The Leader of Fianna Fáil, Deputy Micheál Martin, has three minutes. I ask all Members to observe the limit of three minutes.

Last week, I met a parent on the doorstep in Tallaght and asked her about her basic issues. Immediately, she revealed her main concern was the significant burden and cost education was placing on the household budget, which admittedly was limited. I refer to the pressure owing to her children going back to school. More important, the pressure of paying a voluntary subscription to the school was real because it was made clear that failure to do so would mean her children would not gain access to textbooks and materials centrally procured by the school. The subscription had to be paid up front by the parent.

This illustrates that the ongoing cost of education and going back to school is genuinely growing. Schools have little choice but to raise funds voluntarily. We know from the Grant Thornton report of last February that the average Government allocation to schools for operating costs, amounting to €46,000 per year, does not cover the average expenditure, which is approximately €91,000. Lighting, cleaning, heating, insurance, equipment and printing add to the costs and increase the expenditure when running a school. Small and medium-sized schools suffer even more. DEIS schools, or disadvantaged schools, because they do not have the capacity to raise money, are particularly disadvantaged. They cannot fundraise.

The Oireachtas education committee, under the chairmanship of Deputy Fiona O'Loughlin, held valuable hearings in August on this subject. The Catholic Primary Schools Management Association made a presentation to the committee and stated unequivocally that the current model is unsustainable. It stated the issue is urgent and that many schools are running out of contingency funds and are running deficits. The chief executive officer of the Irish League of Credit Unions, Mr. Ed Farrell, told the committee that the league's annual back-to-school survey results showed a rise in the number of parents in debt due to back-to-school-related costs. Well over one third of parents in Ireland said they were getting into debt to cover back-to-school costs. In particular, the credit unions were worried about the prevalence of moneylenders and the degree to which they are giving loans to parents to try to get through this difficult period. Some 46% of parents said that the cost of going back to school was their biggest worry, and 67% said it represented a significant financial burden. Four in ten said they would not be in a position to afford new shoes for their children, while seven in ten said extracurricular activities would have to be cut.

One of the most effective ways to deal with this, among a number of measures, is to accept that the existing capitation grant is wholly inadequate to fund primary schools, particularly the small and medium-sized schools and DEIS schools. Does the Taoiseach accept that? Does he agree this must be a budget priority and that provision must be made for an increased capitation grant in the forthcoming budget, with a commitment to phased increases in subsequent budgets to try to reduce the pressure on parents who find their children's return to school presents a great difficulty?

I thank the Deputy for raising this important matter. It is raised very much in my engagement with parents as I go around the country and on the occasions on which I knock on doors. The cost of education can be an enormous burden on families. Often, these are the same families who bear the high costs of childcare, school transport and, in some cases, rising rents or a large mortgage.

Increasing capitation grants for next year is, of course, a budgetary matter. No budget decisions have been made as yet but I know it is a priority that Fianna Fáil has raised in negotiations with us on the budget. In the letter I wrote to the Deputy last month suggesting that we continue the confidence and supply arrangement through to 2020, I specifically listed this matter as one that should be included as part of a future arrangement, should Fianna Fáil choose to continue the confidence and supply agreement through to the summer of 2020, as I proposed. It is also included in the programme for Government.

It is always necessary to prioritise. We have a budget of €10 billion this year for education. It is the largest budget for education in the history of the State. That is making a difference. It means we have hired 5,000 more teachers in the past two years. It means we are building new schools all over the country and extending schools. It means we are developing technological universities, in Dublin and hopefully soon in the south east. It means we have more special needs assistants than we ever had in our education service. It means the pupil-teacher ratio this September is the lowest ever for children attending primary school. Therefore, we can see how the massive investment in education is making a real difference for children, their teachers and families.

I acknowledge that, because we had to focus on other areas, we have not been able to increase capitation. It is under consideration for this budget but Deputies should bear in mind that there are always competing priorities. Even the wealthiest countries have limited budgets and we have to prioritise within them.

Prioritisation is an important issue. When the population increases, we will have more teachers. Generally, because of the significant growth the number of children going to primary schools in recent years, there is a need for additional teachers because of the pupil-teacher ratio. That is a matter of fact; that happens. What has not increased in recent years in any shape or form, however, is the capitation grant. The cost of living is affecting people. Many parents who have children going back to school face higher costs. These individuals are not entitled to the back-to-school allowance or anything like that. They face a higher cost than others in society. Priorities, therefore, have to be targeted and focused. It is clear from all the evidence given to the Oireachtas education committee in August that schools are the end of their tether and are running deficits. Parents are under particular pressure. It is embarrassing for them if they cannot pay. The children come back from school and say the principal is saying they have to pay the voluntary subscription. If we were honest about it, we would say it is not voluntary. There is great pressure on parents to cough up.

Along with an increase in the capitation grant there must be a restatement of the guidelines around that. Children are conscious of it. When I spoke to the mother concerned the children were in her presence as she told the story. It is a story many Deputies have heard. There must be an acknowledgement that the cost of living is a key issue and that giving tax cuts to the wealthy alone does not deal with it in a significant or substantive way.

I can assure the Deputy that, as was the case in the last couple of budgets, we will not be giving tax cuts to the wealthy alone. Tax cuts will be focused on those with middle incomes. We have already taken people on the lowest incomes out of the tax net altogether and we have relieved them of the burden of the USC, which Fianna Fáil imposed on them. Some 38% of the lowest earners do not pay any income tax. Now the focus will be on those on middle incomes. People on modest incomes of approximately €40,000 pay the highest rate of income tax on some of their income. We believe that is unfair. We stand over our policy of taking the lowest paid out of the tax net altogether and now focusing on those on middle incomes. I will defend that to the hilt because it is the right thing to do.

The Deputy is correct that the population has grown, and spending must increase in line with population growth. However, we have done better than that. If spending had only grown in line with demographics the pupil-teacher ratio would have stayed the same, but we have improved on that. That is why we have the lowest pupil-teacher ratio ever this September. There are also more resource teachers, 500 new guidance counsellors, 500 deputy principals to give schools better management, as well as junior cycle reform. In terms of prioritisation, we wish to prioritise the families who are struggling the most. We have reversed some of the cutbacks to the back to school clothing and footwear allowance that were imposed by the Deputy's party in government. We have not fully reversed the cuts but we are getting there in that regard. I have also introduced the school books scheme which has been of value to parents and we are expanding the school meals programme, which is very important particularly in DEIS schools.