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Seanad
‹ Order of Business

Budget fairness and economic policy

Summary

Opposition Senators criticise the budget’s employment schemes, housing and NAMA measures, arguing that it burdens poorer people while offering limited support to businesses. Government Senators defend it as fair and growth-oriented, highlighting job creation, social protection and efficiencies in health spending; the exchange includes calls for a fuller budget debate.

We have heard a good deal today about the benefits for employment creation in this budget but let us consider some of the specifics. When the retention of the 9% VAT rate is removed, there is very little left. The start-your-own-business scheme provides an income tax exemption of €40,000 per annum for unemployed people who have been unemployed for at least 15 months and who somehow rack up a tax bill of €40,000 in the following year. I wish them the best of luck but I would say they will be few and far between. That is worth €1 million. It will apply to a very small number of people. There is another €1 million allocated in respect of the employment and investment incentive. We should not forget that these provisions are tax breaks that will be taken up by wealthy people. Film relief of €15 million will be given to large film companies. Some €20 million will be allocated for the Living City initiative. That funding should be shared around other towns other than those listed in the budget. The provision is essentially for very wealthy people to live in fine residential properties in our cities. There is an allocation of €20 million between now and 2018 in respect of capital gains tax entrepreneurial relief. Some €1 million has been allocated for capital gains tax retirement relief. All the job incentives being lauded here and the talk of small businesses benefiting from them are small pickings compared to the hardship being expended and that has been caused to many ordinary families around the country.

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Paddy Burke An Cathaoirleach Fine Gael

Allow Deputy Byrne to continue without interruption.

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Some 500 houses will be built or renovated in local authority estates this year. That is welcome but it is necessary because any of us who walk into local authority housing estates will know that many of them are boarded up waiting for funding. I suspect those targeted 500 houses will not even cover the number of houses boarded up throughout the country.

An important point was raised by the leader of my party in the Seanad yesterday. Some €2 billion in finances is being allocated by NAMA to purchasers of commercial property in this country. Why are we giving them a break? Why do we not give the ordinary home owner a break? At the time this is being done the Government is fiddling around with local authority houses and abolishing the mortgage interest supplement. That is a dichotomy that is at the heart of matters. I remind the Labour Party Members that this a Fine Gael budget because Fine Gael has got everything that it wants. It got the €3.1 billion, and congratulations to Fine Gael on that-----

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Paddy Burke An Cathaoirleach Fine Gael

Has the Senator a question for the Leader?

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I want to talk about fairness and to have a debate on fairness. The Government issued a leaflet on fairness in budgets yesterday. Again this year, the only way it could stack up the fairness claim was to include the Fianna Fáil budgets going back to 2008 or 2009. In its leaflet, it proudly boasted about how fair the budgets were from 2009 to the present because that is the only way it can add up the sums having regard to fairness. The reality is that this Government's budgets have hit the poorest hardest and have let the rich away scot free.

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I am sorry to hear that my good friend, the leader of the Opposition, Senator Darragh O'Brien, is troubled by aspects of this budget. I thought it was a very fair and equitable measure designed to grow the economy is the fairest way possible. Given our economic circumstances, I will not go over what happened in the recent past or remind the Senator about the sins of omission and so on.

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The Fine Gael-led Government is boasting about Fianna Fáil budgets in its leaflet on fairness on its website. I do not know if the Senator got a copy of that?

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I do not follow what the Deputy is saying.

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Paddy Burke An Cathaoirleach Fine Gael

Has the Senator a question for the Leader?

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Of course I have. Given our economic circumstances, this is a very fair measure overall.

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We are talking about the budget. Senator Byrne is reading too much into his good constituency colleague, the Minister, Deputy Reilly-----

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Paddy Burke An Cathaoirleach Fine Gael

Has the Senator a question for the Leader?

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-----and the absence of some details which, I have no doubt, will follow in due course.

I want to do something special, I want to welcome the contribution of a man Members opposite much like to malign and criticise, although in fairness to Senator Darragh O'Brien, he has praised the Minister, Deputy Hogan. Like him, I look forward to his announcement today regarding the pyrite repair scheme. He has done sterling work in regard to Priory Hall, pyrite issues and the plans we know are in the pipeline. I should end on that happy note. We are in agreement on that.

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As a Fianna Fáil man, I welcome the retention of the 9% VAT rate. I advise Senator Harte that it was not I who had that conversation with him. People welcome what is good about the budget. I spoke, on our party's behalf yesterday, and began by acknowledging the good measures. I must agree with a point mentioned by Senator Byrne and also mentioned last night. In the context of the back to work scheme, the analogy I gave last night was that one might as well tell the head of the national lottery to give the winning lottery numbers to the first person to come in with both parents over the age of 105; I predict nobody will qualify for that particular scheme and that an additional €1 million will be saved.

The leader of the Opposition, Senator Darragh O'Brien, mentioned the unique situation regarding health where again an unfortunate number, the number of the beast being €666 million, is predicted to be saved in health and we do not know where any of these cuts are set to fall. That is a matter of concern. I would like Leader to arrange for an early debate on that matter because there are grave concerns about it throughout country. What will these cuts mean? Will there be hospital closures? We have had a budget overrun of nigh on €200 million and now another €666 million is needed and at the same time the Government is able to roll out medical cards for Michael O'Leary's children. There is concern about these issues.

I ask that the Minister for Education and Skills would come to the House because, in respect of third level education, €25 million in savings is earmarked from what the Minister described in his Budget Statement yesterday as the positive cash balances of certain institutes throughout the country. Does that mean that if an institute of technology or a university has managed to secure additional income streams of its own, has been prudent with the resources, saved money and is financing a strategic plan or a capital programme, such as Sligo Institute of Technology, its own strategic plan will be put in jeopardy because it may have resources saved over the years to finance its own capital expenditure? By contrast, the institute in Waterford in the Leader's county needs an additional €10 million that was given to it this year.

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I never worry about Labour's fortunes when I hear us being attacked by Fianna Fáil.

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We do not mention them at all.

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The real Labour Party.

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I has been very noteworthy that over the last two days we have been subject of Fianna Fáil ire. I will rest easy tonight knowing that the Labour Party is definitely on the up.

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We were never at 6%.

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Senator Darragh Byrne asked a very interesting question, namely, what was the Labour Party's contribution to this budget? Its contribution was the fact that there are €2.5 billion in cuts as opposed to €3.1 billion.

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It is €3.1 billion.

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The Labour Party's contribution-----

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The Senator has not read the Minister's Budget Statement yesterday.

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-----is the fact that there is no cut to the basic rates of social welfare. There has been no increase in the universal social charge. There have been many measures in this budget-----

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-----to protect the weak and the most vulnerable. That is Labour's contribution to this budget.

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Paddy Burke An Cathaoirleach Fine Gael

Senator Hayden to continue without interruption. Has the Senator a question for the Leader?

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I call for a debate on this budget. A number of issues were raised last night in statements but we have all had more of an opportunity to digest the budget and its contents and it would be very helpful if we had a more considered debate. A good point was raised by Senator Byrne yesterday in terms of the Living City initiative and he suggested that would-be cities like Drogheda and Dundalk should be included in this initiative. I support him on that. From my perspective, I very much welcome the safeguarding of the homeless budget. However, I am concerned that the home renovation initiative, which will provide a tax credit to homeowners who carry renovations, does not include, for example, rented properties. Four out of ten people in Ireland are living in rented properties, particularly in urban areas. I am concerned about matters of fuel poverty and poor standards in rented housing. I would like to see this type of initiative extended to people in rented housing. I would like if we could have a further debate on the specifics of the budget.

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It is important to put on record that last week I and other colleagues pleaded with the Government not to increase the VAT rate from 9% to 13.5% and I am glad it listened to us. As my colleague, Senator Byrne said, other than that, there is very little in the budget for small and medium sized businesses. Some issues covered in the publication, budget 2014, are farcical, one being the trade finance initiative.

The document states, "Work with the European Investment Bank (EIB) in developing a tailored and customised trade finance initiative to support the growth of the export sector." These are the words of the measly bureaucrats in the Department of Jobs, Enterprise and Innovation. They amount to a cover-up, if I may say so. There is no promise of when this will happen other than a reference to discussions and there is no timeline of delivery. It is just hot air and it means nothing.

I wish to put on the record this morning that I would like the Minister for Jobs, Enterprise and Innovation to let us know why he has reduced the budget for Enterprise Ireland. As a small open economy we are totally exposed to trade with other countries. The only way we can earn any income to support the economy is to grow companies that export, but the budget for Enterprise Ireland is significantly down. The devil is in the detail and one must spend time looking at the figures to see what in reality is happening.

The other issue which we should have a debate in the House is the other cut in Enterprise Ireland. The level of staff is down by 16% since 2009. We are dependent on the entrepreneurial staff in Enterprise Ireland - they are certainly that, indeed they are missionaries. We cannot be totally dependent on foreign direct investment or multinationals. We must develop our own indigenous industries. This trade finance initiative is a farce and it is pathetic. The devil is in the detail and the budget for Enterprise Ireland is significantly down.

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I have listened to those in the Opposition this morning and if there was a degree course in negativity they would all get A1 grades.

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We were listening to it for long enough.

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I remind those in Fianna Fáil that in its final three years in government, 7,000 jobs were lost per month. We are now creating 3,000 per month. That is positive and is the way forward. This budget plans to increase that number to over 45,000 jobs per annum and that is what we intend doing.

I wish to comment on the health budget because it is an important issue. When people talk about cuts in the budget they are automatically talking about cuts in services. One of the things we must do in the health budget is create efficiency. One of the problems I have with the health budget at the moment is that of the €13.3 billion total, over €3.4 billion is going out to agencies which are not under the control of the HSE. I have received several calls during the past two to three months from people in respect of these organisations. In one case I was told that a chief executive is earning €340,000 per year in an organisation where there have been no changes made in real terms, whereas all HSE staff were asked to take pay cuts. That is something I want examined. I have the matter before the Joint Committee on Health and Children scheduled for tomorrow morning. This is one area we need to start looking at to ensure we are getting value for money from the organisations to which we are paying out over €3.4 billion from the health budget. It is true that they are providing a very good service but I want to ensure that we are getting value for money. I am keen to ensure that taxpayers' money is used in a proper way and this is something that this budget is, hopefully, able to achieve.

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To take €2.5 billion out of the economy in tax and expenditure savings is a very difficult task. To find €1.6 billion in expenditure cuts has also presented difficulties. I suppose it is the job of those in the Opposition to oppose policies by the Government but I wish they could do it with a little honesty. I do not say fairly because we do not expect fairness from the Opposition but we do expect a little honesty from time to time.

I will quote from the Fianna Fáil national recovery plan for 2014. This would be the budget those in Fianna Fáil would introduce if they were in power today - thank God they are not. The national recovery plan from Fianna Fáil proposes to take €1.5 billion out of the social protection budget for 2014. Yet, the entire budget savings in expenditure amounts to €1.5 billion. Fianna Fáil would do it at a stroke and decimate our public services. Yet its party members come to the House this morning with their hang-dog faces shouting about fairness and care for those most vulnerable in our society. We could argue over different things in the budget but if someone criticises a particular measure and that person was in a position to be able to actually do something about it but did not do it, then I contend that amounts to a gross and crass hypocrisy.

Unfortunately, we have found it necessary to reduce jobseeker's allowance for those under 25 years of age but we have created places in training and education, where these people should be. We have reduced one payment to €100 per week. Those in Sinn Féin have been the most vocally critical about this. I point out that where Sinn Féin is in government, in the North, and always has been, the same allowance is actually €67 per week. When people from Sinn Féin come to the House and criticise the €100 per week payment when they are in a position to do something about it in the North but do not, it amounts to hypocrisy.

I call on the Leader to organise a debate on mental health. I welcome the €20 million increase in spending for mental health community development. I call on the Leader to arrange for the Minister of State, Deputy Kathleen Lynch, to come to the House to discuss the best use of that resource.

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