success generally comes when all players act as a team, each recognising that they have a contribution to make to the overall benefit of the common objective. So, too, has success come to modern Ireland when it realised that every sector counts, that the era of each for themselves was over and had no place in the Ireland of today. Employers worked with employees, supported by Government policy, taking account of those who were not in the employment market and those self-employed or involved in agriculture.
That common embracing partnership was, and still can be, a recipe for success today but that team spirit is under attack by the Minister for Finance who, by his work and the budget, has created the basis of division and social disadvantage as he stokes the fires of greed. There is no need for any Minister to go down this road. By simply applying the current formula, taking account of the needs of the labour market while ensuring that the low paid were removed from the unacceptable position where those earning less than £6,000 per year are dragged into the payment of income tax, it was possible to build and strengthen social harmony and partnership.
This country needs to find a balance. It is important that all are encouraged and enabled to benefit from the prosperity of the nation. It is not in the interest of partnership that Government sets one married couple against another, or that it enhances the spending power of one sector while not recognising the needs of the other. Government policy is such as to be the cause of social division when it is well recognised that we need social partnership to make Ireland flower. It is important that every factor in the equation is treated fairly, that all are given the opportunity to partake of the benefits which flow from any partnership agreement. Partnership is about winning. It is not about conferring some additional advantage on a particular sector.
While it is important that we ensure that companies and investors make a profit, it is also important that those in employment benefit. The withdrawal of SIPTU, the largest trade union, from the partnership table due to the unfair nature of the Government's adjusted playing pitch requires immediate measures. We cannot allow the partnership of recent years to unravel, rather we must work to maximise the cohesion, ensuring that all players are eager to continue working together.
The extraordinary events surrounding Budget 2000 will surely go down in history as the revolt of the backbench turkeys.
Dying swans.
For the Fianna Fáil backbenchers to have voted for the disastrous budget, as presented by Deputy McCreevy on 1 December, would have been like turkeys voting for Christmas. The Government believes it has now saved its Deputies from what I would regard as a seasonal roasting, but if it has done so it has also exposed its own total lack of commitment to real social inclusion and taxation justice.
With specific reference to the motion before the House, Sinn Féin, in our pre-budget submission, pointed out that the series of agreements between Governments, trade union leaderships, farming organisations and employers – I am glad that amused the Minister – have operated to the disadvantage of most workers. The ability of the labour force to mobilise its strength was thwarted, and the wages of many workers were kept artificially low. However, given that the majority of trade unions have voted to enter the negotiations, it is vital that the balance is now redressed. There must be real pay increases which benefit low paid workers most of all, and any new agreement must make the elimination of poverty its first priority. Budget 2000 was a test of the Government's willingness to deliver on that priority. It failed abysmally and it now faces that test again in the reconvened negotiations.
I will support the motion before the House, although I do not share the Fine Gael Party's interpretation of social partnership. We in Sinn Féin seek a real social partnership where the wealth of this nation is distributed according to need, and certainly not to greed. This Government has shown it has no intention of adopting such principles and deserves the censure of all in this House for squandering what was the best opportunity for any Government to eliminate poverty in our society.
SIPTU has pulled out of the talks and commentators are now claiming credit for having seen the flaws in the budget. The first person to see the flaws was our finance spokesman, Deputy Noonan, who replied immediately to the budget. Make no mistake, the lower paid are suffering under this budget. The Minister has raised the limit before which low paid workers come into the tax net to just £110 and the budget is three times more beneficial to high wage earners than it is to low wage earners. Fine Gael proposed an income limit of £170 per week before a worker entered the tax net, but when the Minister introduced this budget, he saw an economy rather than a budget – that was his major mistake. He defended the budget bravely until the weekend, saying he was not in favour of turning. However, when his backbenchers came back from their constituencies they went onto the plinth, led by Deputy Roche, a frequent user of that location, and the Minister saw the light, or someone saw it on his behalf. The most hardened Opposition politician could not help but feel sorry for the Minister, who was forced to see he was in favour of turning.
Well said.
The successes achieved by this country over the period of the four national programmes are well known to all Members. Those in employment, those seeking work and those relying on the State for assistance have all gained from social partnership. Our record speaks for itself. Those at work have received significant increases in their take-home pay. The increases in real income have been particularly high over the period of Partnership 2000 – some 15%, compared with about 5% during each of the first three programmes, the Programme for National Recovery, the PESP and the PCW.
Since 1993 we have seen a 25% increase in the number of people at work in Ireland and a fall in our unemployment rate from about 15.5% to just over 5%. We now have net immigration, whereas not so long ago thousands of our young people had to emigrate to find work. Employment creation remains the most effective route out of poverty. Progress made in that regard has transformed the poverty position during the recent years of social partnership. There has also been significantly increased spending on social inclusion measures and public services to the benefit of all citizens.
It was only by turning away from the old approach of non-competitive and inflation-creating income increases that scope emerged for employment gains. In addition, pay moderation allied to employment growth enabled tax reform which produced still stronger gains in take-home pay for all. It is this interdependence between different groups in society and this interaction between different elements of public policy that is at the heart of social partnership and at the root of the improved living standards delivered over recent years.
Hear, hear.
Earlier this month I brought in a budget which contained the biggest tax and social welfare package in the history of the State at £1.5 billion. Although most of the focus has been on the tax element, this budget also increased all old age and related pensions by £7 per week and all other personal rates by £4 per week; gave the biggest increase ever in child benefit of £8 per month for the first and second child and £10 per month for the third child and subsequent children; increased the qualified adult allowance and brought in a new insurance-based carers benefit; increased health, mental handicap and education spending substantially; and launched a major programme of grants and assistance to increase the supply of child care places.
The House will be aware of the Government's decision to introduce a national hourly minimum wage from 1 April 2000, a measure which will clearly assist with and have a positive effect on the alleviation of poverty. Last year the Government standard-rated the basic personal allowances and made them of equal value to all tax payers. The Government did this because we thought it fair and proper. It allowed us to target resources on the lower paid. Under my three budgets I will have removed more than 175,000 persons from the tax net, nearly five times the number so removed in the three budgets prior to that. Our commitment to easing the burden on the low paid is shown in what we have done already in this regard. The move to standard rating and the subsequent increase in personal allowances in the 1999 budget was acknowledged in the NESC strategy report as a key mechanism for delivering tax reductions to the lower paid.
One consequence of the tax credit policy move, however, is that personal allowances no longer act to keep taxpayers off the top rate of tax. The only way to get the numbers on the top tax rate down is to widen the standard rate tax band. This reality was also accepted in the recent NESC report, which identified an increase in the income level at which people become liable for the higher tax rate as a significant priority.
Slowly but surely the percentage of taxpayers on the higher rate has been increasing, from 37% in 1996 to 38% in 1997, 39% in 1998 and 44% this year. Next year it would have increased to 46% if nothing was done and the percentage would soon have been over 50%. At that stage the top rate would have become the standard rate. The best way to widen the standard tax band is to put this band on an individual basis and to tax persons on what they earn as individuals, whether single or married. I have always believed that taxpayers should be given the facts openly and fairly, and the facts are that under this budget the number of taxpayers on the top tax rate will fall by 125,000 next year; by the end of the process, some 350,000 taxpayers will have been removed from the top tax rate, a reduction from 550,000 to 196,500; and the percentage on the top tax rate will come down from 46% to 17%, or to 12% when one includes those exempt from tax on low incomes.
The benefits of this policy move are that it recognises that we need a modem tax system for a changed society; it treats taxpayers as individuals based on what they earn and not on their marital status; it rectifies the imbalance in the tax system against most taxpayers who are single or two income earners; it takes a great number of middle income taxpayers off the top tax rate; it gets many single workers – 90,000 of them next year alone – off the top tax rate; and it puts up to £20 per week in the pay packet of those on average earnings.
The move to individualisation is the right way to go. I believe that the trade union movement recognises there is a case for individualisation. However, I recognise the strength of feeling that has been generated on this issue and on what taxpayers perceive as an unequal approach to stay-at-home spouses and two income families. Consequently, the Government decided to bring forward a £3,000 per annum tax allowance at the standard rate for taxpayers in respect of those spouses of married one income families who work in the home caring for children, the aged or handicapped persons. This fulfils a promise made by the Government in the joint Fianna Fáil-Progressive Democrats statement issued prior to the June 1997 general election of an allowance, then set at £2,000, for families in these circumstances.
That is terrible.
It was there in black and white and was well debated at the time.
Did the Minister not remember it on 1 December?
The Deputy's party had no such proposal.
Furthermore, in the light of the strong views expressed on the whole issue of individualisation, I believe it appropriate that the social partners consider the future development of the individualisation process in the course of the current talks on a successor agreement to Partnership 2000.
A hospital pass.
There can also be discussions, in the context of those talks, with the social partners on the way forward for the income tax system with particular reference to the low paid. The reforms which I introduced by means of tax credits and the concept of treating taxpayers on the basis of their individual earnings will provide a structure in the tax system to focus resources even more effectively within the income tax code on target groups such as the low income earners.
Hear, hear.
I am convinced, notwithstanding the current controversy, that those who reflect on these matters and who analyse the changes we have begun have already taken these points on board. I am more than prepared to assist social partnership by tax measures and tax reform to meet the goals we share in common – a better, fairer and sounder tax system for all. These goals are also the foundation for the Government's programme, for which a democratic mandate was received from the people and which we have a duty to implement.
I want to make it clear that the Government and I, as Minister for Finance, wish to and are ready to negotiate a successor agreement to Partnership 2000. I freely acknowledge the role the social partnership approach has played in the past in tackling the problems of unemployment, inflation and the public finances. Social partnership is also the way to address the new challenges that face us now; problems associated with rapid growth, maintaining our competitiveness into the future and sharing the fruits of growth.
Faced with these challenges, we need to ensure that we retain the true spirit of social partnership, with its inherent mutual commitments and trade-offs. The best way to proceed and the way that is most in keeping with the problem-solving approach that has underpinned social partnership is for all the social partners to resume their discussions on a successor to Partnership 2000, and I am glad that today the ICTU has decided to do this.
The overriding consideration for all involved must be the continuation of sustainable economic growth. Our successful performance to date is testimony to the sound economic policies we have put in place. If we can agree a new national programme based on implementing the vision and strategy in the recent NESC report and the Government programme, in a realistic and balanced way, we should be well placed to meet the challenges ahead. That should allow us to continue on a relatively strong growth path capable of delivering further solid increases in employment and living standards.
Hear, hear.
The Minister is prepared to stand behind the Minister for Finance at last.
I wish to share my time with Deputy John Bruton.
That is agreed.
An expression comes to mind, clichéd and all as it might be but appropriate under the circumstances, "Oh how the mighty have fallen". The last few weeks should have been a PR man's delight in terms of what he would have expected for the Government. There were major increases in Exchequer returns from tax revenue, a reworked Government programme between Fianna Fáil and the Progressive Democrats Party – all nice and cosy with Mary tied in again for another couple of years and no danger that she would slip under the net and get away – a national plan with £40 billion promised in spending and, to cap it all, a budget on 1 December, the anticipation of which had backbenchers quivering with excitement that the fires would be burning on the hilltops to welcome them home to their constituencies because of all the goodies that would be in the budget. They thought it could not go wrong because there was so much money available to the Minister for Finance, but sadly and irresponsibly it did go wrong. The same backbenchers who were quivering with excitement found their way quickly to the plinth and to RTE programmes to express their concerns and state that they needed changes made to the budget.
What has happened with this budget is extremely dangerous and serious. A budget must have credibility for it to be worked by the Government that introduced it. Instead we have a completely discredited system under the budget. We had budget mark one on 1 December and budget mark two when an announcement was made, which the Minister, in a most weak way, tried to defend tonight by saying the £3,000 PAYE allowance was in the Fianna Fáil-Progessive Democrats programme. He knew that on 1 December, he just forgot it and he is now trying, in a post hoc way, to defend what the Government has done. We got an indication there would be a budget mark three in that an additional £125 million would be allocated for social welfare changes, which I though we might have heard about tonight but there was not a dicky bird. The Minister hinted tonight that more money would be available and that there would be more changes to the budget to ensure that the partnership talks commence properly. That would be budget mark four. That is not the way to bring in a budget. The Minister, with his intelligence, realises he has brought the budgetary system into disrepute. He will rue the day he did that.
There is a macabre irony to this in that the man who built his reputation as being "a consensus builder" and a good negotiator is presiding over the most socially divisive budget ever introduced in this State. This man, the Taoiseach, Deputy Bertie Ahern, led the 22 merc. team across the Border last Monday to Armagh to meet their counterparts in the Northern Ireland Assembly, to manifest to the world how divisions of long standing were being cast aside and replaced with co-operation, harmony, peace and a sense that people wanted to work together. While he did that, he has failed dismally, as a leader and a Taoiseach in this Republic, to ensure that the resources and the assets we have in abundance were not more equitably and evenly divided between those most in need. The low paid, the unpaid – the women in the home – the widows, the widowers, the handicapped and the homeless are some of the forgotten sectors. None of those sectors was properly helped in the budget. One of the main points of Partnership 2000 is contained in paragraph 11.14 of Chapter 11. It states that all social partners accept that the benefits of economic growth should be shared by all citizens in a manner that reflects this country's commitment to social solidarity and a better quality of life not for some but for all our people. This budget has failed dismally to live up to the principle of partnership and the terms of Partnership 2000.
I would almost feel sorry for the Minister, Deputy McCreevy, if this matter was not so serious. He is present and he had some support a few minutes ago from the bouncer of the Fianna Fáil Party, the Minister for Health and Children, Deputy Cowen, and he is now joined by a backbencher who was used recently as a voice to express concern and then quickly went back into his box. I feel sorry for the Minister because he will have to take the flak and shoulder all this on his own. It is clear the Taoiseach has not been supporting him. The Taoiseach is more interested in his TAM ratings, his glad handling and being seen by as many people as possible. Show him a barber shop that is being opened, a hotel or an extension that needs the ribbon cut at its opening, a bonny baby contest and the Taoiseach is the man, he will there in a flash. No opening is too small for our Taoiseach. Shame on him for his lack of leadership, understanding and care, that his divisive budget would do so little to tackle the real needs of so many of our people.
Perhaps the most serious element of the failure of this budget is the major risk it has created for the prospects of a new partnership programme. While partnership programmes have been rightly praised in this House, they have also become a model for many other economies in Europe and elsewhere. In a recent interview with a Chinese newspaper, I was asked how our social partnership system commenced and why it worked so well.
In light of the budget, it is little wonder that the unions and the Irish National Organisation for the Unemployed are extremely angry and sceptical about negotiating a new deal when this budget did little or nothing to advance social inclusion for the low paid. Deputies opposite have been praising themselves because the Government intends to introduce a minimum wage in April 2000. It is a scandal the Government is considering doing that while it intends to leave the tax level as it is. That means that a person on a minimum wage will have to pay tax after earning £110.
I want to spell out what the Minister did with the extra money he had. The social welfare increases funded by taxation represent only 8.9% of new resources. Those funded by PRSI represent 6%, the health care package represents 2.9%, but in contrast, public sector pay equals 43% of the additional resources and income tax reduction equals 35%.
It is not that people do not like getting increases in their pay packets when they are well paid. Everyone likes to get a few extra pounds but this budget has divided family against family, sister against sister and brother against brother, where families have different working arrangements. Many people who will benefit from the budget – I do not deny there are some who will benefit – have said they would rather see the extra £40 they get on a wage of £40,000 being given to those on £10,000 who will benefit by only £2 per week as that would be more equitable. Such people have helped to build the economy.
According to CORI's assessment of the budget more people are below the poverty line than a decade ago. One in ten is consistently poor despite the growth levels; 95% were unemployed on the list for February 1999 and this excludes anyone who worked even one hour per week; 23,000 more people are on employment schemes; expenditure on social welfare decreased from 27% in 1996 to 23.6% in 1999, the lowest after Portugal, yet the number of recipients and beneficiaries has increased. In 1996 there were 33,000 family units on housing lists. That has increased to over 40,000 which means that more than 100,000 people are on housing lists. Some 4,000 to 5,000 people are considered to be homeless. That number has doubled in three years despite our growth and affluence.
Last night the Tánaiste had the gall to move an amendment recognising the importance of negotiating a new partnership programme. How dare she have the gall to say that when the Government has put in jeopardy the chances of a renegotiated partnership. We on this side hope there will be a renegotiation, but the Government has not helped the matter. During the summer, in the quiet weeks of July when she thought no one would notice, the Tánaiste tried to change the community employment scheme and indicated that the social partners had been consulted and had agreed, a wrong, untrue and devious action by the Tánaiste which, because of a Private Members' motion tabled by Fine Gael, she had to quickly change in the middle of September to ensure she did not breach the terms of the social partnership.
The Tánaiste quoted figures to defend herself. We all accept that the statistical basis of some of the measurements of our economy are looking good, but what about the quality of life, the value of people's lives who are still living below the poverty line and those living on reduced incomes, those on health care who cannot get their operations? The Government has done severe damage to the budgetary system by its equivocation and lack of leadership and the fact that the Minister for Finance, with, I would imagine, great anger which he has not displayed, has had to make changes to the budget, which we still do not know about. Neither do we know whether they will help ensure a renegotiated partnership.
The budget undermined social partnership because it neglected the central tax recommendation of the body that was the originator of social partnership, the NESC. In the interests of equity for the low paid, the NESC recommended that priority in this budget should be given to increasing basic tax credits. It did that knowing that tax credits had already been introduced. That approach would have given equal benefits to the well off and less well off. Instead the Government ignored that recommendation and opted to reduce the rate of tax and widen the bands, and so gave relatively little benefit to the low paid and very much greater benefit to the better paid. In so doing the Government substan tially increased inequality in our society. There is no basis in partnership for that approach.
The difficulties the Government is now facing were entirely foreseeable. It is not an excuse to say that tax credits changed the tax code last year. They did, as the Minister pointed out, but knowing that the NESC still recommended that the priority should have been for the low paid and for increasing credits rather than widening the bands or reducing the rates. The Minister, irresponsibly, ignored that recommendation. That was a serious political error for which this country and the Government will have to pay a high price and deservedly so.
The Government says it is introducing individualisation in the tax code. Most commentators use that term as if it was accurate. It is not an accurate term to describe what it is doing. Individualisation already exists in the tax code as an option but not in our social welfare code. Couples can already opt for individual tax assessment as it is, but they have unlimited freedom to transfer tax allowances and lower rate tax entitlements to one another within a family. The budget is taking away that freedom. The tax proposals should have been called family allowance pooling restrictions, not individualisation. We already had individualisation, the restrictions are new.
One area where there is no right to individualisation is in the social welfare code. Women could have benefited hugely if they were given the right to apply individually for social welfare payments or medical cards irrespective of their husband's income or vice versa. This proposal was not put forward in the interests of individualism, which the Minister espouses. Why? It is in the answer to the question why individualism is the banner for the better off but is ignored by the less well off that the true political philosophy of Fianna Fáil is revealed.
Fianna Fáil recognises high income individuals as individuals so long as they work outside the home, but it does not recognise social welfare recipients or medical card applicants as individuals. They have to have their income pooled with whoever lives in the house with them. For Fianna Fáil, social welfare applicants or medical card applicants are just a category, a class, a household unit. They are not individuals, but if you have a high income you are an individual in the eyes of Fianna Fáil. I refuse to accept this divisive and selective approach. We should choose. We must either accept the family as the unit for all taxation and social and other entitlements or alternatively accept the individual as the unit for taxation and all entitlements. You cannot have a halfway house that imposes individualisation for the taxpayer for the benefit of the better off but does not give it to social welfare applicants who are less well off. That fundamental inconsistency shows that it is not actually individualism that Fianna Fáil believes in but privilege for those who are better off.
I resent the fact that the letter from the Government to congress inviting it back into negotiation has not been tabled in this House. The House is sovereign as far as the public purse is concerned. Any communications committing this House should be on the floor of the House. They should not be available to RTE and others outside it but to Members.
Deputies
Hear, hear.
I deplore the fact that the Minister for Finance has been undermined by the Taoiseach in a deliberate, callous way.
That is right.
I was Minister for Finance and I was also Taoiseach working with a Minister for Finance. It is the most important relationship in the Government bar none. If the Taoiseach cannot trust the Minister for Finance and, above all, if the Minister for Finance cannot trust the Taoiseach for support, there is no basis for Government. It is entirely wrong, regardless of the merits or demerits of the budget, that the Taoiseach and his services were organising Fianna Fáil backbenchers to undermine the Minister for Finance.
Deputies
Hear, hear.
Shameful.
Right or wrong the Minister for Finance should have been backed by the Taoiseach. No circumstances justify what the Taoiseach did and I deplore the character that was displayed by him in the way he did this. I applaud the Minister for Finance's patience and his courage under pressure at present, and the grace that he is showing. He made a mistake but he is showing great grace in the way he is bearing himself in the present circumstances.
I deplore the Taoiseach's actions which were unfair and incorrect and undermined the constitutional position of the Minister for Finance. In my opinion those actions run contrary to the Constitution for that reason.
The Minister for Finance stated that he intends to consult the social partners in respect of individualisation. Why does he not intend to consult spouses who remain at home about this matter? They are the people who are most directly affected and they are not represented by the trade union movement or the employers. Why does the Minister not intend to consult them? If the social partners are entitled to be consulted, women and men working in the home are also entitled to be consulted.
Amendment put.
The Dáil divided: Tá, 75; Níl, 70
Tá
Níl
Tellers: Tá, Deputies S. Brennan and Power; Níl, Deputies Barrett and Stagg.
Amendment declared carried.
Ahern, Dermot.
Ahern, Michael.
Ahern, Noel.
Ardagh, Seán.
Aylward, Liam.
Brady, Johnny.
Brennan, Matt.
Brennan, Séamus.
Briscoe, Ben.
Browne, John (Wexford).
Byrne, Hugh.
Callely, Ivor.
Carey, Pat.
Collins, Michael.
Cooper-Flynn, Beverley.
Coughlan, Mary.
Cowen, Brian.
Cullen, Martin.
Davern, Noel.
de Valera, Síle.
Dempsey, Noel.
Dennehy, John.
Doherty, Seán.
Ellis, John.
Fahey, Frank.
Fleming, Seán.
Flood, Chris.
Foley, Denis.
Fox, Mildred.
Gildea, Thomas.
Hanafin, Mary.
Harney, Mary.
Haughey, Seán.
Healy-Rae, Jackie.
Jacob, Joe.
Keaveney, Cecilia.
Kelleher, Billy.
Kenneally, Brendan.
Killeen, Tony.
Kirk, Séamus.
Kitt, Michael.
Kitt, Tom.
Lawlor, Liam.
Lenihan, Brian.
Lenihan, Conor.
McCreevy, Charlie.
McDaid, James.
McGennis, Marian.
McGuinness, John.
Martin, Micheál.
Moffatt, Thomas.
Molloy, Robert.
Moynihan, Donal.
Moynihan, Michael.
Ó Cuív, Éamon.
O'Dea, Willie.
O'Donoghue, John.
O'Flynn, Noel.
O'Hanlon, Rory.
O'Keeffe, Batt.
O'Keeffe, Ned.
O'Kennedy, Michael.
O'Malley, Desmond.
O'Rourke, Mary.
Power, Seán.
Reynolds, Albert.
Roche, Dick.
Ryan, Eoin.
Smith, Brendan.
Treacy, Noel.
Wade, Eddie.
Wallace, Dan.
Wallace, Mary.
Walsh, Joe.
Wright, G. V.
Ahearn, Theresa.
Allen, Bernard.
Barnes, Monica.
Barrett, Seán.
Bell, Michael.
Belton, Louis.
Boylan, Andrew.
Bradford, Paul.
Broughan, Thomas.
Browne, John (Carlow-Kilkenny).
Bruton, John.
Bruton, Richard.
Burke, Liam.
Burke, Ulick.
Carey, Donal.
Clune, Deirdre.
Connaughton, Paul.
Cosgrave, Michael.
Creed, Michael.
Currie, Austin.
D'Arcy, Michael.
Deasy, Austin.
Deenihan, Jimmy.
Dukes, Alan.
Durkan, Bernard.
Enright, Thomas.
Farrelly, John.
Ferris, Michael.
Finucane, Michael.
Fitzgerald, Frances.
Flanagan, Charles.
Gilmore, Éamon.
Hayes, Brian.
Higgins, Jim.
Higgins, Michael.
Hogan, Philip.
Howlin, Brendan.
Kenny, Enda.
Lowry, Michael.
McCormack, Pádraic.
McDowell, Derek.
McGinley, Dinny.
McManus, Liz.
Mitchell, Olivia.
Moynihan-Cronin, Breeda.
Naughten, Denis.
Neville, Dan.
Noonan, Michael.
Ó Caoláin, Caoimhghín.
O'Keeffe, Jim.
O'Shea, Brian.
O'Sullivan, Jan.
Owen, Nora.
Penrose, William.
Perry, John.
Quinn, Ruairí.
Rabbitte, Pat.
Reynolds, Gerard.
Ring, Michael.
Ryan, Seán.
Sargent, Trevor.
Shatter, Alan.
Sheehan, Patrick.
Shortall, Róisín.
Spring, Dick.
Stagg, Emmet.
Stanton, David.
Timmins, Billy.
Upton, Mary.
Yates, Ivan.
Question, "That the motion, as amended, be agreed to", put and declared carried.