I am pleased to speak in this debate on our budget. It is a progressive, socially caring and innovative budget and has been generally well received by the public and business. I congratulate the Minister for Finance, Deputy Cowen. The Minister, Deputy Noel Dempsey, appeared in the House just a while ago. The €4 billion package for transport is impressive. Developing our infrastructure across the country is very important. It is correct to borrow for infrastructure if necessary and the majority of our people and public representatives accept that. Transport is vital to the economic well-being of our country. For businesses large and small and commuters a good road infrastructure is essential. The budget for our national roads is €2.3 billion while local authorities have €600 million. That will be welcome across the country, including my constituency, where many roads need money spent on them. I particularly welcome €1.3 billion for public transport. Last night I heard Deputy Burton denigrate metro north. My constituents in Dublin North and the people in the rest of Dublin cannot wait to get metro north up and running. I hope Deputy Burton is listening. Next year a railway order will be made and metro north will proceed. Hopefully Deputy Sargent and I will have the pleasure of taking the first train from Swords.
Financial Resolution No. 5: General (Resumed).
Hear, hear.
The social welfare package is generous and affirms Fianna Fáil as the party of the people. It proves that the Taoiseach is the real, and perhaps only, socialist in the Dáil, other than the Acting Chairman, Deputy O'Connor. I welcome the overall package and the €14 and €12 increases to our senior citizens and people with disabilities. We have made great steps on the qualified adult allowance and this is particularly welcome. A couple will receive an increase of €41 per week and there are 42,000 such couples countrywide.
I am delighted we have reduced the stamp duty rate. I made many representations on this. Deputy Cowen was consistent and said he would do this when the time was right. The cooling of the housing market has given us the opportunity to reduce stamp duty rates. That has been broadly acceptable among the public and the building trade. For the benefit of the Opposition I point out that the Fianna Fáil manifesto——
We appreciate it.
We thank Deputy Kennedy.
The Deputy without interruption.
Deputy Kennedy is being positive. We must acknowledge that.
The Fianna Fáil manifesto provided that if there was a reduction in GDP we reserved the right to alter stamp duty, which I am delighted the Minister for Finance has done.
I particularly welcome the five-year clawback, which is now reduced to two years. It was an issue on which I had received many representations and I am delighted the Minister listened to me and to others.
On schooling, Dublin North, which is the Minister of State, Deputy Sargent's area, and mine, is the fastest growing region imaginable, with thousands of new pupils coming on stream. I am delighted the Minister for Education and Science, Deputy Mary Hanafin, has a large budget and that provision will be made in 2008 for an extra 12,000 school places. On top of that there is a €900 million budget for special educational needs and we welcome that, in particular. It is worth pointing out that some 17,000 staff are now engaged by the Department on special educational needs,
As Vice Chairman of the Joint Committee on Arts, Sport and Tourism, Community, Rural and Gaeltacht Affairs, I am delighted to see an allocation for development of the overall Government programme in this area. The Arts Council will receive €85 million, €3 million of which will go towards a budget for touring projects. In sporting terms, while I did not have the degree of success on the playing fields as Deputy Deenihan did, as a former player I have a particular interest in sport. It is gratifying to see a budget of €357 million for the sports capital programme. I particularly welcome the fact that €20 million will go towards swimming pool development. In Dublin North there are two projects on hold, one in Skerries and one in Balbriggan as well as the upgrading of the swimming facility in Portmarnock. Equally, some €83 million will go towards Fáilte Ireland and tourism is now the single biggest industry in Ireland. It has eclipsed the building industry. Something in the region of a quarter of a million people now work in tourism, and we believe a budget commensurate with that is worthwhile.
I welcome the fact that 5,500 new affordable homes countrywide will be provided for. Again, Dublin North has the fastest growing house building programme. We should get our share of that and I shall make demands in this regard. Some 9,000 social units are to be built countrywide, which will be well received as will the 4,500 relating to rental accommodation.
As regards overall aspects of the budget I am disappointed with the Opposition, particularly Fine Gael. If Fine Gael Members read their papers and listened to their constituents, they would see that this budget has been welcomed right across the entire spectrum by ordinary people and the business community. I suggest that Deputy Deenihan has a look at today's papers, if he gets the opportunity between my contribution and his. All the leading economists have said it is a good budget, as did the Institute of Chartered Accountants in Ireland, the Irish Taxation Institute, the Small Firms Association, the Irish Exporters' Association, the Irish Homebuilders' Association and many more bodies. They have all said this was a good budget, prudent and responsible for the time——
What about the ESRI?
Who said it was bad?
Fine Gael Deputies have been spilling a gloom and doom for decades and regrettably continue to do so. We create a net 1,400 jobs per week, despite the losses which are regrettable.
How many are being lost?
We live in the global economy and there will be job losses, but we have a net gain of 1,400 per week. It is time Fine Gael Members realised that and stopped the doom and gloom and trying to talk down the economy. We need to move forward with the economy and if necessary we need to borrow for infrastructure, which this Government is doing. I am very proud to be a member of the Government party and to recommend this budget to the House.
I want to clarify one point. The highly respected ESRI, in its commentary on the budget said that generally it was not good for the property market.
Trade people say it is good and they are better placed to comment.
I am somewhat amazed that for the first time since I came into this House, economic commentators are welcoming the borrowing of such a large amount of money, €5 billion. It is the highest ever in the history of this House and I am very concerned about that. What the Government has done in recent years is skilfully transfer State borrowing to personal indebtedness. The result is that on a per capita basis, this country is the highest borrowed jurisdiction in the world, I understand. As Deputy Kennedy knows, most houses are bought with borrowed money and an average house is worth about €100,000 to Revenue, which is really borrowed money. So the Government was really using that borrowed money to fund several projects over the years, some of them good, but more of them wasteful.
This economic activity was not based primarily on what we were selling abroad. Some of it was but much of it, especially that represented by stamp duty and other taxes from housing, was based on borrowed money which will have to be paid for by individuals in the future. I hope they are in jobs which will last, but they may not be. We on this side do not want to be prophets of doom and gloom. I have been in the House for 25 years and I have always been very positive. However, I have an obligation to be realistic as well and practical wherever possible and to support good proposals. Certainly I am very worried about this budget. It was skilfully portrayed to the media and there was a good deal of briefing beforehand. Obviously one could see the spin doctors were very busy. There was a good deal of selective leaking of evidence for the past month or so. What I am concerned about is that——
The Deputy wants no road, no rail.
——--there is such an acceptance of this huge borrowing. Whereas one time borrowing was a bad word, now it is suddenly becoming fashionable, and that is dangerous.
What about infrastructure?
The national debt, back in 1977, stood at around £4 billion. By 1981, under a Fianna Fáil Government, it had trebled to £12 billion, and as we are always reminded in this House, it doubled between 1983 and 1987.
It was £29 billion.
The Deputy is wrong.
It was £29 billion in 1987 under the Deputy's Administration.
It was not. It was £23 billion to £24 billion. To say it was more is the type of inaccurate information on which the Deputy and others like him have been briefed by his party for several years, so that they go around giving people inaccuracies. I would use the other word, but I am not allowed to, in the Dáil.
It is on the record.
It is not. The Deputy should go away and check it out.
Deputy Deenihan should do it.
The Deputy should do it, since he brought it up.
It was the Deputy's Government, who issued the statistics.
The Deputy is telling untruths to the House. He should go away and clarify that. There is a spokesperson present from the Department of Finance who might be able to clarify the figure for the Deputy. It doubled to about £23 billion at that time.
The Fine Gael-led coalition doubled it.
We did not, and since then, whatever gains have been made through various tax bonanzas, paybacks from DIRT and other schemes, from the sale of State assets and so on, have all been squandered. I have a statistic here, which Deputy Kennedy, who is so well-briefed by his party, will no doubt deny, that shows the Minister for Finance, Deputy Cowen, has turned a €2.3 billion Exchequer surplus into a €4.9 billion deficit. I am sure he will deny that too.
This is the worst decline in Exchequer finances in the history of the State. If I were a respected financial analyst or commentator, I would be careful about welcoming this type of economics. The Minister will increase current spending by €4 billion and capital spending by €1 billion. This is where the borrowings will go. It is all in one envelope of money and it is fine for people to state the €5 billion is going to roads and infrastructure. It is not. A total of €4 billion will go towards current funding because of a lack of proper management of the economy. People should be honest about this aspect.
I welcome the development regarding stamp duty. It is in line with the Fine Gael proposal prior to the last election on which we ran our campaign. We were criticised by the Minister and several others at the time. However, it is a similar proposal giving similar results to house buyers.
The issue of motor tax is worrying. We are one of the highly taxed countries in Europe with regard to purchasing a car or at the petrol station. We probably have a better regime than Northern Ireland because they come across the Border to buy petrol, but, generally speaking, the Irish motorist is treated extremely unfairly and possibly penalised more than anybody else in Europe.
Irish people have a major dependency on the motor car and other vehicular travel, particularly those in rural Ireland. The Government has forgotten and rejected this fact. Dublin and a place such as Kerry on the western seaboard are like two different countries. When one leaves Kerry Airport in Farranfore to come to Dublin, one imagines one is arriving in another country. Yesterday, a group from Valentia Island was here. Fianna Fáil closed the train link from Valentia Island to Caherciveen and closed the turf burning station. Now, the Government proposes to close the coastguard station which is the last thing they have. No doubt it is based on sound economics on Fianna Fáil's side.
A total of 750,000 tax payers will now pay the top rate of tax. This was not the commitment given prior to the election. My area of responsibility is defence but, prior to the last election, I was spokesperson on the arts. The Arts Council was promised approximately €87 million. It sought an increase of €20 million to continue existing programmes. It received an increase of 3% which amounts to approximately €2 million. Many artists and groups throughout the country are disappointed in this regard.
The night before the budget we recognised the work of the former Minister for the Arts, Sports and Tourism, Deputy John O'Donoghue. I have no problem with this and glorious statements were made about the flowering arts. However, this is the Government's response to the Arts Council recognition of the former Minister. It was full of pious platitudes but with no delivery.
With regard to the defence budget, the Reserve Defence Force allocation has decreased by 17%. The Government has succeeded in discouraging young people from joining the Reserve Defence Force and, as a result, the numbers are declining. An article on this was published in The Sunday Tribune last weekend. One reason for this is to save money and this is reflected in the decrease of 17%. This, in itself, is an acceptance of defeat.
On previous occasions, I raised as a major issue the matter of the Army Equitation School. This is one of the few such establishments remaining in the world. Our military personnel perform throughout the world on behalf of the country. They have been great ambassadors for the Irish horse. The budget allocates the school €300,000 to buy horses. Patrons have given them horses on loan. If we want our riders to have proper horses and to win Olympic medals, we must fund them. We have lost our own breeds through exportation. However, the Army Equitation School must buy Irish-bred horses and cannot obtain the class of horse necessary to win Olympic medals. We do not have a horse breeding policy and the entire matter is in a shambles.
Before Deputy Kennedy criticises Fine Gael, he should look into his own heart and his side of the House.
I reflect what people tell me and I ask Deputy Deenihan to do likewise.
Deputy Kennedy reflects how well he has been indoctrinated by his colleagues since he came into the House.
I am in the party.
When one has faith, one does not need indoctrination.
I watched the debate on the monitor. When one sees every Minister on script attacking what Fine Gael states, it means we are succeeding. The latest opinion poll had Fianna Fáil at 32% and Fine Gael at 31%. Next time it will be reversed and we will be ahead. People on this side of the House are performing well and connecting with the people.
They are not connected on the budget.
Our party has good days ahead. Deputy Kennedy should clarify the matter of the national debt because he got it wrong.
Deputy Deenihan should read The Kerryman and The Corkman on Saturday when he goes home.
Will the Acting Chairman advise me when ten minutes are up?
I do my best to look after the Fine Gael benches.
I welcome the opportunity to speak on the financial motions before the House. The budget for 2008 is one of the most disappointing of the past ten years. We have a lack of investment in education, health, transport and the social economy. This has been a dull and uninspiring budget from a Minister happier to take the easy option rather than drive change. This budget represented a test of leadership for the Minister for Finance, Deputy Brian Cowen, which he failed.
Ordinary families and small businesses will pay for the incompetent management of the public purse we have witnessed under the Minister for Finance, Deputy Cowen. We had the hypocrisy of pre-election promises made by this Government on tax cutting, when voters were grossly misled on the state of the economy in the recent general election. However, since the summer, the Minister for Finance, Deputy Brian Cowen, was dampening people's expectations and spoke about delivering a tight budget.
He strenuously tried to dampen down expectations, created by his party, with its unrealisable pre-election promises. In advance of the general election, Fianna Fáil promised 2,000 extra gardaí, 4,000 extra teachers, 1,500 extra hospital beds, 2,000 extra consultants, tax cuts, PRSI cuts and affordable housing. The deceit with which the election was won was a carbon copy of the general election win in 2002. It is clear for all on this side of the House to see that tax cutting proposals, which were never viable, had to be abandoned in the face of a €2 billion shortfall in tax revenues. Despite much talk about value for money, no mention was made in yesterday's budget of how value for money will be achieved.
The budget is a bitter disappointment to those who were promised by the Government that more families would be entitled to the medical card. In the programme for Government, Fianna Fáil promised to double the income limit eligibility for parents of children under six and treble it for parents of children with a disability. Fianna Fáil has reneged on this commitment. The Government could well afford to extend the medical card to all children under 18. Once again, low to middle-income families have been let down and are bearing the brunt of the inequality in our health services.
As we enter 2008, we can look back on a record of broken promises, failed policies and missed opportunities. Instead of using the benefits of recent wealth generation to help those most in need, Fianna Fáil and its recently acquired partners, the Green Party, have merely ensured a continuation of health, education and other quality of life disparities between those in need and those who have benefitted from a Government intent on promoting a culture of greed. I am confident the electorate will pass its judgment on this when next afforded the opportunity.
The Tánaiste has turned a €2.3 billion Exchequer surplus into a €5 billion deficit because of the sloppy, self-indulgent and wasteful way he has spent money for the past two or more years. This is the worst decline in Exchequer finances in the history of the State and it needs to debated. How and why did this happen? Six months ago, the Tánaiste stated he would entirely wipe out Government debt, yet we are borrowing €5 billion. This is nothing but incompetence on his behalf. The borrowed money will be spent on the €4 billion increase in current spending and €1 billion increase in capital spending.
As Deputy Bruton stated yesterday, the Tánaiste is a great man to have around six months after a property crash. While reform of stamp duty is welcome, it comes six months too late. Even with this new tiered stamp duty system, house buyers may still hold back on purchasing in the hope that property prices will drop further in the near future. For the past six months, economists and property specialists have been calling on the Tánaiste to introduce stamp duty reforms but he did nothing. With the number of people having their homes repossessed increasing by 20% over the past year and the majority of these repossessions being pursued by sub-prime lending firms, hard pressed mortgage holders will no doubt welcome this news.
According to the latest ESRI-Permanent TSB house price index, house prices have declined by 4.7% in the past 12 months, which is to be welcomed for those looking to purchase their first property. However, nurses and fire officers are still priced out of the property market and the reforms will not do much for them. Under the new residential stamp duty regime a typical house buyer in Dublin purchasing a house costing €400,000 will save €10,750. However, had Fine Gael been in Government, the house buyer would have saved €15,000.
The Government has delivered half the number of social and affordable units it promised at a time when 310,000 homes are vacant. What plans has the Tánaiste to ensure that the thousands of people on housing waiting lists find homes in the near future?
Higher hospital and drugs charges will take another €50 million out of the pockets of families. The Minister for Health and Children has given up on the most vulnerable in society by imposing stealth taxes in accident and emergency units and hospital bed charges and by raising the bar on the drug refund scheme from €85 to €90 per month. Her stubborn refusal to increase the income threshold for medical cards, which currently stands at €184 per week for a single person — €13.80 lower than the social welfare payment — means that people who have the misfortune to earn more than half the minimum wage will be denied medical cards. That is nothing short of scandalous.
The Government's neglect of mental health and suicide prevention measures was perpetuated by the absence of these vital issues from the budget announcements. One in four people will suffer from some form of psychiatric illness in his or her lifetime, so this issue must be taken seriously. It is reported that 500 people take their own lives and 80,000 attempt suicide or self-harm annually. These grim facts appear to have escaped the Government when it outlined its spending plans for the year ahead.
After ten years of the Celtic tiger, do we have leading edge infrastructure, a world-class health service or efficiency in the public service? Unfortunately, the answer is "no". The Tánaiste has blown a huge tax bonanza and he has spurned every opportunity for public service reform. This budget avoided the hard decisions and there has been no fresh start because the talk of budget reform is hollow. Once again, ordinary families and small businesses will have to pay. This has been a dull and uninspiring budget from a Tánaiste happy to take the easy option rather than show leadership in driving change. Budgeting in boom times is easy work but it is more demanding to produce budgets in tough times. Much more could have been achieved yesterday than this disappointing budget which will have no lasting impact.
I welcome the opportunity to speak on this important debate. The Minister for Transport made a very poor statement and I would give it a D or maybe an E if I was marking his report. Undoubtedly, the public will give him a no-grade when he goes to the polls. Transport is a key part of our society in terms of how we live and work. A measure of its importance is how well the spatial strategy works. The big picture should be proper reform of how we control growth and improve underdeveloped areas but the Minister's statement did not address these issues.
He spoke at some length on road deaths and I welcome the additional funds for the Road Safety Authority, the independence and commitment of which I acknowledge. However, European statistics on road deaths reveal that the reduction in deaths in Ireland since 2000 has been 10%, whereas countries such as France, Luxembourg and Portugal have decreased road deaths by in excess of 40%. Further progress has been made in Ireland over the past several years but we are not reducing the death rate sufficiently compared to elsewhere. Since 2000, the number of additional cars in Ireland has increased by approximately 99% but the corresponding increase in Portugal is in the region of 168%. Portugal has progressed further than us in terms of saving lives.
The Minister has failed to reduce the alcohol limit for drivers. The initial proposal by the Road Safety Authority was a reduction to 50 mg per 100 ml blood alcohol but that no longer appears in the road safety strategy and will not be the Government's target until after the next local election. The Government is procrastinating on introducing the necessary changes. Public opinion is more advanced than the Government on this issue and this House would support an immediate reduction to 50 mg.
Many of us like to park outside Leinster House and we cannot all be like the Minister of State at the Department of Agriculture, Fisheries and Food, Deputy Sargent, in terms of bringing our bicycles on the train, . However, we should travel here by public transport and, in order to provide a good example, we could set a target date, such as 2009, beyond which we no longer park outside Leinster House. We must travel to work by public transport if at all possible. I challenge the Green Party Ministers to set such a target.
The issue of park and ride is relevant to the capacity of Dublin to take increasing volumes of traffic. The city cannot accept the current unacceptable volumes of traffic for much longer. When I visited San Francisco some years ago, I investigated that city's traffic planning and its public transport system, which is more developed than ours. Planning permission is not given in cases where parking is provided and the policies of the city authorities are public transport orientated. At some point, Ireland must adopt a similar approach.
The planning and spatial strategies in our cities are wrong, with fewer people now choosing to live in Dublin, Cork, Limerick, Galway and other towns and cities and an increasing number moving to the outskirts of urban centres. A fundamental reassessment of public transport options in our cities and towns is required. Access to the main street of my home town of Drogheda is now restricted to pedestrian traffic and public transport vehicles only. This is a major change for residents of the town.
We must take a lead by making radical changes in our lifestyles, consumption of scarce resources and carbon footprints. No such changes are evident in the budget. While the Fine Gael Party welcomes the steps taken by the Minister for the Environment, Heritage and Local Government, Deputy John Gormley, in the area of vehicle registration taxation, the 9% increase in road tax for smaller cars does not encourage the use of less polluting transport. While the increase in road tax is greater for larger cars, the changes do not discriminate sufficiently in favour of smaller vehicles.
The Government lacks credibility. Its spatial strategy has failed, it has still not reduced the legal alcohol limit for drivers and it has failed to tackle the problem whereby 100,000 people from outside the State who have committed road traffic offences cannot be given penalty points. Those who regularly use the M1 constantly see drivers from the North travelling at incredible speeds with impunity.
A recent report showed that the number of people travelling by bus has declined in recent years. Bus travel must be made more attractive by increasing the number of quality bus corridors. We need many more public transport initiatives. Despite having Green Party Ministers at the Cabinet table, €55 million allocated for public transport initiatives one year ago has been returned to the Exchequer. The Government has failed to meet its own targets. A sum of €55 million would cover the cost of providing 196 new buses.
It sounds fantastic when the Minister informs us in his Budget Statement that he has allocated millions of euro in additional funding to various Departments. However, Ministers are failing to deliver on promises because some of these allocations are not fully spent. A good Government would not allow €55 million allocated for public transport initiatives to be returned to the Exchequer.
Part of the problem with public transport in the capital is that Dublin Bus has a virtual monopoly. While some private operators offer services, we need more new routes opened up to competition to allow residents of the new urban areas growing on the outskirts of Dublin to get in and out of the city. Greater competition is needed on transport routes, particularly new routes. Competition will foster greater efficiency in Dublin Bus and encourage private operators to enter the market. In addition, consumers will have better choice and more transport options. Giving buses priority at traffic intersections is a key factor in encouraging people to use buses and improving their efficiency.
I propose to share time with the Minister for Communications, Energy and Natural Resources, Deputy Eamon Ryan, and the Minister of State at the Department of Community, Rural and Gaeltacht Affairs, Deputy Conor Lenihan.
During the debate on the pre-budget Estimates, we took stock of the scale of expenditure in the different sectors and, more important, the depth and breadth of the services being delivered by Departments. The decision of the Minister for Finance to reform the system for the presentation of the public finances is a fundamental one in respect of this budget. The traditional Estimates process has been abolished and this year, for the first time, the budget day announcement clearly singled out the additional expenditure on which the Government is embarking in its financial plans next year. This is a sign of a reforming Minister for Finance.
We often heard about reform in financial procedures from the benches opposite but we have a Minister who is implementing reform in this area. The manner in which the budget was presented reflects great credit on the Minister because he has implemented a reform which eluded many of his predecessors.
I am pleased to set out in some detail the Estimates for the justice and equality sector, taking into account the budget day additions and expenditures announced by the Minister yesterday. While these figures sound impressive on their own, what matters is not the magnitude of the resources but what is being achieved with them. I share the view emphasised by the Minister for Finance and, I was pleased to note, Deputy O'Dowd, that we need to obtain value for money at all levels of public expenditure and deliver better and more effective public services. One of my key concerns is to drive this objective throughout the work of the justice and equality sector.
My priority and that of the Government in deciding where to add to funding for existing services has been to focus on the fight against crime and to extend the effective capacity of organisations at the heart of this effort. Beginning with the Garda Síochána the resources provided for 2008 have been increased by 11%. This funding makes it possible to continue Operation Anvil on a national basis and implement other intensive policing activity, with particular emphasis on tackling organised crime and road safety enforcement. It will provide for 15,000 Garda members as well as a greatly increased civilian cohort, including 300 civilians for Garda stations outside Dublin. This human personnel is being matched by an investment of more than €100 million in leading police technology, including a new, state-of-the-art digital radio system, an automatic number plate recognition system and an IT based major incident system. There will be continued expansion of the successful CCTV programme.
Less high-tech but no less essential support services are also to benefit, with funding for Garda station maintenance increased by 14% and clothing and accessories by 35%, as anti-stab and ballistic vests are delivered to serving members for their protection in frontline duties. It bears repeating that this enormous investment is taking place in parallel with a major modernisation programme designed to support the Garda in dealing with the complex challenges it faces. Other key agencies involved in tackling crime at every strategic level are receiving substantial investments. The best possible technical and forensic insight to detect and prosecute crime is essential. With this in mind, the forensic science laboratory is to be modernised and co-located with the Garda technical bureau in new facilities adjacent to the Thornton prison site. Funding has also been provided for additional scientists and analysts at the laboratory. A new facility for the Office of the State Pathologist is also in development, with funding provided in 2008 for this purpose and the recruitment of additional pathologists.
I draw attention to the provision of additional funding for the first full year of operation of the national office for the prevention of domestic, sexual and gender-based violence, Cosc. Particular circumstances apply in crimes of this type and a whole-of-government approach is required to tackle it and make proper provision for its victims. I am pleased there is now in place a dedicated resourced office with the key responsibility of ensuring the delivery of a well co-ordinated response to domestic, sexual and gender based violence. The agency is not separate from the Department but an integral part of it, with its own distinctive brand and identity.
I have also provided for a major expansion of staffing in the probation and welfare service, with the recruitment of 70 additional personnel. This will complement a substantial programme of strategic restructuring and refocusing of the service's work to contribute to a reduction of offending in our communities. Of note also is the provision of €50 million, or an increase of 19%, for the youth justice service, which like the probation service has a vital role to play in addressing offending in our society. This new service brings responsibility for young offenders together under one roof for the first time. A badly needed programme of rejuvenation for youth detention and training facilities is under way and the number of youth diversion projects has been increased to 93 with more to come. The same strategic rationale applies in this instance as with the probation service. Timely, targeted and well thought out interventions at an early stage have the capacity to yield a preventative return long into the future.
More generally on the justice Vote, overall funding is up 7% and, in addition to the items I have mentioned, this is being applied in a targeted fashion at a number of priority items. These include an 11% increase in funding for the Legal Aid Board to bolster its capacity to provide legal services to persons of modest means throughout the country. The board has made substantial progress in achieving this objective in recent years and is playing a leading role in promoting alternative means of dispute resolution.
Funding under the broad equality heading has again been extended under the justice Vote and includes a substantial provision for the new office of the Minister of State with responsibility for integration as well as an increase of more than €2 million for gender mainstreaming and positive action measures for women. Of note also is the additional funding provided for the national property services regulatory authority which will be placed on a statutory footing in legislation due to be published in 2008. A new code of practice for the property service industry and a public register of licensed auctioneers and estate agents have been introduced. The establishment of the authority was one of the key recommendations of the auctioneering estate agents review group. It will act as a centrepiece for sound regulation in this field.
Overall funding for the Irish Prison Service is set to increase by 11% in 2008 with the building programme enhanced by an increase of €10 million in funding. This will yield an additional 320 prison spaces. Provision has been made to extend a range of measures introduced this year to combat organised criminal activities in prisons. These include an additional 178 personnel to establish an operational support group, specialised in searching for illicit materials, as well as drug dog units and airport style search facilities to be installed in all closed prisons.
The net estimate for the courts is up 4%. It includes funding for new stenography services and for additional support staff to support the appointment of additional judges. The Courts Service has delivered important service improvements in recent years, in particular by reducing court waiting times. These enhancements will be helped by the Estimate provision this year.
The property registration authority which was established last year and has taken responsibility for the Land Registry and the Registry of Deeds is to receive an increase of funding of €2.6 million, mainly to provide for 40 additional staff to support a greatly increased demand from the public for its services. Major investment in the digital mapping project will also continue in 2008 and will, as the culmination of a range of IT initiatives, deliver substantial efficiencies for the public into the future.
I reiterate my intention to ensure we get the best possible return for the public's investment in the justice sector. This will require careful management of the resources allocated and a focus on value for money, but the priorities I have outlined should give a good indication of what can be delivered with these resources.
It is a privilege to be here to speak on the budget, sandwiched as I am between the Lenihan brothers. Little did I ever think I would end in such a privileged position. I am very glad to share these benches with my colleague Ministers.
It is a change from where the Minister was last year.
It is indeed. Change will be the content and the subject of my speech.
I will accept change.
Change is coming and change is something we need to welcome and steer in the right direction. There is no doubt we are facing into difficult and different economic times globally from what existed during the past ten or 15 years. It is clear from the broad economic picture that what we have seen in recent years is a very significant increase in energy prices, in oil and gas, in the international markets, which is feeding through with a number of different effects.
Oil is down €20 a barrel today.
The Minister, without interruption.
That is good news. Oil prices will go up and down but, in general, the characteristics of the global economy in recent years are that high energy prices have, in turn, led to high flows of money between the oil producing companies and the rest of the world, but they had a considerable inflationary effect. The way in which the world economy works in an integrated way has led to interest rate increases in a number of countries which, in turn, may be one of the forces which has triggered some of the recent credit crises. We have to be aware of the possible threat that exists from credit markets tightening up. The evidence to date is that it is the inter-bank market that is primarily affected and that it is not necessarily constricting corporate credit excessively but it is something we have to watch for. I make this point given that we are facing difficult economic times because I am old enough, as is my colleague, the Minister of State, Deputy Conor Lenihan, with whom I was in college, and we are the same age, to remember the last time we faced into difficult international circumstances. The circumstances were similar in the early to mid-1980s where high, rising energy costs led to a global economic shutdown. The response in this country at that time — most of us here are old enough to remember it — was flight.
I exclude Deputy D'Arcy from my comments. The response at that time was evacuation from the country. There was widespread emigration to other economies, to America, Australia——
The present time is comparable.
The point I am making is that our response this time, as a people and as a country, will be different for a number of reasons. We are more confident, more capable and have more resources and better infrastructure to allow us face a difficult economic climate if it exists. I believe the budget indicates a steering of the economy in the right direction and indicates a response that is appropriate. The budget indicates that the new Government is setting a different and an appropriate course for the economic conditions that exist, which are different from those we faced during the past ten or 15 years.
I commend the Tánaiste and Minister for Finance, Deputy Cowen, on the course he is taking and the broad direction he is setting the economy and our society in this budget. It fulfils three policy objectives he set out in a recent Indecon speech on the overall direction of the economy. He said at that time that our policy response was in a ten-year horizon, which is the appropriate time for us to look at it, to get productivity, equity and the environment working together. They are three policy goals which complement each other. This budget does that. When one looks in a strategic ten-year sense at the direction it is taking, it achieves all three objectives.
The increased investment in capital expenditure, up to 12% growth, which by any standard on a high base is a significant commitment to our productivity agenda. That capital deepening — the words used by the Minister, Deputy Cowen, in his speech — is absolutely appropriate as it allows us to trade through a difficult economic period. In a sense one could take the word "productivity" and substitute the word "efficiency". Energy efficiency will be one of the main areas in which we can achieve productivity. This approach is the right way to proceed.
The budget shows concern for equity and that in any difficult economic times we cannot leave the most vulnerable behind. I support and commend the fact that half of the additional funding that was available went to pensioners, those in receipt of social welfare and those who were not able to trade their way out of difficult economic times. That is an example of equity that the Green Party is pleased to support and to deliver in government. This budget shows, for the first time, an important commitment to the environment. It is a historic start where green policies that have been espoused for 25 years by my party are being put into action. It is a historic occasion where there is a clear indication of a strategic change of direction by the State to steer the country in a greener direction. Changes in the motor taxation and VRT system, of the nature we have introduced——
That is Fine Gael policy the Minister is adopting.
——are of fundamental importance because they show there is a mental change. There is a recognition that we have to set policies which steer the country to a cleaner, greener future where we reduce our CO2 emissions. I commend the Minister for his support and on the introduction of a range of different measures, which is the start of a process we have to go through of decarbonising our economy. In my Department, the increased investment the Minister for Finance has allocated, which includes a 25% overall increase in spending, a 43% increase in energy spending, a similar large increase for environmental issues, such as inland fisheries, increases for key infrastructure issues and important capital issues such as broadband——
The Minister is just plugging the hole in broadband created by the Government.
That investment by the Minister for Finance and ourselves fits exactly into the overall strategy on improving our productivity, providing social equity and tackling environmental issues.
This Minister took €10 million from broadband just weeks ago.
I look forward to using that 43% increase in the energy budget to provide for significant new development and supports in the ocean energy area, where we may have an opportunity to set an international example and to lead. I look forward to being able to deploy such a budget in the further development of the greener homes scheme to make sure new technologies we might want to introduce and support can have extensive support.
His first act on taking over as Minister was to cut the grant.
I look forward, as a Green Minister in Government, to establishing a new home insulation grant which will provide an innovative new approach to helping householders do what is difficult at present, namely, to know the right thing to do to make their houses energy efficient.
I look forward to being able to amend the refit schemes in the area of electricity and to support new offshore wave and wind and other biomass energy projects.
What of all the hollow block houses the Government allowed to be built in Dublin?
I look forward to working with the Minister for Finance on spending the €1.7 billion to which he referred yesterday on electricity and gas networks so we can turn key businesses like the ESB and Bord Gáis towards this crucial new agenda, which is to reduce our use of energy to achieve the productivity gains to which the Minister referred. I look forward to working in Government to deliver broadband in a way that allows our society to become innovative and clean in how we do our work.
Who is stopping the Minister delivering but himself?
I visited Google last week at the invitation of the company to talk with them on a number of issues in this area. It was interesting to note that despite the company having 1,600 staff, there were just 20 car parking spaces at its plant, half of which were empty, whereas there were hundreds of bicycles lined up outside. I said to myself — that is the future; that is where we will go as a city and country because that is what the world will want in terms of economic development.
The Minister on the bike.
That is okay if the person lives in Dublin 4.
The Minister wants everyone to live in the city.
That is an attractive example of what can be done when we steer this economy in a greener direction.
I look forward to working within the budget increases that have been allowed to TG4 to deliver programming which allows us to look back at ourselves and our country, as well as to question, entertain and look outside. I look forward to working with RTE. I commend the budget increases we are allowing it through the licence fee increase in order for it to help us move towards a digital television future which frees up spectrum for other technologies, innovative developments and economic progress.
I look forward to working with the chairmen of the fisheries boards, including the Central Fisheries Board and the Regional Fisheries Board. My Department has an integral role in environmental protection, just as it has in terms of social and economic development.
This budget shows clearly that there is an interconnection between our economy, society and environment. All three go together. Progressing our environmental agenda will be good for our people and the economy. The budget steers us in that positive direction. I commend it to the House.
It is an honour to speak alongside my former UCD college mate, the Minister, Deputy Ryan. It is a particular privilege given that this year we have seen an historic partnership alliance formed between Fianna Fáil and the Green Party. When I was in college with him, I never expected the Minister would be on this journey with me but I am glad he is——
He was slow enough to hold the Government's hand.
——and that today he has deliberately chosen to point to the Minister, Deputy Cowen's, groundbreaking Indecon speech, which indicates that the future for this country is about productivity, equity and the environment.
I take the opportunity presented by this debate to congratulate the Green Party on the success it has achieved in negotiating a programme for Government that steers the Government in a new, cleaner environmental direction. We should give credit to the Green Party. It is fair to acknowledge it has championed this issue over many years and is now delivering on its many promises. It wanted to force the political system, including Fianna Fáil and many other parties, to take this issue seriously. I congratulate it on what it has already achieved in Government and look forward to another five years with it following the next election.
Wishful thinking.
In framing the budget, the Minister, Deputy Cowen, had to look at what is an uncertain picture for the global economy. On the one hand, there are the fears, instability and uncertainties released by the sub-prime issue, first in the United States and then across the world banking sector, some of which remain. On the other, there are the positive developments in the global economy, particularly in China, Brazil and the central and eastern European economies, which are growing. Nonetheless, uncertainties remain and the budget reflects this fact. We do not know where the global crisis engendered by the sub-prime crisis will end but we hope there will be a positive landing and the world will not be pushed into recession.
The budget reflects the different funding picture that faces the Exchequer due to the slowdown in the residential property market. In holding the growth in spending at 8%, the Minister has done well on the current spending side. It is important, as we look toward a lower trajectory of growth in the economy, that we get public spending under control. The Minister's new device with which to achieve this, namely, the idea of pinning Ministers to their statements of spending while providing existing levels of service, is a positive development. In many ways it is long overdue that we would address the underlying reform issues that face us with regard to the public services generally, in particular public spending and how it is derived.
In his financial planning for the year ahead, the Minister is correct to put the emphasis on the capital programme, which has been allocated a significant and positive 12% increase. We are embarking on the biggest infrastructural spending programme ever seen in the State. It is genuinely historic but we need to achieve value for money in an effort to maintain our position as a successful, competitive international trading economy that makes us, according to some estimates, the fourth richest country in the world.
The Minister is managing the transition from very high growth in the domestic economy to a lower but healthy and sustainable level of growth, when one compares it to other countries in Europe. He is managing this transition but he is also managing a new transition for the economy in which it will become a value-added economy. We will have to invest in training, research and development, infrastructure and our people in the coming years if we wish to consolidate the level of affluence we have achieved in the past ten years.
The budget provisions do much to assist us in our new growth path. The economy is in good health. Growth of 3% is a strong level and twice the European average, while the harmonised index of inflation is at 2.4%, which is also positive as it is important to have a low inflation environment in order to implement our economic policies.
Given the need to pare back on Exchequer spending due to the residential construction slowdown, some people became too despairing about the state of the economy. Some 24,000 new jobs will be created next year, which is a very positive net figure. The Minister was correct to put the emphasis on keeping 32,000 people out of the tax net. It is important we protect and insulate the vulnerable, such as those on social welfare payments and very low incomes, from higher taxes and a predatory approach by the State to their incomes. It is important also that those on average industrial earnings were kept at the standard 20% rate of tax. This is what the Minister set out to achieve in the budget and he has done so. The Minister's stamp duty reform has the great value of simplicity and immediacy. One of the problems that has beset the Government with regard to the controversy surrounding such a proposed reform is that the public did not have certainty with regard to the tax regime. The Minister has now provided for that in the residential property area, which is important. Some of the statements that were made both inside and outside this House over the past year did not help to stabilise the market. In fact, they had the opposite effect of destabilising the market. Opposition parties have to take some of the blame in that regard for what I call wild, populist declarations with regard to stamp duty.
The Minister is implementing, more or less, what we have proposed.
I hope these measures will engender an element of confidence on the residential side. One of the key issues in restoring confidence in the house building sector is to tempt people into the market who have been postponing the decision to buy because of a perception that prices will fall lower. If we can tempt even a small element of them it will stimulate more house purchases. At the other end, we must hope that the stamp duty reform regime the Minister has put in place will also prevent some builders from stopping supply coming into the market. There is evidence that some builders are not taking the discount on house prices, but prefer to sit on houses in the hope of eventually getting the asking price. A certain element of discounting needs to occur so that people can be confident, albeit taking a discount on house prices and thus releasing them onto the market in the hope that, of itself, such moves will stimulate further purchase activity. Hopefully that will happen.
While I am not expressing Government policy in this personal view, I hope the Minister will examine whether stamp duty reform could be brought to bear on the non-residential sector of the construction industry. There is some evidence that commercial property transactions are being held back because of the stamp duty issue. Some developers to whom I have spoken in recent weeks have mentioned that as one of the factors that may be inhibiting transactions and trade in the commercial property sector. I do not know and I will leave it as an open question, but I am sure the Minister will take it into consideration when he plans further measures.
I thank the Minister, Deputy Cowen, for the generous allocation to me as Minister with responsibility for integration. The sum of €9.2 million is a substantial allocation which will allow me to begin my work on the integration agenda. Because this is a budget debate, I will confine my remarks on integration and immigration to the strong economic reasons for such a ministerial portfolio, as well as cross-departmental action. Across our society we need to take the issues of integration and immigration seriously. The ESRI estimates that migrants contributed at least 2.5% to our GDP in recent years. Migrants in Ireland are predominantly able-bodied workers aged from 18 to 44, and they form a dynamic and productive part of our workforce. Interestingly, in many cases, in that particular age cohort, they are predominantly better qualified than Irish citizens. They are more likely to be degree holders, for example, and have a potential to add further to the productivity of our economy in future. One of the challenges for this Government and its successors will be to maximise the potential productivity that migrants bring to our country. They are predominantly over-qualified for the jobs they currently fill and therefore a key challenge will be to ramp up the levels of English-language tuition for such adults so they can access it and will not be inhibited in any way from rising up the career ladder. That is one of the challenges facing my departmental remit.
There is a twin paradox in the labour market as it is currently constituted. On the one hand, 10% or 12% of our population comprises migrants who are over-qualified for the jobs they hold. At the same time, however, 300,000 of our indigenous Irish population are under-qualified for the fabled jump they must now make to achieve the high value-added economy to which we aspire. These are important challenges which we can face up to. The budget gives us the platform to do that. Ireland is facing a major challenge in the years ahead. We will see closures and low value-added employment leaving the country.
Some 2,300 have left this month alone.
We must make this leap into the higher value-added traded services and manufacturing. That will be a big challenge for the Government and society at large. The Minister for Finance, Deputy Cowen, is the ideal man to lead that change and lead this country into a bright future where there will be plenty of employment. Hopefully, my children and grandchildren will never have to face the prospect that the Minister, Deputy Eamon Ryan, and myself faced when we left college in 1984. At that time, the majority of our colleagues were emigrating to London and other places.
I wish to share time with Deputies Bannon and D'Arcy.
Is that agreed? Agreed.
I am glad of the opportunity to speak in this debate. There was a time when the Minister of State, Deputy Conor Lenihan, would use a ten-minute speech to try to goad the Opposition, but he seems to be maturing as a Minister.
I thank the Deputy.
Mellowing.
Or mellowing in an attempt to be taken seriously perhaps. As regards the budget, the two big ideas were stamp duty and VRT reform. It is worth pointing out that Fine Gael has, by and large, welcomed stamp duty reform. It is a relatively simple and straightforward measure, which is similar to what we proposed before, during and after the election. For previous speakers to suggest that Fine Gael has been acting irresponsibly because we called for a just stamp duty reform for over a year, is stretching credulity to say the least. For a year in the build up to the general election, the Minister for Finance and the Tánaiste we at odds over stamp duty reform. In many ways that contributed to so much confusion and hesitancy in the housing market. I hope we now have a clear view as to what will happen with stamp duty. The previous speaker's comments on the potential for stamp duty reform in the commercial sector were not overly helpful. The last thing we need in any other sectors is confusion that is not based on sound planning for stamp duty reform. Let us try to leave it to the market at this stage.
I wish to concentrate on the areas for which I have responsibility, including climate change, carbon emissions, energy, communications and natural resources. Ireland should be aiming to lead the world in tackling carbon emissions. We should be highly ambitious as to what can be achieved here. Ireland is privileged to have wind, wave and tidal resources that are unparalleled anywhere else in Europe. We also have a climate where biomass can be grown more efficiently than in most other European countries. We have natural competitive advantages that remain as yet untapped or partially tapped in the case of wind resources. If the Government, including its Green Ministers, and the Opposition are serious in trying to make an impact on global climate change, we should be able to speak credibly at international climate change conferences on issues, including carbon emissions and greenhouse gases generally. Currently, we have no such credibility. The country has had ten years of prosperity, opportunity and economic growth, but we have done little or nothing to prepare for the challenges we now face, including the reduction of greenhouse gas emissions. We are well above the targets to which we are committed in the European Union under the Kyoto Protocol. The Minister of State does not need me to reel off the figures in this regard time and again.
In principle, I strongly welcome the Minister's announcement on carbon budgeting and the approach whereby the Government will measure its own performance each year and indicate the sectors that are producing emissions and the sectors that have improved. We will judge the Government on its performance and not on its words. We will be able to hold the Ministers for Agriculture and Food, Transport, Environment, Heritage and Local Government, and Enterprise, Trade and Employment to account over their efforts to lower greenhouse gas emissions. The only way one can do so is to have accurate figures. To be fair to the Minister for the Environment, Heritage and Local Government, Deputy Gormley has given us some figures to work with, which I welcome as a first step.
There are some problems relating to how we started off with carbon budgeting and there are three scenarios we need to consider in this regard. The first is the "do nothing" scenario, which is essentially the one that has obtained for the past ten years, apart from some promotion of wind generation over the past 12 months. The second concerns the full implementation of the recommendations of last year's climate change strategy and the third involves making the extra changes required to achieve an average annual reduction in carbon emissions of 3%, as set out in the programme for Government.
One problem with the speech on the budget by the Minister, Deputy Gormley, was that he did not provide figures for the "do nothing" scenario. Doing so would have served as a serious reality check, particularly for his Fianna Fáil colleagues, who need to change their mindset fundamentally if we are to have a green economy. The Minister stated that even if we implemented in full the measures contained in the National Climate Change Strategy, we will still emit an average of 3.2 million tonnes more per annum than the amount agreed to in our Kyoto commitment, at a total cost to the taxpayer of between €150 million and €325 million, depending on the terms the National Treasury Management Agency is able to negotiate. This is the agency that purchases carbon credits to offset our pollution.
The Minister outlined the additional emission reduction measures he proposes under the national climate change strategy to achieve the annual emissions reduction target of 3%. However, in his calculations he is taking for granted that the targets under the strategy will be achieved. This is clearly not the case according to the evidence before us. Although the strategy was announced as late as last April, we are already falling behind on the targets we have set, in addition to falling behind on commitments made in previous climate change strategies. This is why the Minister's speech this morning is not as credible as it should be.
The only step the budget proposes in terms of transport is to rebalance vehicle registration tax, as discussed and welcomed by all. Last April the national climate change strategy announced the publication of a sustainable transport action plan before the end of 2007 but there is no sign of it yet. All the Minister did in this regard was make an announcement on 4 December that he will prepare it for some date next year. The national climate change strategy states that CIE is required to have all its vehicles using a 5% bio-fuel blend but there has been little progress on this issue in the eight months since the publication of the strategy. The latest update suggests that the Department is working with CIE to establish how these targets can be achieved in the shortest timeframe possible. However, we were supposed to have achieved them by the end of the year. The Minister lacks credibility when he provides us with emissions reduction figures based on such vague timeframes.
The top priority of the national climate change strategy in terms of reducing transport-related emissions is a modal shift to public transport as part of Transport 21. This priority appears to be in tatters given what the Minister for Transport, Deputy Noel Dempsey, said today. He confirmed time and again on radio that there will be a deliberate bias in favour of building roads between cities between now and 2010. Where is the green monitoring of strategic development within Government?
I welcome the fact that an additional €7 million has been allocated for research and development in respect of wave energy. However, I would like a further allocation to be made. Unfortunately, there seems to be no additional funding allocated for other renewable sources such as wood biomass. Surely it makes sense in Ireland to replace peat with wood biomass, which is carbon neutral and can be grown very efficiently on bogland from which peat is derived.
I welcome the lightbulb initiative but we could be even more aggressive in this regard. I would not be averse to placing a levy on non-sustainable lightbulbs to subsidise the cost of more environmentally friendly ones. I welcome the fact that we are dramatically increasing capital expenditure on grid development.
My views on the Government's performance on broadband are well known. When the Minister states an extra €10 million has been allocated in the budget to promote the roll-out of broadband, he is deliberately misleading the House. He took €10 million from the broadband budget in 2007 and all he is doing with the extra allocation is increasing the figure to match the one that existed at the start of this year before he took the money to spend it on the greener homes scheme.
There is no additional funding in the budget for next-generation broadband roll-out, which is now needed desperately. In addition to making broadband available, we need high-speed broadband. We do not have it at present. There is no capital allocation in the budget for the nationwide roll-out of much-needed, high-speed next-generation broadband, as there should be under the national development plan. The Acting Chairman, Deputy Cregan, knows well that we will be discussing these issues again at a meeting of the committee he chairs.
Even more than ever, the actions of the Government leave me outraged. By what distorted thinking can it be considered logical that its Leader deserves a pay increase 60 times greater than the amount given grudgingly to the elderly in the budget? The elderly are the very people who brought the country to a level undreamed of in their youth and who elected the Government that now insults them with a €14 increase if they are lucky to have a contributory pension or a miserly €12 otherwise. This is a drop in the ocean and pretty sick when one thinks of the increase of €700 to €800 per week that the Taoiseach is pocketing. Instead of providing for the anticipated increase of €20 per week for old age pensioners, which is hardly above the rate of inflation, the Minister for Finance had the nerve to throw a miserly €14 at pensioners who, by their hard work, created the Celtic tiger, while at the same time copper-fastening the €800 increase for his leader. What makes the Taoiseach worth six times the rise granted to elderly people? A rise of €14 is miserly and would hardly buy a drink for the Taoiseach but this is what pensioners are expected to take as their annual increase.
I tabled the following parliamentary question in the hope the Government would have some heart and reward elderly people. I asked the Minister for Finance, in light of the fact that one in five pensioners is at risk of poverty and given the undertaking in the programme for Government to increase the basic State pension to €300 at least by 2012, if he is prepared to ensure this provision is front-loaded and not drip-fed at the rate of €20 per year and if he will make a statement on the matter. Far from conceding or even hearing, the Minister has reneged on his promise to increase the pension rate by €20 a year until 2012. That is a shame on the Minister for Finance and a greater shame on the Taoiseach who has destroyed the moral integrity of the highest political position in the State, threatened the core of our democracy by his actions and yet considers himself worth 60 times the value to be paid to elderly citizens.
This Government has ignored the marginalised, the poor, the ill, the disabled, the elderly and their carers. It has done very little to lift older people out of the poverty trap and leave them comfortable in their retirement. The cost of disability payments is not included in this budget.
Of particular concern to me is our heritage which is an important aspect of environmental protection. Conservation of our heritage adds to our quality of life, culture and education. Heritage is strongly linked to tourism and is a cornerstone and legacy of the tourism industry with cultural and heritage sites having a crucial role to play in extending the tourism season. How does the Minister for Finance respond to the protection of our heritage? He gave little recognition to the important role it has played, and will continue to play, in shaping the country in which we live.
There is a need for an integrated approach and greater co-ordination at Government level and between Departments and local authorities for an improvement in awareness levels concerning heritage generally and a recognition of the important part it plays in our economic development. The small increase allocated to the Heritage Council is to be welcomed on the principle that every little helps but it is way below the margin to enable our built heritage to survive for generations to come. Once lost, rare architectural sites and buildings can never be replaced.
In this regard, I highlight the courthouse in Castlepollard, County Westmeath, the Fr. Matthew Hall in Athlone, the famed jealous wall site in Belvedere House, Mullingar, and the 17th century Foxhall monument in my parish of Legan, County Longford, which is not only unique in Ireland but in Europe. These are all under threat on the Minister's watch.
The Minister for the Environment, Heritage and Local Government spoke glowingly in his budget speech of what he plans to do in regard to parks and wildlife with the large sums of money which the Minister for Finance has given him for that very purpose. Strangely, not one figure was mentioned. Our Green Party Minister certainly does not appear to have green fingers. If finance is needed, which it is, then the parks of this country will certainly not be blooming.
Where is the input of the Minister for the Environment, Heritage and Local Government to be seen in this budget? Shortly after entering office, he promised he would review the policy to protect our architectural heritage. In case it has slipped his notice, such protection requires funding and this has slipped through his fingers. A mere 14% increase in funding to the Heritage Council is not exactly anything to boast about.
The environment portfolio in general has suffered at the hands of a supposedly Green Minister. The budget lacks strong green initiatives. Raising car tax, copying Fine Gael's policy on VRT and the re-announcement of the over-hyped commission on taxation are not exactly what we would have expected from a Green Party Minister. While welcome, and certainly supported by Fine Gael as we were the first to propose such a policy, the VRT changes are long overdue and should have been introduced this time last year.
I hope the commission on taxation, when it gets over the continual re-launch process, will give lie to the old saying that actions speak louder than words and will produce some results. Replying to an Adjournment matter of mine last month, the Minister for the Environment, Heritage and Local Government said there is huge potential in the area of renewable energy and that he wants to see the Government deliver on that potential. There are no prizes for guessing how it delivered. Funding for energy efficient initiatives was slashed by 50%. Six months into Government, the Minister for the Environment, Heritage and Local Government and the Minister for Communications, Energy and Natural Resources have made no noticeable contribution to meeting our Kyoto targets and once again the taxpayer will be forced to carry the can to the tune of €10 million in carbon credits.
Measures, if one could call them that, to support our farmers are conspicuous by their absence from this budget. As we all know, farming is riddled with bureaucracy, which is driving an ever-increasing number of farmers off the land. Unlike what is taking place in other countries such as New Zealand, the budget does nothing to encourage young people into farming and fails to address the suspension of the farm improvement scheme. It shamefully fails to address the lack of pension cover for farm spouses and some older farmers. This budget shows no evidence of a commitment to the future of the agriculture sector. Rural Ireland is disproportionately affected by continuing job losses in manufacturing — 500 jobs were lost in Abbott in Galway and 32 jobs are likely to go in my county of Longford this week — and in agriculture because of unbalanced regional development.
Targets for decentralisation have not been met. It has certainly not gone ahead as promised and has been doomed to failure from the outset. Decentralisation has proved to be an empty promise and will go down in history as the most significant of all the broken promises of this Government.
Economic development in rural Ireland is being stifled. It is said we are heading for a vibrant knowledge-based economy and yet the budget did nothing to advance this aspiration. There is no investment in the next generation of broadband. Lasting damage will be done to our competitiveness unless there is large-scale investment in the next generation of networks but that aside, every household in the country deserves a broadband connection.
Indicative of the hidden nature of this Government was the extraordinary direction by the Minister for Education and Science to remove my colleague, Deputy Brian Hayes, the Fine Gael spokesperson on education, from her education budget briefing this morning. Even she must be able to calculate that the cat is already out of the bag and the meagre provision for education has been seen by all.
I listened to the Minister for Justice, Equality and Law Reform and I am sick and tired of hearing this Government downplay the drugs problem. We can no longer ignore the extent of this problem and the Government must take strong action to tackle this lethal epidemic which has beset this nation.
I am pleased to discuss the first budget since I became a Member. I am concerned about the borrowing of approximately €5 billion for 2008. Department of Finance projections for recent years have not been very accurate. What I describe as the Cowen budgets have, so far, been inaccurate to the extent that from 2004 to 2006, they have underestimated the tax take by about €5 billion. The Government's numbers were incorrect to this extent. In 2007, the Department underestimated the numbers by €1.75 billion so, hopefully, the numbers with which we have been presented will be somewhat accurate or more accurate than they have been in the past number of years.
The Minister for Finance did what he had to do. He was absolutely obliged to go forward and borrow moneys to keep the national development plan on track and to continue the current day-to-day spending that must be continued in respect of health, education and other Departments. The question I pose is whether the Minister was prudent in his previous budgets. Should he not have set aside moneys and slowed the economy so as to ensure that when the day which we all knew was coming arrived, we would have the cash we needed? I likened the Irish economy to somebody riding a bicycle down a hill as hard as they possibly could but being afraid to touch the brakes because they were going too fast. We are, to some extent, in a speed wobble. Nobody really knows where or when we are going to come out of that wobble. Will it be a crash? If so, what will be its extent? We just do not know.
As I stated, my concern relates to borrowing €16 billion in the next three years. I am worried that this is where we must go when one considers where we have been in the past three to four years.
I will touch on some of the numbers within the budget in respect of our source of income — where the moneys are coming from and where the stream is coming into Revenue. VAT is the largest contributor within the State. The 2008 projections are for €15.15 billion in VAT. That is an increase of about €700 million from 2007-08. VAT moneys are now greater than income tax. The scenario whereby the tax take from products or labour sold or traded is greater than income tax does not happen in very many economies. It worries me for the simple reason that the small amounts of moneys — €12 and €14 per week — that have gone to pensioners and upon which my colleagues have touched will be eaten up very quickly by the increase in VAT.
In terms of the other Departments that have received moneys, as my colleague, Deputy Bannon noted, there was practically nothing relating to agriculture. Given world prices for grain and dairy prices, one would have considered that this economy might have received a bit of a boost. We have always seen that farmers here are excellent spenders. However, there has been no reinvigoration of that market. I am sure the Acting Chairman will agree on a point I have previously raised with him concerning a land-based payment in respect of the bio-fuels sector. Competition from the cereal sector has been very significant in that the margin per acre for cereals is now much greater than it is for bio-fuel crops. We have heard much talk about the Green imprint on this budget but this imprint should have touched upon the land-based payment. If we do not continue to support the burgeoning bio-fuels sector, it could fall by the wayside very quickly.
Fine Gael has long argued that stamp duty badly needed to be reformed. The Minister held the position, which was consistent, that he would not be the Minister for Finance who would reform it but he did. He was left with absolutely no other option. He was obliged to move. However, I have a particular concern about it. He has reorganised the bands, which is very welcome, but we do not know whether the reorganisation will be a real help to the market. For example, the stamp duty on a house, property or unit — whatever one wishes to call it — priced at €250,000 will be slightly less than €9,000. To be frank, the markets are dropping by €9,000 every six months for those houses. I do not know if this is correct but the cumulative effect of the drop in the market prices and the reduction in stamp duty, which will be small and will not amount to €9,000 for a small unit, might be enough to stimulate it. However, I am concerned that it is a minimalist approach. The Minister could have been braver and done more in trying to reform this sector.
I made a submission in respect of stamp duty applying to sites in a letter I wrote to the Minister. Anyone who buys a property will get the benefit of the €125,000 exemption, with the exception of the person who purchases a site. This is something that must be examined. Many rural Deputies, of which I am one, know this is something we need to consider. It is just an oversight on the part of the Minister but it badly needs to be addressed.
I wish to share time with Deputies Mansergh and Finian McGrath and perhaps another Deputy.
Is that agreed? Agreed.
I welcome the opportunity to speak briefly about the budget and will concentrate on those areas for which I have responsibility in conjunction with the two Ministers from the Green Party — the Minister for the Environment, Heritage and Local Government, Deputy Gormley, and the Minister for Communications, Energy and Natural Resources, Deputy Ryan.
In respect of water services infrastructure, which is a hugely important element of the work of the Department of the Environment, Heritage and Local Government, I welcome the fact that a 10% increase is provided for the water services investment programme for 2008. This is enormously important in a programme that has been rolled out very strongly over the past two or three years, initially in the greater centres of population in response to difficulties relating to the transposition of European directives and water standards arising from them. The programme is gradually being extended. The current programme for the next three years, which was announced by the Minister for the Environment, Heritage and Local Government in September, will include provision for all areas with a population of over 1,000 and a great many under that. This 10% increase will enable us to undertake the kind of works which would be required at the current level through 2008. It comes on the back of an additional allocation of €50 million, which was budgeted for and went through committee on Tuesday last.
Drinking water standards are hugely important. Wastewater treatment plants and treatment plants for the water supply are one of the critical elements in this area. Ultimately, the new wastewater treatment plants play a critical role in protecting and preserving the quality of rivers, lakes, estuaries and marine waters and are hugely important.
We must also bear in mind that water conservation measures are hugely important. They have gradually been advanced by the Department over recent years. I understand that the average usage per person is as much as 140 litres per person per day in some areas, but over 250 litres in other areas. Water conservation is one area where we are trying to make progress and where we are working closely with local authorities in various schemes to achieve it because it is not in our interests to spend huge amounts of money on treating water which is subsequently wasted either at the level of the consumer or, sometimes, at the level of the network. Tremendous work is underway in addressing those networks which need to be updated.
The revised drinking water regulations were made earlier this year, with a view to ensuring that all drinking water supplies are consistently monitored and supervised and that where quality problems arise, measures are taken to systematically address them. The Environmental Protection Agency has responsibility for monitoring and enforcement of public water supplies operated by local authorities. Local authorities, in turn, have responsibility for those schemes operated voluntarily by the group water schemes sector. Under the new regulations, those monitoring programmes by the local authorities are subject to approval by the Environmental Protection Agency. We will see a major increase in the amount of monitoring. Arising from this, problems will emerge about which we would not have known.
We will have a campaign to ensure quality in all public supplies and private group water scheme supplies. The Waste Water Discharge (Authorisation) Regulation of 2007 was recently signed into law. These regulations provide for authorisation by the EPA of discharges from local authority waste water treatment works and collection systems released to all types of receiving waters. The EPA will monitor compliance with the regulations and will prosecute offences including any failure of local authorities to comply with conditions attaching to an authorisation.
The budget for the fire services has increased by 15%. It is operated by 37 local fire authorities and the strategy of the Department is to assist and support local authorities in the role of protecting people, property and local infrastructure in fire and other emergency situations.
Continued participation in EU civil protection matters will also feature prominently in the work of the section. The 2008 fire services capital programme will provide funding for the construction and upgrading of fire stations and the procurement of fire appliances and specialised equipment. There has been a significant increase in capital investment in the fire services and this will continue in the 15% increase in the provision for this year. Over the past nine years, €165 million has been provided in grants to the fire services, a considerable increase on previous years. I hope it will continue for a number of years into the future.
The fire services change programme is being implemented. The two year phase has been completed and options for further development of the fire and emergency services will be informed by the findings. The implementation programme for the new framework for major emergency management was approved by Government on 30 May 2006. The 2008 fund will provide for a central fund for regional steering groups to support and assist them in carrying out tasks assigned to them under the framework for major emergency management as well as the organisation of information seminars to assist and support local authorities in their efforts to prepare and update major emergency plans.
I welcome the provision of €54 million for broadband infrastructure. I also welcome the move towards next generation networks and the commitment to energy research. We can take advantage of the wind, wave and tidal resources outlined by Deputy Coveney. If properly harnessed these could put us in a prominent position to produce energy. We must have energy conservation and efficiency measures, such as the building energy efficiency ratings. These contribute to a lower requirement for energy that is becoming more expensive, such as when oil hits $100 a barrel.
I congratulate the Minister on an excellent budget that has given the economy a renewed sense of direction in more challenging economic circumstances. The Minister's approach reflects the underlying strength of the economy, the objective being to keep employment high and taxes low.
That is an ambition.
In more difficult times we are making good use of the reserves and strength built up. There has been criticism from the benches opposite of the resort to very limited borrowing, less than 1% of GDP. Not a single commentator, as far as I am aware, shares the Fine Gael view on this subject. The AIB Global Treasury Economic Research review of the budget states:
The move to a budget deficit should not be viewed as a cause for concern given the marked slowdown in the pace of economic activity, sharp fall in property related tax receipts, the very low level of the national debt and the fact that there is a very large current budget surplus. Indeed, fiscal policy should be counter-cyclical and thus stimulatory, if at all possible, during an economic slowdown. Thus, we would not have favoured an overly restrictive budget today and are not bothered by the deficit target.
One will find the same remarks made by other economic consultancies.
Did they not say he was a bit late?
The Fine Gael spokesperson spoke about this as the worst deterioration in the public finances. The problem is that nobody believes him. The worst deterioration in the public finances was when the national debt doubled from what was then measured as £12.7 billion in December 1982 to £25 billion in March 1987.
Alan Dukes's Tallaght strategy turned this country around.
Deputy Mansergh without interruption. Deputy Bannon has already made his contribution.
I did not breathe a word when Deputy Bannon spoke even though I disagreed with much of what was said.
Deputy Mansergh was asleep when I spoke.
I am delighted that the national development plan is being maintained. Public investment is very important and is key to the future development of the economy. The Minister mentioned one of the major projects in south Tipperary, the completion of the Cashel-Mitchelstown road. I am equally pleased at the considerable extra investment in public transport, which I consider to be equally essential.
There are no negatives in this budget. Those on the minimum wage have been kept out of the tax net, those on the average industrial wage will remain on the standard rate. This morning a point was raised about minor increases in health charges.
It was 10%.
Deputy Bannon should desist.
As a result of the Minister's reform, the Book of Estimates is being published with the budget and those changes always accompany the publication of the Book of Estimates. The concentration of tax relief is on those at the lower end of the scale, which is the consistent pattern of the Tánaiste since he took over as Minister for Finance. One of the most interesting tables in the Minister's speech, on pages C19-21, shows how much the average tax rates on annual earnings on all levels of income have declined in percentage terms from 1997 to 2008. What was a substantial tax burden is now much more limited.
I welcome the stamp duty reform, although the Minister is correct to be critical of the impact of some of the debate on the housing market. Anomalies are being corrected and the burden reduced. Affordability for young people has improved through a mixture of a drop in price, increased mortgage interest relief, stamp duty reforms and, perhaps, falls in interest rates.
In the area of social welfare I welcome the increase in the dependent allowance. From next year, spouses will receive full payment, the same as the pensioner. I am pleased that the commitment to overseas development assistance is being maintained.
The Irish Farmers’ Journal acknowledges that a number of anomalies in the farm sector are being corrected. It is not as much as it would like but, unlike the benches opposite, it acknowledges the improvements made. Tipperary is pleased to have 45 decentralised jobs and expects over 200 within a few years. As far as Tipperary is concerned, decentralisation is working well.
What about the 10,000 promised?
Deputy Bannon had his opportunity and should allow Deputy Mansergh to continue.
That buachaill in front was full of it three years ago.
I am glad that significant increases of 12%, 7% and 5% have been allocated in respect of first, second and third level education, respectively, with capital spending up 8%.
That will not even pay for——
Deputy Bannon should allow Deputy Mansergh to continue, without interruption.
In light of some of the pressures faced by schools, these increases are necessary.
I and my colleagues on the Government benches are extremely happy with the budget. When the country was previously in difficulty, budgets tended to be quite tough. However, because of the underlying strength of the economy, it has not been necessary to be draconian in this instance. As an official put it to me earlier, squirrels put away nuts for the winter. We have been able to take out and use some of those nuts now that they are needed.
I wish Deputy Mansergh had not set me the challenge of trying to come up with a better analogy than that which he just used because I will not be able to do so. However, I must inform Deputy Bannon — I do not want to upset him in this regard — that the famous speech on the Tallaght strategy was actually made in Templeogue by that good man, Alan Dukes, who I always admired.
I wonder if Fine Gael Members listened to the Taoiseach's fine contribution earlier, particularly where he stated that this is the first of five budgets. Perhaps that accounts for their grumpiness. I ask Deputy Bannon not to rise to the bait I have set because I am not as good as others at dealing with hecklers.
The Deputy should wait until the Mahon tribunal concludes its deliberations.
I was proud to listen to the contribution of the Minister for Finance, Deputy Cowen, when he introduced the budget. I applaud the Minister's efforts and I am glad he listened to people such as me. Deputy Michael Kennedy suggested that I am on the socialist wing of Fianna Fáil. I was not afraid to speak up for my beliefs on social inclusion policies at our parliamentary party meeting. I am strongly of the opinion that we should cater for those who are more vulnerable, particularly at times when the economy is facing challenges.
I do not wish to make too many political points but I am not going to take a lecture from those on the Opposition benches who do not remember — it does not suit them to do so — decisions taken in the past which led to people being deprived of money. During the period in question, benefit entitlements were so meagre that they made absolutely no impression. That is not to say I do not have ongoing concerns, of course I do. I see the challenges ahead and I am concerned about the future direction of pensions policy, which is an important matter. I would like the Minister for Social and Family Affairs, Deputy Cullen — he did a good job this week — to examine the position as regards back to school allowances, in respect of which further improvements could be made.
A number of individuals brought to my attention in recent days the fact that people who obtain good increases in their social welfare benefits are often ambushed by local authorities, which present with new rent assessments. Someone must grasp the nettle and take action in this regard.
Highlights of the budget include the changes to stamp duty, provisions to reward work, income tax changes and improvements relating to child care. The latter will provide supports for hard-working families. I welcome these various improvements.
The Minister referred to Tallaght and the Luas. His colleague, the Minister for Transport, Deputy Dempsey, mentioned the provision of almost €260 million in additional funding for public transport capital investment over the pre-budget outlook. He went on to point out that this funding will guarantee continued progress on expanding the Luas network. I strongly support this development. The extension of the existing tram fleet on the Tallaght line will be completed in mid-2008, bringing a 40% increase in passenger capacity per tram. As a Dubliner, I am pleased that construction will continue on the Cherrywood and Docklands extensions.
I must, however, challenge the Minister regarding the proposed building programme as far as construction on the Luas extension through Tallaght is concerned. As stated on previous occasions, the Luas is an absolute boon to my community because it brings many people to Tallaght and allows them to enjoy the great facilities there. However, as the Minister indicated, there appears to be a problem. I call on him to ensure there will be no delay in respect of the Luas extension through the estates of west Tallaght to Saggart and Citywest. I hope many colleagues will support me in this regard.
I could spend all day discussing with the Minister of State at the Department of Finance, Deputy Noel Ahern, who is present in the Chamber, the need for a new Garda station in Tallaght. I hope the Minister of State will not object to my mentioning this matter, in respect of which I have been strongly campaigning. Other colleagues in the House are not afraid to refer to their local communities and the priorities relating thereto, and I take this opportunity to do so as well.
Previous speakers criticised the Government's drugs policy. There will always be challenges to be faced in that regard. However, I am a strong supporter of the Minister of State at the Department of Community, Rural and Gaeltacht Affairs, Deputy Pat Carey. I was present in the Chamber last week when the Taoiseach took time out of his busy schedule to make a fine speech on the drugs policy. His doing so was a great compliment to the House and to the Minister of State, Deputy Pat Carey. It is important that Members should continue to inform the Government that drugs programmes should be properly funded. The drugs problem represents a challenge to all our communities and we should continue to fight against it.
I look forward to making a further and more comprehensive contribution in respect of the budget as part of the Second Stage debate on the Social Welfare Bill. I commend the resolution to the House and I will now concede the floor to my Independent colleague, Deputy Finian McGrath, who has some even more important announcements to make.
I welcome the opportunity to contribute to this important debate. One of the aims of the budget is to protect the vulnerable. This is also my political objective. Before discussing the details of the budget, I wish first to welcome the €2.5 million allocated in respect of cystic fibrosis services at Beaumont Hospital. I warmly welcome the additional support provided to patients and their families at the hospital, which is located in my constituency. This is a major step and I hope it marks the beginning of a process of developing cystic fibrosis services at other hospitals such as St. Vincent's. I will continue to fight in respect of the provision of such services.
My vision for the health service — I was subjected to a great deal of criticism in respect of it recently — revolves around reform and investment. The latter are the are key factors and I urge all Deputies to support the concept I am promoting.
In the discussions relating to my agreement with the Taoiseach, I raised the issue of disability and cancer services. I am glad that an additional €50 million is being provided in respect of the disability sector and that an extra €29 million is being allocated for cancer services. I also welcome the additional €25 million being provided in respect of care of the elderly. I raised these issues with the Government on previous occasions and I look forward to seeing more of the services to which I refer being rolled out during the next 12 to 18 months.
Since we are dealing with the budget and related health issues, I wish to challenge the misinformation emanating from some Deputies in respect of frontline services and the so-called HSE embargo. In my constituency, Dublin North Central, since 5 September 2007 a total of 117 new employees have been appointed by the HSE. The breakdown in respect of the posts taken up by these individuals is as follows: medical, 15; dental, one; nursing, 59; allied health professionals, 21; support service staff, four; administrative hospital-based staff, five; additional nursing, seven; additional health professionals, four; and extra allied health professional, one. When new staff are appointed or new services put in place, Deputies should tell the truth and stop misleading the public.
Perhaps the other Members to whom Deputy Finian McGrath refers have not had the same experience as him.
Since 5 September, 110 staff members have been appointed to frontline services — including care of the elderly and disability services — at Beaumont Hospital. These are the facts and they are provided by the HSE. When protecting the vulnerable, it is very important that we look at the details of the budget. It is important that Deputy Durkan pays attention to the issues in this budget. Despite the economic downturn, I see that the carer's allowance is up €14 per week and the carer's grant is increased to €1,700. An extra €1.1 billion is being spent on health, €50 million is being spent on the disability sector and €276 million extra is being spent when we add cancer services to elderly and disability services. Child benefit is up €6 per week. For example, families with two children under six will now get €6,148. That is a major step in the right direction and I commend the Minister on this. The big one is the €2.5 million for cystic fibrosis which will be rolled out in January. This goes some of the way towards building a more caring society. I look forward to other services being rolled out in the interests of patients.
In recent days, I have been in talks with individuals who were involved in building an independent hospital beside Beaumont Hospital. This project is worth €254 million.
That is co-location. The sell-out of the State.
The Deputy should listen. It is an independent hospital.
He is a recent convert to privatisation.
Deputy McGrath, without interruption.
I am sorry, but I just get upset about that.
This plan will include 170 inpatient beds in a high-tech facility, which will employ 510 people——
Which will result in the scaling down of the public health service. The Deputy should be ashamed of himself.
——and will complement the main hospital with extra support services on site and millions of euro for Beaumont Hospital. That is the reality. It is hoped to begin construction in May 2008 and that it will be open in 2010. This also means that 170 new beds will be freed up in Beaumont Hospital, but more importantly it will mean millions of euro going into the accident and emergency department to take the pressure off. That is the way we should go.
Will it take the pressure off the newly built hospital?
Section 9 of my agreement contains a measure on social and affordable housing. I welcome the €124 million for social housing and the €50 million for the affordable housing scheme. Some of these schemes will be rolled out and, as I speak, Deputy Durkan, work has begun in Coolock and Cromcastle.
Deputy McGrath should refer his remarks through the Chair rather than any individual Deputy and we might have fewer interruptions. Deputy Durkan should listen before he his called to speak.
If that animated action is going on in the Deputy's constituency, I would check it out tomorrow before it stops. I apologise to the Leas-Cheann Comhairle.
It is also refreshing to see the voluntary and community housing groups receiving €26 million. I support that as a major step in the right direction.
I accept that we have a long way to go in ensuring the maximum protection of the vulnerable, but this budget is a major start and I will do my best to push for developments in the interests of the people of Dublin North Central. It is an important budget because the objective is to protect the vulnerable. We now have the opportunity to deliver the services, but we also have a responsibility to ensure that when €50 million is allocated to people with disabilities, those services are rolled out and given to the families that need them. When €29 million is given to cancer services, we have a responsibility to ensure that these services are put in to support people with cancer. We must have accountability and this is linked into the debate about investment and reform in our health services. We must have reform and that has begun.
There is reform of a kind.
I welcome the appointment of Professor Tom Keane, who will get involved in the delivery of these services in the next two years. I urge Deputies to be sensible and to support such progressive developments. I am also delighted that Beaumont Hospital has been selected as one of the centres of excellence as this is a major statement for the north side of Dublin. I take on board some of the criticisms from people in other parts of the country who feel that they are being neglected. We should look at those cases again and I urge Professor Keane to support people in areas that might not necessarily have got what they wanted. We cannot have a situation where some areas of the country are ignored by these centres.
The carer's benefit of €14 per week and the carer's grant of €1,700 are very important, but the key issue is that even though there is a downturn in the economy, the Minister had the courage to go for €1.1 billion extra in the health services. This is an opportunity to support the development of our health services. I raised these issues and I have been banging on doors and tables for the past few years. The process has now begun and I welcome that. It is a major start and a step in the right direction. I urge all Deputies to support the sensible aspects of this budget.
Yesterday we had the carbon budget which was promised in the programme for Government. It consisted of a page and a half in total and it did not tell us anything we did not know already, or anything that could not have been highlighted in a primary school project on climate change. In his budget speech, the Minister for Finance stated that climate change targets required everybody to play a part and that the Government also had a part to play, as if the Government was a bit player in addressing climate change. That does not auger very well for his claim that by setting up the Cabinet Committee on Climate Change and Energy Security, the Government has put climate change at the heart of decision making.
Today's report from the Minister for the Environment, Heritage and Local Government was just a speech. It was a filler, the afterthought to the so-called carbon budget, and just a sop to the Green Party Deputies to make them feel included. It was part of the spin of an allegedly green budget, but not a very successful spin. The Minister stated that he particularly welcomed the strong defining theme in the Budget Statement highlighting the Government's environmental agenda. Deputy Gormley's speech largely highlighted how badly the Government is doing in reducing our emissions and tackling climate change. It was more an admission of failure of the green agenda than a new, greener dawn.
The Minister highlighted that we must buy carbon credits to meet the difference between Ireland's net carbon emissions and our Kyoto target. More than half the reduction in emissions will not be an actual reduction, but merely a piece of paper we will buy from somewhere else. The rest is largely accounted for by what are termed carbon sinks, namely, sinks eligible for accounting under Kyoto Protocol rules. Therefore, a minuscule amount of reductions will allegedly come through measures to reduce emissions. The Minister's speech confirms what was predicted in a European Commission report two weeks ago, which stated that our carbon reductions would be largely bought as opposed to achieved. How green is that in meeting our Kyoto targets?
A genuine commitment to tackling climate change would have involved the purchase of carbon credits as a last resort, as opposed to a mainstay in achieving our Kyoto targets. The Green Party is admitting defeat in the Minister's speech today on what surely should have driven a real carbon budget, which would deliver a real reduction in our carbon emissions. The Green Party has hitched itself to an incompetent Fianna Fáil and Progressive Democrats administration that has failed to invest in measures that would genuinely have achieved carbon emission reductions, such as investment in public transport and sustainable development. It is the fault of the Government that too much taxpayers' money will be spent on the purchase of carbon credits, with no improvement to the environment.
The Minister's speech largely highlighted the failures, including the fact that "last year greenhouse gas emissions from transport increased by over 5%, indicating the scale of the challenge in that sector". What an understatement. However, from the Minister's speech today and yesterday's budget it looks like business as usual. Instead of a commitment from the Minister for Finance to fast-track key public transport projects, we get regurgitated spin about projects announced many times over, for example, the Kildare line upgrade, originally supposed to have been completed in 2005. There was no commitment in the budget to the 500 extra buses needed in the short term to move more people in Dublin onto public transport as soon as possible.
There was no reference to the building of the interconnector from Heuston Station to Dublin city centre, a vital public transport project that would benefit suburban and intercity rail commuters. The Kildare route project, extra buses for Dublin Bus and the interconnector are all measures that should have been done years ago and still the Government is set to dither and delay significantly investing in our public transport. Rather than prioritising public transport, we get the very non-green approach of allocating almost two thirds of our budget for road building — €1.7 billion for roads out of €2.7 billion in total. So much for the Green Party's election promises to provide major investment in public transport.
Besides the admission by the Minister, Deputy Gormley, that our transport carbon emissions are going up, there is nothing in his speech about public transport. There is one green transport related measure in this budget, namely, the changes to the VRT regime to base VRT on the carbon dioxide emissions of cars. The motor tax changes in this budget represent regressive taxation and, as the Minister admitted yesterday, are merely a revenue raising measure. Its purpose is to make up somewhat for the shortfall in Government funding to local authorities under the budget. The Minister promises to make motor tax carbon dioxide rated at a later stage. Again, the assumption behind the motor tax and the VRT changes is that most people have no option but to use their cars, increasing carbon emissions, and we might as well tap them for some money for their trouble, namely, being stuck in traffic all day, while we are at it. The apparently green measures in this budget assume our continued dependence as a society on cars and acknowledge an abject failure to reduce our transport caused carbon emissions by giving people more public transport options.
The good news in the Minister's speech consists of rehashing previous announcements, including the draft building regulations on more energy efficient buildings and the continuation of the greener home scheme. These apparently environmentally friendly measures also signify the failure of the Green Party to achieve anything substantial in Government in its first budget. One of the first decisions by the Minister for Communications, Energy and Natural Resources was to slash the amounts available under the greener homes scheme for individuals installing more environmentally friendly heating systems in their homes. Before the Green Party was in Government, a home owner could apply for €4,200 for a biomass boiler. Instead of increasing that, the Green Party in Government reduced the amount to €3,000. That is a failure by the Green Party in Government. The people who would apply for this grant want to change to a more environmentally friendly heating system. How could a Green Party Minister stand over a reduction in the grants to those who want to play their part in reducing the emissions?
The draft building regulations will not be worth the paper they are written on if we continue with the laissez-faire approach of the Government to compliance with building regulations. Deputy Sargent said to the Taoiseach in the Dáil this February:
I refer to two articles, one from The Sunday Tribune and the other from a construction magazine, Construct Ireland, stating that less then 2% of all houses comply with Part L of the Building Regulations 1997. This follows a survey conducted by Sustainable Energy Ireland, which has not been published even though it was carried out in 2005.
That is some context for the Minister, Deputy Gormley's self praise about his introduction of the draft building regulations. The problem is these regulations operate under a system of self-certified compliance by architects employed by the builders who only get to inspect in a very superficial way whether the building regulations are being complied with. Like the existing building regulations, the proposed new building regulations will be no guarantee that our buildings will have the theoretical level of energy efficiency in practice. Will there be any significant compliance with the regulations unless they are backed up by significant levels of inspection by local authorities and the Department of the Environment, Heritage and Local Government?
A very basic level of alternative heating system is required under the proposed regulations, for example, a wood pellet stove. With the high cost and difficulty in getting wood pellets, what hope is there that hard pressed home buyers will use these heating systems and will not instead opt to use the gas heating systems that will almost certainly also be installed in most of the homes built under these new regulations? This brings me back to the minuscule carbon emission reductions that are predicted in the Minister's emissions table. Is it at all probable that in practice the draft building regulations and the VRT changes will lead to the reductions in emissions predicted by the Minister? Is it more likely that this prediction will have to be adjusted downwards and the amount to be spent on carbon credit purchase revised upwards?
There was no reference in the Minister, Deputy Gormley's speech to the role of waste management in reducing emissions. Was that because the budget provided no increase in money available under the environment subheading for recycling services? How can we, as the Minister suggests, "achieve the annual reduction on average between now and 2012" and "need to purchase only a million carbon credits on average each year" with the approach taken in this first so called "carbon budget"? It is obvious from the Minister's speech that this is only aspirational and he has no intention of making such targets legally binding. He said that "this year's budget is a significant first step". Obviously it is not. Where are the specifics about how we are going to actually reduce our emissions and by how much? Where is the programme for reducing emissions Department by Department? Where are the requirements of local authorities to reduce emissions at local and regional level? Where is the legislation needed to make these targets more than just aspirational? The extra funding for the EPA is welcome but what about the need to properly fund and resource local authorities in their role in environmental protection and mitigating and adapting to climate change?
One does not need a Cabinet committee on climate change and energy security to tell one that public transport projects should be fast-tracked to reduce our transport emissions. It is obvious that we cannot continue with urban sprawl and unsustainable rezonings if we want to reduce our carbon footprint, yet the Government is blindly ignoring this fact, conveniently for Fianna Fáil's developer friends. So called carbon reports and carbon budgets are merely cosmetic unless we make real changes in Ireland, such as vastly improving our public transport sector and more responsible planning of residential communities that will be more energy efficient.
On paper, the Green Party seems to have got very little in the programme for Government, and so far in practice with the so called "carbon budget" it seems even less. It has adopted the Fianna Fáil pose of being seen to do things by opening conferences and launching reviews, reports and awareness campaigns, although I should say advertising campaigns. Meanwhile, Ireland continues unabated as one of the worst offenders in terms of non-compliance with EU environmental legislation. With today's speech from the Minister for the Environment, Heritage and Local Government, it seems the Green Party has given up on reducing our carbon emissions, instead having to buy our way to our Kyoto targets.
In February Senator Dan Boyle, as a then Deputy, said the Carbon Fund Bill:
. . . was an illustration of the hollowness of the Government's policies towards the environment. It underlines the empty rhetoric in which the Government engages, in terms of indulging in "green speak" and not undertaking one inch of green action.
The shoe is on the other foot now. The Government still indulges in "green speak" but has the Greens to do so for it.
I propose to share time with Deputies Michael McGrath and Cyprian Brady, with the permission of the House.
Tá an-áthas orm labhairt anseo ar son na cáinfhaisnéise a chur an Tánaiste le chéile inné. Tá cruth maith ar an ngeilleagar a bhfuil again inniu in Éirinn. Níl an geilleagear ag fás chomh tapaidh is a bhí sé cheana ach tá sé fós ag fás, agus go tapaidh má dhéantar comparáid le tíortha eile cóngarach linn. Tá cuspóirí an Tánaiste le feiceáil ins an gcáinfhaisnéis. Tá orainn infheistíocht a dhéanamh don todhchaí, an bhochtaineacht a laghdú, fiontar a chothú, obair a chúiteamh agus, go háirithe, an chomhshaol a chaomhnú agus a sabháil.
Chun an bhochtaineacht a laghdú agus daoine inleonta a chabhrú, feicimid, mar shampla, méadú de 17% ar chreidmheas cánach do churamóirí. Feicimid méaduithe suntasacha ar an réimse leathan do leasa sóisialta, freisin, agus tá go leor samplaí eile ann. Chun obair a chur chun cinn, feicimid go ndearna an Tánaiste cinnte de go gcoinneofar daoine ar phá íseal ó cháin ioncaim ar chor ar bith. Bainfear 39,000 díobh siúd as an eanga cánach, coinneofar daoine ar mheánphá as an ráta ard cánach agus tá na rudaí sin an-tábhachtach don méid mór daoine. Tá an obair seo ag dul chun cinn os rud é gur leathnaigh an Tánaiste na bandaí cánacha tríd na réimsí go léir. Aontaím le seo.
Thacaigh an Tánaiste le húineirí agus ceannaitheoirí tithe agus leis an tionscal tithíochta inné, agus tá an tionscal sin an-tábhachtach don tír seo. Bhí lucht an Fhreasúra ag cáineadh ár bpolasaí maidir le dleacht stampa i rith na mbliana seo agus is deacair a thuiscint cén fáth atá siad á gcáineadh anois, go háirithe nuair a bhfuil an Tánaiste ag gníomh ag an am ceart agus nuair atá an margadh ag lorg cabhair. Is féidir comparáid a dhéanamh leis an mbliain seo caite nuair a bhí an baol ann go gcuideodh athrú mar seo le boilsciú phraghais tithe. Feicfear i mo thuairimse, gur Tánaiste ciallmhar agus críonna a bhfuil ann.
Measaim gurb é an rud is tábhachtaí maidir leis an athstructurú seo maidir le dleacht stampa ná go bhfuil an córas i bhfad níos simplí. Feicimid an t-am ar fad nuair a bhíonn córas cáin níos simplí go mbíonn fonn ar níos mó daoine é a íoc. Beidh sé éasca an dleacht stampa a thuiscint anois agus cabhróidh sé seo le daoine atá ag iarraidh tithe a cheannach agus leis an margadh go ginearálta.
Nuair atá rátaí úis níos airde ná mar a bhí siad le cúpla bliain anuas, agus leis an gcumhacht sin chun rátaí úis a árdú nó a ísliú anois imithe go dtí an Eoraip, lenár gceadúnas caithfear a rá, tá sé an-tábhactach go gcabhródh an Tánaiste le daoine ar nós mé féin, caithfidh mé a admháil, a bhfuil ag íoc ar ais morgáistí móra. Tá mórán daoine óga ins an dtreo sin. Feicimid méadú mór ar an uasteorainn faoiseamh úis ar mhortgáiste do chéad-cheannaithóirí. Tá a lán céad-ceannaitheoirí i mo dháilcheantair fhéin agus beidh an-áthas orthu go léir. Beidh an-mheas acu ar an dTánaiste mar gheall air.
Molaim go háirithe freisin méadu sa phinsin Stáit. Is é seo an chéad méadú a bhfaighidh pinsineoirí idir seo agus an chéad olltoghcháin eile agus tá siad go léir ag súil leis an €300 sa tseachtain a mbeidh siad ag baint úsáid as.
Maidir le caiteachas, molaim go mór an méadú d'oideachas ach aithním go mbeidh brú mór ar an Aire Oideachais agus Eolaíochta maidir le scoileanna nua sna ceantair ar nós mo cheantair fhéin atá ag méadú go tapaidh. Beidh scuaine mór ó mo cheantar fhéin ag súil le deá-sceal on Aire maidir le foirgnimh nua go luath.
Maidir leis an dtimpeallacht agus an gcomhshaol, aithním gurb é seo an chéad bhuiséad carbóineach agus is lá tábhachtach é mar gheall ar seo. Molaim obair an Taoisigh i leith na timpeallachta le fada an lá.
I shall speak in English as regards VAT and property because this is too complicated to try to translate into Irish.
Do not encourage me.
I shall just speak briefly on this. I have worked as solicitor — not in Walkinstown, I should say. In the relatively small number of commercial transactions I have been involved in, an inordinate amount of time was spent on VAT on property. It raises costs and wastes too much time. Although not specifically mentioned in the Budget Statement, the proposed new regime that will be in the Finance Act is part of the budget documentation and, as such, it is appropriate to comment. I cannot say I fully understood the old system or that I have studied the new system in depth. Anything that will simplify the system of VAT on commercial property and on residential property in some cases, however, will have an enormous impact and reduce professional service costs for solicitors and accountants. In my experience, solicitors ring accountants who ring back and vice versa. Nobody knows where he or she is going much of the time with VAT on property. We often end up ringing the Revenue Commissioners asking for an opinion and that is wasteful of their time too.
I commend the Tánaiste on the review that has taken place. There has been much consultation on VAT on property between the Revenue Commissioners and the Department of Finance and the various professions involved. This is very important because it has driven up costs unnecessarily.
I very much welcome the opportunity to speak on the 2008 budget. At the outset it is important to understand the context of the budget, in particular given the incessant negative commentary we have had in recent weeks about the performance of the economy. It is important to take an objective look at the facts and examine the performance of the economy and the state of the national finances as we come to the end of the 2007 calendar year.
In 2007 growth in gross domestic product will be in the region of 4.75%. Over the past decade we have had rapid growth in GDP. Not alone have we maintained the level of that output, we again have increased it by almost 5% in 2007. Year on year we are breaking new barriers and continue to make further progress in economic performance. We generated an additional 72,000 jobs in 2007, quite a remarkable performance for an economy of this size. I also commend the Minister on that. I am especially pleased he is prioritising investment on the capital side in the context of the implementation of the national development plan, with a 12% increase over 2007 figures in the allocation to the capital side of the budget. It is important we continue to invest in the development of infrastructure and projects that will deliver benefits throughout the country over the years ahead and put us in a strong position to maintain sustainable and prudent economic growth.
On the current side, spending will increase by 8%. Despite all the talk of cutbacks and deficits, we are increasing expenditure on the current side by that percentage, and by any measure across the OECD, that is a significant increase. Based on those points the Minister can genuinely argue that the fundamentals of the economy are strong and this is irrefutable. Most developed countries in the world would grab the performance we have achieved in recent years and would be delighted to be in the position Ireland is in currently as regards national finances. Growth will moderate further in 2008, but GDP will increase by 3% in real terms. We will create a further 24,000 jobs and inflation will moderate to around 2.4%.
I noted with interest some of the earlier comments about the national debt and our borrowing a further €5 billion in 2008. It is very important we consider what this means. Many Opposition Deputies have expressed concern about borrowing, but the level of a country's debt cannot be measured in absolute terms. The value of the figure in absolute terms is not a real measure of debt. It must be measured as a percentage of the country's output, better known as its GDP. The debt-GDP ratio in Ireland in 2008 will be in the region of 26%. When I looked at the comparators across Europe I found that Ireland was in a very strong position. In 1997 the debt-GDP ratio was 64% while in 2008 it will be less than 26%, which is a dramatic improvement. Having reviewed the NTMA report and examined Eurostat figures, Ireland is in an extremely strong position vis-à-vis our European partners, with a debt to GDP ratio which is less than half the EU average. This is significant. Next week, I hope to speak on the Social Welfare Bill and to welcome many of the initiatives the Minister will introduce.
As Deputy Mansergh did earlier, I welcome the allocation of €914 million towards overseas development aid in 2008. This places a major obligation on us to ensure the money is properly invested. A country of our size spending approximately €1 billion on overseas aid is a tremendous achievement and we are well on the way to achieving our overall targets.
In the coming weeks, the Minister will give consideration to the detailed measures of the Finance Bill 2008. I ask the Minister to give serious consideration to the inclusion of tax incentives for the Cork docklands project. Cork City Council and the Cork Chamber of Commerce have submitted a proposal which is in line with EU approval for these incentives. It is a project of regional significance and is in line with our overall gateway strategy. It will help to continue to regenerate Cork city in a positive way.
I welcome the changes in stamp duty introduced by the Tánaiste and Minister for Finance in yesterday's budget. It is an appropriate time to introduce stamp duty reform as can be seen if one examines the impact it will have on couples in particular who wish to trade up and families who need extra bedrooms. Taking the example of a couple buying a house for €500,000, which is not a large amount of money in many parts of the country in terms of property, under the old regime they would have paid €37,000 on stamp duty. The changes implemented yesterday will reduce this liability to €26,250, a reduction of €11,250. This will generate further activity and buoyancy in the market at a time when nobody will deny it is needed. The Minister's intervention is timely, measured and appropriate. I also welcome the significant improvements in mortgage interest relief. The relief has been increased to €20,000 per annum for a couple. This will make a difference of more than €300 every month.
The increased spend allocated to the Department of Education and Science is to be welcomed, particularly in the context of the primary school building and modernisation programme. I note from the Minister's comments yesterday that the emphasis in 2008 will be on the provision of places in rapidly developing areas throughout the country. My constituency has a number of such areas, particularly Carrigaline and Passage West which are undergoing dramatic development and population expansion and where new school places will be required. The 28% increase in the capital envelope on the primary school side for 2008 gives great hope to communities such as Carrigaline and Passage West that projects in these areas will advance through the building and modernisation programme in 2008.
It would be remiss of us not to acknowledge the tremendous progress achieved in the area of income tax since we came into Government in 1997. I am pleased to see the Minister will continue with this progress in 2008. When one examines the tables in the budget publication one sees the improvements are stark. In 1997, the effective tax rate for a person earning €40,000 in today's terms was approximately 41%. It is now less than half of this at 18.6%. This is a dramatic improvement. While the progress made in the budget might have been less dramatic than in previous budgets it keeps pace with inflation and gives real improvements to people.
Taking the example of a married couple with one income and two children, if the household income in 1997 was €60,000 in today's terms, the effective tax rate would be 36%. In 2008, these changes and progress over the past ten years mean this rate is reduced to just under 20%. These are dramatic improvements in take home pay and allow families to choose how to spend their income and rewards work. This is to be welcomed.
I welcome the many pro-business initiatives in the budget, particularly in the areas of science, technology and innovation. The research allocation of approximately €300 million in 2008 will provide tremendous opportunities for this country to position itself as a leading nation throughout the OECD in terms of investment in science, technology and innovation. This investment will yield a high dividend for the country in the years ahead. I commend the Minister on his ongoing commitment to invest in science, technology and innovation in the State.
The improvements to the research and development tax credit are also to be welcomed. Yesterday, the Minister agreed the base year used to calculate expenditure on research and development is being fixed at 2003 for a further four years to 2013. This will give greater capacity for research and development investment throughout the country. Many companies and organisations will benefit in the long term from this.
The linking of VRT to emission levels is to be welcomed. The Minister for the Environment, Heritage and Local Government, Deputy Gormley, made further announcements today with regard to the carbon budget. This is an important initiative. Much public comment has been made in recent months on the importance of the climate change issue and the significance of it for mankind. The fact cannot be disputed that it must become the most significant political issue in the years ahead. Every citizen of the State, all political parties and all groups and organisations throughout the country have a role to play. While Ireland is a small piece in the jigsaw which can only do what it can, we must play our part in tackling climate change and ensuring the future of the planet is secure for the generations to come. I commend the Minister for the Environment, Heritage and Local Government, Deputy Gormley, on the significant initiatives he has taken.
Many improvements have been made with regard to compliance of small and medium businesses with the Revenue Commissioners and the taxation regime to reduce the administrative burden and bureaucracy and provide them with greater flexibility. This is important, as is the Minister's announcement that the small company tax liability threshold for the payment of preliminary tax on the simpler prior year basis will be increased to €200,000 from €150,000 and the threshold for new start-up companies at or below which they do not have to pay preliminary tax in their first accounting year will be increased from €150,000 to €200,000. As my colleague, Deputy Byrne, stated, the small business VAT registration threshold will be increased further from €35,000 per annum for services and €70,000 for goods to €37,500 and €75,000 respectively from 1 May 2008.
As someone with eight years' experience serving in local government, I welcome the fact that local government will benefit significantly from yesterday's budget. While every motorist in the country will experience pain from the increases in motor tax, it is essential that we invest greater resources in local government. The interaction the vast majority of the public has with Government is through the local government system. The roads on which they drive, the footpaths they walk, the facilities their children have in terms of playgrounds, amenities, water services and waste water services are essential facilities provided by local government.