Earlier I requested permission to share my time with the Minister of State, Deputy Hanafin. I wish to change this and share my time instead with the Minister for Justice, Equality and Law Reform, Deputy O'Donoghue.
Financial Resolution No. 4: General (Resumed).
Debate resumed on the following motion:
THAT it is expedient to amend the law relating to inland revenue (including value-added tax and excise) and to make further provision in connection with finance.
–(Minister of State at the Department
of the Taoiseach).
Is that agreed? Agreed.
Substantial additional resources will correctly be devoted to persons with disability. I am happy that the living alone allowance will be extended to all recipients of invalidity pension, disability allowance, unemployment supplement and blind person's pension. Up to now only a reduced rate of disability allowance was paid where a person's partner was in receipt of a full rate social welfare payment. This limitation will be removed. We are also upgrading transport services for people with physical disability. A total of 140 wheelchair accessible buses are due for delivery to Dublin Bus shortly, while new wheelchair accessible DART and Arrow rail cars are coming on stream. I am assured that Cork, Limerick, Galway and Waterford will have a fully accessible bus fleet by the end of next year.
A sum of £28 million will be allocated next year to services for those with intellectual disability and autism. This will cost £35 million in a full year. This will bring total spending to £450 million next year, which represents a very significant improvement in residential, day and respite services. An additional provision will also be made to increase the maximum grants under the disabled person's grant and the essential repairs schemes.
Carers perform a very valuable role in our society, a role which the Government continues to support by its decision to relax the income disregards which apply in relation to the means test for carer's allowance. This will allow an additional 5,000 carers to qualify for the allowance as well as helping many current recipients. In addition, the annual respite care payment will be increased to £400 and this will be doubled where a recipient is caring for more than one person.
Up to now medical expenses relief could be claimed in respect of a relative only where the claimant qualified for a dependent relative allowance. In recognition of the problem facing many families, the rules will be amended to allow people to claim such relief where they are paying on behalf of a dependent relative, whether or not they qualify for the dependent relative allowance. Where a person is employed to care for a family member who is incapacitated a carer's tax allowance is claimable. The amount allowable will be increased from £8,500 to £10,000 per annum.
The care of our children must be our priority. The Government has decided on the largest ever package of supports for children and their parents. A major programme for supporting childcare in all areas has already been put in place. The national development plan includes £250 million for childcare and the Government subsequently allocated another £40 million. In the coming year £104 million of this will be spent. Child benefit is widely accepted as the best way to help parents and eliminate child poverty. I am delighted at the announcement of such a major increase. Child benefit rates for first and second children are being increased by £25 to £67.50 per month and by £30 to £86 per month for third and subsequent children. The new rates will be brought forward to June, which is three months earlier than usual. Other key elements of our strategy in this area were outlined earlier.
The social welfare package amounts to £850 million in a full year, twice the amount allocated last year. Most increases are being brought forward to next April. The package includes the following: personal social welfare recipients will receive an extra £8 per week and couples on full rate social welfare payments will receive an increase of at least £15 per week from next April; income thresholds for the receipt of the family income supplement are being increased by £25 per week from next April. This will result in average payments of £56 per week for existing recipients; and the contributory pension for widows aged 66 years and over will be brought up to the same level as the old age contributory pension over the next two years. As a result, the widows in question will receive a special weekly increase of £2.90, bringing the widow's contributory pension to £102, a total increase of £12.90.
We all owe a debt of gratitude to the older members of the community. Much of the success we enjoy today stems from their efforts. The Government has made income supports for pensioners a priority. Pension rates were increased by a total of £18 per week in the last three budgets and the full personal rate of old age and related pensions is being increased on this occasion by a further £10 per week. This will bring the rate of old age contributory pension to £106 per week, significantly exceeding our commitment to pay £100 per week to all old age pensioners by 2002. At the same time, 5,000 pensioners are being taken out of the tax net by an increase in the income tax exemption limits of £1,000 for a single person and £2,000 for a married couple. Furthermore, the medical card and benefits of the social welfare free schemes will be available to all those aged 70 years and over.
Housing continues to be one of the Government's priorities. The measures we have introduced to date have been designed to improve access to good, affordable housing. These measures are beginning to show results. Housing output has increased by 20% since 1997 to 46,500 units last year. Next year will see more than £1 billion spent on local authority social and affordable housing and a total of £346 million is being provided in 2001 for investment in water and sewerage services.
Up to now rent relief allowed for under 55s has been significantly less than that for the over 55s. The Government has decided to increase the rent allowable for under 55s by one third from £750 per annum to £1,000 per annum for a single person and from £1,500 to £2,000 in the case of a married couple. In the case of widowed persons the rate will be the same as the married rate of relief both for those under 55 and those aged 55 and over.
The Government is determined to tackle the tragedy of those who find themselves homeless and is providing major funding to improve services in this area. Capital funding is being doubled from £20 million to £40 million over the next five years. This will provide additional accommodation for homeless persons, particularly transitional accommodation to facilitate a move-on process out of emergency accommodation. Local authorities will receive an extra £6 million a year towards increased subventions for hostel accommodation.
We all agree that we need a modern efficient road network and a public transport system that delivers what the customer needs. That is why more than half of the £40 billion national development plan is targeted at infrastructure. Over the life of the NDP, £6.3 billion will be spent on roads, with £620 million being provided for the national road network in 2001. More than £2.25 billion has been allocated in the NDP for public transport infrastructure. This will mean a major improvement in the service for commuters.
From a business perspective, there are a number of tax measures I would like to mention. The business expansion scheme was first introduced in 1984.
The Minister has 15 minutes remaining.
I will conclude in deference to my colleague, the Minister for Justice, Equality and Law Reform. The budget is a hugely important step along the route set out by the Government and exceeds what we expected to achieve over five budgets, which we will introduce. I commend this resolution to the House.
I thank my colleague for being so accommodating. This is a good budget, the fourth in a series of five that redefines the manner in which Government engages with the people in delivering on the promise of achieving a prosperous, fair and inclusive society. It is, therefore, a budget that I, as a member of the Government, am happy and proud to commend to the House.
It was not so long ago that people tuned in to Budget Statements with trepidation to learn which taxes had been increased and which new ones had been imposed. That is no longer the case. With this budget we are continuing to ensure that all sectors of society, but most importantly the less fortunate and most vulnerable, are given the means to participate in, and to celebrate, the fruits of our economic success and of social partnership.
In the area of social inclusion the budget goes far beyond any previous package of measures in the history of the State. An unprecedented £2,110 million is being provided for this purpose. Compare that with the so-called achievements of the previous rainbow Government, whose inability to translate intention into action is legendary. That Government promised to spend £525 million on social inclusion measures over three years and in its final budget it managed to allocate £273 million.
Contrast that with the record of this Government. In budget 1999 we committed £282 million to social inclusion measures, in budget 2000 a massive £485 million was provided and the figure in this budget is £2,110 million. The latter amount is more than four times the amount committed by the rainbow coalition over its entire unhappy tenure in office.
I am particularly pleased to again put on record the Government's unqualified commitment to developing a childcare infrastructure. On taking office in mid-1997, we recognised the urgent need to develop quality childcare service provision and prioritised childcare as a central issue on the social agenda. What is important is that the Government acted on this issue immediately. We did more than simply talk.
In recognition of the complexity of the issue, shortly after taking office the Government established an expert working group on childcare under Partnership 2000 in July 1997 to devise a national childcare framework. The outcome of the wide consultation and discussions involved is reflected in the Government's childcare programmes, particularly the increased investment in the development of childcare service provision and the establishment of co-ordinating structures at national and local levels. The structures are designed to ensure a more effective, inclusive and co-ordinated approach to investment of finance and resources to develop quality childcare which meets the needs of our children nationwide.
The Government has allocated £104 million to increase the supply and quality of childcare places. This is the most significant investment in childcare ever made. My Department has been allocated £73.6 million in the budget to increase the number of childcare places and to maintain existing childcare places. I am particularly pleased that the resources have been front-loaded in this way to address the supply issue.
Lack of childcare facilities is seen as a major impediment to parents who wish to participate in training, education or employment. Quality childcare is not just an issue for parents who wish to participate in training, work or education. The needs and rights of the child are central to any developments. The basic principle underlying the rights of children is that society has an obligation to meet the fundamental needs of children and to provide assistance to aid the development of the child's personality, talents and abilities so that each child can realise his or her full potential. Research informs us that quality childcare provides social and developmental opportunities which lead to lifelong benefits for children in regard to their participation in society, both socially and economically.
There is also a need to co-ordinate information on the current level of supply of childcare services and the demand for those services to inform the future development of facilities. Baseline information is essential in the proper planning for the provision of any service and childcare is no exception. Up to now there has been an information deficit in relation to supply and demand for childcare services. My Department undertook the development of a database of such information with the assistance of the EU. The funding was invested in a national childcare census which provides us with data regarding level and range of group-based childcare service provision and the child population on a county by county basis. Last week I launched the remaining area reports in Ballyfermot so that information is now accessible for all counties.
I am confident this data will inform future planning and targeting of resources, particularly as we embark on our commitment to support the development of childcare under the National Development Plan 2000-2006, which provides £250 million to my Department's equal opportunities childcare programme. The funding is being invested in capital grants to community groups and organisations which operate on a not for profit basis; staffing grants to community groups and organisations which operate on a not for profit basis for trained childcare personnel in childcare services; capital grants for self-employed/private childcare service providers catering for up to 20 childcare places; support for the expansion and improvement of childcare training in Ireland; grants to enhance the national voluntary childcare organisations; and grants towards the development of local childcare networks. This will encourage and enable the formation of networks which will reduce isolation and provide mutual support for childcare service providers. It will particularly benefit services operating in rural areas. It will also assist the provision of a high quality service to parents and children as information and learning materials can be disseminated.
A total of 166 applications have been approved to date for capital and staffing grants to the value of more than £14 million. The grants will support more than 5,200 childcare places in total, including the future creation of more than 2,200 new childcare places. Deputy Noonan referred to this matter in his contribution yesterday and lamented the fact that so little of the money committed had been utilised to date. It may be true that only a small proportion of the money allocated has been drawn down, but the Deputy cannot expect large funds to be drawn down overnight in respect of a programme which only recently commenced. He is well aware that people must obtain planning permission and obtain builders and so on. It is absolutely ridiculous to make the suggestion he made.
The Government is totally and utterly committed to the provision of quality childcare and this is illustrated by the amount of funding which has been allocated to my Department for the coming year. Deputy Noonan implied that it is possible to undertake these projects overnight. That is similar to Deputy Owen's feeling on prisons. She felt the building of prisons could be announced without providing the funds. It is like saying one can have a shell without a snail.
Prisoners can also be let out on day release. The Minister knows what happens then.
The provision of this funding is enabling community-based childcare organisations to plan and construct new high quality childcare facilities and to refurbish and improve existing facilities as well as ensuring that the necessary staff can be retained. The funding is also enabling private childcare providers to access grants to build or renovate facilities to the highest standards or to purchase childcare equipment.
The funding will be drawn down by the beneficiaries as required during the various stages of construction and as staff requirements are met. I have noted the comments of some Opposition Members that all the funding allocated has not been immediately spent. I must take issue with that. It is extraordinary to hear this lame criticism. It is absolute nonsense.
It should not be extraordinary to the Minister.
I am always open to constructive criticism but I wish the Opposition could at least be consistent. Does it want the Government merely to spend money or does it want an effective, strategically planned delivery of a childcare programme that will exist into the future and meet the diverse needs of society? All funding allocated by my Department under the childcare programme is drawn down in tranches and is subject to strict monitoring, ensuring that targets are met and that the quality of the services are of the highest standards. I make no excuses for ensuring that the moneys allocated are effectively spent in a strategic manner.
Funding of £7.62 million over the next three years is being made available to seven national voluntary childcare organisations in recognition of the important role they play in assisting the development of quality childcare service provision which meets the needs of children. The Government also recognises that the level of training and qualifications of childcare workers impacts on the quality levels in childcare service delivery.
Funding is being provided to the OMNA early years project of the Centre for Social and Educational Research under the equal opportunities childcare programme for the development of a national training and qualifications framework for the childcare sector. The framework will contribute to the consolidation of the childcare profession. In addition to the funding of £250 million allocated under the national development plan to my Department for childcare, the Government allocated £40 million in extra supports for childcare.
Never before has there been such a commitment by Government to make available such significant funding to invest in childcare. It must be wisely and intelligently invested for greatest effect. Childcare policy must provide for equality of access and participation in quality childcare services by the children of the nation. The structures provide for a discussion and exchange of information between the key stakeholders which will impact on a national childcare strategy over the course of the national development plan. I am confident the measures I have outlined will meet their objectives and increase the quantity of childcare facilities and places and, in particular, improve the quality of services for our children. I commend the budget to the House.
I wish to share my time with Deputy Durkan.
Is that agreed? Agreed.
A competitive economy enhances the ability to raise living standards, to grow profitable small companies and to provide the wealth to carry out socially desirable policies. An uncompetitive economy will not prosper in economic and monetary union. Economic and fiscal policy must address these problems to ensure the continuation of the strong output and employment growth of recent times. A dynamic, small, business-led economy will sustain the intensity of employment growth and maintain current levels of investment. Growth in the economy needs to be sustained by policies aimed at taxation reform and the encouragement of indigenous investment. This requires the removal of four significant barriers and threats to the ability of business to succeed: inflation, housing, child care and taxation.
Despite an increase in house building output of 6.7% in 1999 and an increase in planning permissions of 57%, it appears the bones of the housing problem are being moved from one graveyard to another. Demand for houses remains very strong and prices continue to spiral. Progress on streamlining the planning process remains slow and an acute shortage of town planners is certainly not helping the situation. Housing and accommodation problems have the potential to destabilise the economy and are already threatening investor, consumer and employee confidence. A substantial amount of accommodation is required. In that regard, I welcome the provision whereby the first £6,000 gained in rent by a person who lets out a spare room in his or her house will be tax free.
I am critical of the increase in employers' PRSI. Employers will pay an additional £160 million after this budget. Added to the £46 million already levied in commercial rates by local authorities, this means the business community will contribute more than £200 million next year. Employers' contributions to the fund have risen alarmingly from 47% to 74% between 1987 and 1999 whereas employee contributions to the fund have fallen in line with reductions in employment taxation. At the same time, the Government contribution has fallen from 30% to zero. Any additional social insurance expenditure should be funded by contributions other than those of employers given the strategic need to improve productivity and lower costs for indigenous industry.
The decision to increase employers' PRSI is consistent with State policy. The Government has, in successive budgets, increased employers' PRSI – by 20% in 1999. This is no more than a tax on skills and adds to the already bulging Exchequer surplus while, at the same time, increasing the cost of employing skilled people. This is an additional tax on employing people. The Government will take an additional £160 million from employers. This is after a 3% pay increase was agreed under the partnership agreement this week. It is important to maintain a competitive tax-PRSI structure relative to our competitors, especially in the UK and Northern Ireland. Employers who run small companies will pay £160 million extra on top of £46 million in commercial rates. All these are factors and someone must pay for that.
The best way to improve work incentives is to ensure people on relatively low incomes do not pay tax. I am disappointed the minimum wage of £179.40 per week was not taken out of the tax net, as it should have been. There is no rationale in the Government taxing this income. It is unreal that, while people on the upper end of the scale receive a substantial gain, people on low incomes are still being taxed. Theirs is a very small income.
I am disappointed the health levy was not also removed. It belongs to another age when different economic circumstances prevailed. The entire PRSI system requires root and branch reform which has not taken place. The health levy confers no entitlement on anyone and should have been abolished, something that was not done. It is important that it is done because the employer is taxed to employ.
The economy is going very well at present but business is still very high risk and the additional charges compound the already difficult task of operating a small company in Ireland. There is little or no support for small enterprises with fewer than ten employees, although the bulk of the jobs in the State have been created in such ventures. Such businesses have received nothing from the budget. Property prices, planning restrictions and costs remain major issues for small companies which employ people.
The treatment of child care in the tax and social welfare systems is a key factor in determining work incentives for spouses and female labour force participation. What was announced in the budget will encourage people to stay at home. A significant amount of child care is provided in an unregulated capacity which is not tax compliant. The number of regulated child care places is contracting although demand will increase significantly in coming years. There is a problem with labour market participation and the fact that the requirement to provide proper regulated child care facilities is not taken into account in the budget and that there is no clear direction means people will definitely be encouraged to stay at home. The major difficulty in attracting people into the workforce is the lack of a properly regulated structure for child care facilities.
It was a major mistake not to extend the PAYE allowance to owners of businesses and working spouses. The £800 allowance does not apply to proprietary directors despite the fact that owners pay income tax on the same basis as their employees. A major step towards giving adequate recognition and reward to risk takers must be to cease treating them less favourably than other taxpayers. This has not happened and people operating their own businesses do not receive the same entitlements. That is a major mistake.
The increase in children's allowance will be appreciated by many people. However, child care facilities are very important and, as Deputy Noonan pointed out yesterday, implementation of those measures is important. While we have an unprecedented amount of money to spend, the major difficulty is getting people to put it into action. A sum of £23 million has been allocated to the area of child care of which only £57,000 has been drawn down. Little thought has been given to the workings of this although each Department involved will have ideas about how it can be implemented.
The availability of a well motivated, educated and flexible workforce working within a stable industrial relations environment has been the root of our success, especially in the context of the expansion of the economy and of new enterprises. We must ensure that is maintained. A competitive small business sector is crucial to the economy in generating employment and income. This sector makes a significant contribution to the ability of the Government to provide the essential services of health, social welfare and education. Small companies continue to play a significant role in economic growth and continue to be the central source of sustainable, long-term jobs. We must continue to improve productivity and reduce costs to industry. This requires an adherence to policies aimed at further tax reform and maintenance of a cost competitive economy. Inflation here is three times the European average, but small companies are receiving little or no support to cope. Due to changes in the PRSI system this year small firms will be giving an additional £160 million to the Government, which is over £3.5 million per week. This was announced in the same week that a deal was reached on the Programme for Prosperity and Fairness. All these developments represent hidden costs for business people.
In recent months, local authorities have agreed increases of up to 9% in commercial rates, representing an additional £46 million. The voice of small companies must be heard because they are the people who work 40-hour weekends and are employing people to provide services. The minimum wage has been wrongly classified because it is a gross wage. It does not represent a minimum income for the recipient because the sum of £179 is taxed. The misinterpretation of the words "minimum" and "gross" places additional costs on employers. In current economic circumstances, employees are seeking £175 net in their pockets and, therefore, in most cases, employers must pay the taxation on top. We should never forget the role of small firms within the economy.
Child care entitlements have not been properly dealt with in the budget. Private community based groups are leading the provision of child care and the Government is over dependent on the voluntary sector for such important facilities. The Government is fighting hard with health boards to put this package together. As Deputy Noonan correctly stated, we have the money but we do not have the people to do the job. Unfortunately, the problem lies in the fact that there is no body to implement a fraction of Government policy. Some 20% of the health budget is wasted, but if that occurred in the private sector the system could not operate. The trouble stems from increasing inefficiency rather than a lack of State funding.
The Government has got carried away because it has £4.5 billion to spend. Business is all about profitability and keen management. In the business world they say that turnover is vanity and profit is sanity. The Government has been carried away with vanity, but is it providing a service? I do not think so. There are huge deficiencies in the system, including provisions for carers, yet a PR spin has been put on the budget. We must concentrate on people who really need care, including children, those on the minimum wage and parents with children at school.
This Christmas we will see a burgeoning economy where the rich are getting richer but the poor are not benefiting. Those on minimum social welfare payments will receive an increase of £8 per week, which represents £1 per day, or less than the price of a lottery ticket. Prudent management is required to produce real benefits. We need a system to examine how this money is spent and whether it has made any difference. Many consultants, including Bacon, have produced reports for the Government, but we should have independent consultants to assess the effects of the budget. What did the budget deliver or achieve compared to last year's measures? With all this money available, why are so many people still unhappy?
It is not a matter of throwing cheque books at problems just because so much money is available. We need to assess how this money is spent and whether people will have benefited in six months' time. We need a system of assessment to discover where the real changes are occurring, as well as their effectiveness. Unfortunately, the Government has been carried away by egomania because it has billions to spend. The Exchequer will get a further £500 million from the sale of the TSB and the ICC Bank. The Government is being carried away with the notion of turnover, while people on the borderline are not benefiting. I hope I will be disappointed, but I think that people in real need will not see any changes. The country is rife with bureaucracy and waste in every Department. That is the real problem.
I am sorry the Minister for Justice, Equality and Law Reform had to leave because I could scarcely restrain myself when I heard some of his admonitions to this side of the House. When the Minister was in opposition he would have been very critical if somebody on day release from prison committed a serious offence. He would have been the very first person to accuse the Minister of negligence. He would have poked his finger in the Minister's eye and said: "You have been negligent, how did this happen?" I do not hear a word from him now, however. The last thing we would expect from the Minister is silence.
I am a little sad about the budget. In my budget speech last year, I predicted that if the economic theory worked it would be the first time it had ever worked in recent history. Unfortunately, I was right when I predicted that inflation would increase. I could see nothing else happening because I was comparing the situation with past experiences here, in Europe and in the United States. Every time the fundamental indicators had gone in the direction they went here a year ago, corrective measures were taken, yet nothing happened here. Like someone finding a wad of notes on the way to a race meeting, the Government embarked on a wild splurge, saying: "We'll bet on every horse in every race and we're sure to win something – that overall majority". That elusive overall majority is still on the agenda but it is as far away as ever now, and it will be further away in a year's time.
My reasoning for that is as follows: despite the fact that the Government has unprecedented resources at its disposal, the situation must be viewed against the background of numerous crises. There are crises in housing, agriculture, hospitals, the general health service, nursing, transport, teaching and crime. There is a crisis in every single sector. At such a time, how could anybody spend money without identifying and strategically targeting the areas most in need? These issues have not emerged solely in the past 12 months, they have been obvious to all and sundry for the past two years at least, yet nothing has been done about them.
The Government may say it intends to build 6,000 local authority houses, but it abdicated its responsibility in the public housing sector a long time ago. The job of taking up the slack has now been referred to voluntary and charitable organisations because the Government has failed in that area. People on housing waiting lists all over the country are being joined by others. Those in what used to be a higher income category are adding to the numbers on the waiting list. We are now in the ridiculous situation where the sons and daughters of Members on this and the other side of the House will have to apply for local authority housing because they cannot afford to buy a house of their own. That is the sad and stark reality. For the life of me I cannot understand why some member of the Government has not woken up to this. Do they think that it will go away and that somehow, like water in a bathtub, the problem will disappear? It will not happen that way. No one has made even the slightest attempt to address the issue in the past two years.
I witnessed jubilation on the faces of the poor unfortunate backbenchers on the other side of the House yesterday as each positive announcement was made. A cheer went up and they clapped merrily and happily. Their faces shone in full anticipation of the following announcement, but they missed the main events to which I referred and about which people outside the House are thinking. We seem to think that we live in a cocoon, that in some way we are protected from outside forces and that somehow we can make the circumstances we do not like disappear, but it is not and never has been like that.
By virtue of the impervious way it operates vis-à-vis the community, the Government has isolated itself. It does not seem to be aware of the issues I have raised. I mentioned in passing the agricultural crisis. I do not have to enumerate its various aspects. It is a problem with which the Government must deal as the rest of us can do only so much. While we can bring it to its attention, we cannot resolve it. The Government is in the driving seat and it is its responsibility to do something about it.
The issue of hospital services and the health service generally was raised at Question Time, including by me. I used to be a member of a health board, and all the solutions now being offered I heard ten or 15 years ago. None of them worked because plans were always presented too late. There were evaluations and reviews as well as scoping and final reports which were superseded by others, a matter with which the Leas-Cheann Comhairle is familiar as this is an area in which he has been interested for a long time. It was never thought worthwhile to recognise that the population was increasing. Times have changed since the 1950s. People now expect and are entitled to higher standards. If they expected higher standards six or seven years ago when there was no money available, they certainly expect a reasonable improvement in standards in terms of access today.
There is an ongoing crisis in terms of the numbers of nurses and doctors available throughout the health service. Hospitals are working from week to week. Wards have been closed due to the lack of staff. Perhaps I am imagining it, but there is no indication in the Budget Statement that this area will be targeted.
On the transport crisis, trains and taxis do not move, while airports are closed. People cannot get to work and home again, or am I just dreaming? Are we all crazy to think that this is happening, or is it the case that the Government is oblivious to it? The latter is the case. There is a passing reference to the crisis in the Budget Statement. The standards applicable and acceptable in the 1950s are not acceptable today. We are now part of the European Union. The Celtic tiger is supposed to be an example to the rest of the world. This cannot be said of the transport sector.
On the teaching crisis, parents must find it ironic that due to an industrial dispute a large number of students cannot attend classes as normal. I have never been one to advocate leap-frogging on pay in the public service, or anywhere else for that matter, but the fact that teachers are involved in an industrial dispute clearly indicates that there is something wrong somewhere. The sooner this is recognised the better. It is, undoubtedly, a factor that many young professionals can no longer hope to buy a house. They will soon be applying for local authority housing. They, therefore, find themselves in a desperate situation. I ask the Minister of State to use her influence with her colleagues to ensure the matter is resolved at the earliest possible date, for all the obvious reasons.
With all the tinsel, the hoo-ha and the honour and glory, the budget has to be viewed against the background of inflation. The increases, which were anticipated and heralded well in advance, must be set against the level of inflation in the past two years. We went over this course before between 1977 and 1981, much to our cost. It led to massive inflation, interest rate increases and unemployment. If we continue as we are, we will certainly end up in the same position. That is not in doubt. I suspect the Government is hoping it will achieve an overall majority before that happens, at which time the shutters will come down.
I got so upset when the Minister for Justice, Equality and Law Reform, Deputy O'Donoghue, was loquacious that I forget to mention the general situation on crime, which does not seem to feature in the Government's thinking in terms of the budget. Not only can one not get a house, get into school or hospital, on a train or in a taxi, neither is it safe to walk the streets at night without being attacked and mugged or, in some cases, killed.
Against all those backgrounds, each applicable to an individual Minister, about what exactly was the Government thinking in the compilation of the budget? It always seems to make comparisons with the rainbow coalition in its last year in office. In the immortal words of certain members of the Government, that was then, this is now. It will have to be prepared at some stage to accept full responsibility for what is happening, not just seek the acclaim which goes with the spending of large amounts of money, regardless of whether it is targeted in the right direction.
There is much more that I would like to say, but I will leave the Minister of State opposite with the following reminder. Women in the home, who were singularly neglected by the Government last year and this year, have a certain message for the Government. They will give it when the time comes.
Fáiltímse go mór agus ó chroí roimh an cháinaisnéis mar creidim go láidir go ndéanfaidh sé an difríocht do chuile dhuine sa tír seo agus go háirithe do pháistí. As Minister of State with responsibility for children, I believe this is the first children's budget in the history of the State. It gives financial backing to our policies and initiatives and to our commitment to the children of this country.
That commitment is evident from the publication recently of the national children's strategy which sets out a plan for the delivery of services and support for children over the next ten years to ensure we support them not in a crisis driven manner but in a way that is planned, organised and cross departmental. Today's announcement and the budget yesterday focused on those children who need particular care and support, the most vulnerable children in our community. Among them I include the children who, for a variety of reasons, must come into the care of the State. They are unable to remain with their families.
Everybody will accept that the best place for a child is within its family. However, there are over 3,000 children in foster care. Those foster families provide love, care, protection and support to children and young people who are not able to remain within their own families. For many years those foster families did not get the support and recognition which they, as parents, deserved for the valuable support they give our children. As part of the £9 million for fostering which the Minister, Deputy McCreevy, announced yesterday, I was delighted today to announce an increase in foster payments and allowances for those families.
The payment for children under the age of 12 years was £71.55. Today I announced that it is being increased to £200 per week. The payment for a child aged 12 years and over was £85.55 per week and that will be increased to £220 per week. Prior to this foster families had to go to the health boards, cap in hand, looking for discretionary payments. Different amounts were given out by different health boards at different times. It was not right that these families had to plead, "The child I am looking after, who is at risk and vulnerable, is making her First Communion and I need money; please help" or "The child is getting big and needs bigger clothes and shoes and I need extra funding".
All the discretionary payments will now be abolished and the substantial payment will be given to those foster parents. We value their role and the contribution they make to supporting children who are at risk. These children and young people need that love, care and protection. The role of foster parents is crucial in the continuum of care for children.
Of course, the first choice is that these children would remain within their families. Today we announced an extra £2 million for family support, to identify families who need extra help. Families will be supported through teenage parenting projects, an extension of the springboard project for Loughlinstown and Darndale, community mothers projects and so forth so we can identify and help children within their families. Where that is not possible, however, we have announced further supports for the foster families who provide such valuable support and care.
Debate adjourned.