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					Vol. 663                                                                        Wednesday,
No. 4                                                                         15 October 2008

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                         DAIL EIREANN
           TUAIRISC OIFIGIUIL—Neamhcheartaithe

                   (OFFICIAL REPORT—Unrevised)

                                        Wednesday, 15 October 2008.

Leaders’ Questions     …      …     …        …     …    …     …       …   …    …   …   …    725
Financial Resolutions 2009
    Financial Resolution No. 15 (General)   (resumed)   …     …       …   …    …   …   …    734
Adjournment Debate Matters …        …        …      …   …     …       …   …    …   …   …    788
Financial Resolutions 2009
    Financial Resolution No. 15 (General)   (resumed)   …     …       …   …    …   …   …    789
Adjournment Debate
    Cork Cystic Fibrosis Services   …        …     …    …     …       …   …    …   …   …    855
    School Staffing    …      …     …        …     …    …     …       …   …    …   …   …    857
    School Building Projects …      …        …     …    …     …       …   …    …   …   …    858
    Sports Funding     …      …     …        …     …    …     …       …   …    …   …   …    860
Questions: Written Answers …        …        …     …    …     …       …   …    …   …   …    863
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                                   DAIL EIREANN

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                          De Ceadaoin, 15 Deireadh Fomhair 2008.
                               Wednesday, 15 October 2008.


                    Chuaigh an Ceann Comhairle i gceannas ar 10.30 a.m.




                                     Leader’s Questions.
  Deputy Enda Kenny: Yesterday, on behalf of the Government, the Minister for Finance
introduced the most swingeing and savage budget in years against the background of the
Government’s decision that every citizen must now pay for its mistakes. Yesterday, I said the
country had a surplus of \6 billion two years ago but now is in deficit of almost \15 billion.
There are no answers as to where all that money went or how the Government has led us to
this point of recession.
   In the course of the budget debate yesterday, we learned not only about the Government
striking a blow against elderly people by taking away medical cards granted to those over 70
and how middle income families will now get screwed by taxation at every turn of the road,
but also about a change in respect of the health expenses relief. The point raised by Deputy
Michael Noonan on the health expenses relief requires clarification, as the Taoiseach is aware.
Budget 2009 states in page B.6, “Health Expenses relief will be granted at the standard rate
only from 1 January 2009, with the exception of nursing home expenses which will be standard
rated from 1 January 2010.” There is great confusion over this. The Minister for Defence,
Deputy O’Dea, said that the intention of Government was to have this rated at the higher rate
of tax and not at the standard one. This seems to have been disputed by the Minister for Health
and Children and I therefore want the Taoiseach to clarify it. What will the rate be? Will it
remain at 41% or will it be reduced to 20%, which will have a devastating impact on families
paying for patients in nursing homes, particularly in the Dublin area where charges can be
higher than in the rest of the country. The measure is supposed to yield \150 million in a
full year.

   The Taoiseach: The marginal rate is available for the course of 2009. The thinking behind
what is to happen in 2010 and beyond relates to the review that will take place upon the fair
deal scheme coming into play. As the Deputy knows, there are currently families who must
pay considerable sums of money and consequently obtain the tax relief. The idea of the fair
deal scheme is to treat everyone the same, be they in beds in private nursing homes or public
nursing homes. No one in any circumstances under the new fair deal regime will pay more than
80% of his or her income as part of the funding mechanism. The provision should be reviewed
in the context of the fact that the fair deal regime with ensure equality of treatment and that
comprehensive, uniform criteria will apply to nursing home provision to deal with historic
                    Leader’s              15 October 2008.             Questions

  Deputy Enda Kenny: I asked the Taoiseach about page B.6 of Budget 2009, which states,
“Health Expenses relief will be granted at the standard rate only from 1 January 2009, with
the exception of nursing home expenses which will be standard rated from 1 January 2010”.
The fair deal legislation will not take effect until some time next year. Is what I quoted a
mistake? Alternatively, is the commitment made by the Minister for Defence, Deputy O’Dea,
yesterday and repeated by the Minister for Finance incorrect? In other words, will the higher
rate continue to apply and not be reduced to 20% from 1 January 2010?
  We do not know when the fair deal legislation will take effect, how it will be amended or
the circumstances that will arise between now and its passage. This measure has caused conster-
nation for thousands whose elderly kith and kin are either in or are likely to be in nursing
homes. If the measure is to apply at a reduced standard rate, it will cause mayhem among
families that will not be able to pay. As Deputy Noonan pointed out yesterday, charges in
Dublin can amount to \60,000 per year. They may be somewhat lower in other places around
the country.
  Is what I quoted from page B.6 a mistake? It should be very clear to everybody that it is a
mistake and that the intention of the Government, as outlined by the Minister for Defence
yesterday, is that the higher rate of tax in respect of medical expenses relief will continue to
apply. The measure in page B.6, if introduced, will affect many thousands of elderly folk and,
as a consequence, their families. Will the Taoiseach clarify whether it is a mistake and whether
the rate of 41% will continue to apply in respect of medical expenses relief for patients in
nursing homes?

  The Taoiseach: As I explained to the Deputy, the measure in page B.6 assumes the full
operation of the fair deal legislation by 1 January 2010. The point I am making is that, if the
fundamental reform is to take place whereby all in receipt of nursing home care will pay no
more than 80% of their income, regardless of whether they are in private or public nursing
homes, one will not be able to argue so rigorously that the tax incentive introduced in the first
place is required. If the new system were not to be in place, the present marginal rate would
remain until the fair deal system became fully operational, at which stage we would review
circumstances fully.

  Deputy Richard Bruton: There is a decision here. Is it now a review?

  An Ceann Comhairle: This is Leaders’ Questions.

  The Taoiseach: I have just explained that this depends on full operation of the fair deal
legislation by 1 January 2010.

  Deputy John Deasy: Explain it to Willie.

  The Taoiseach: That is the situation. In the meantime, as our true intention here is not to
cause problems or concerns for people, I am making it very clear that until such time as it is
fully operational, there will be no change to the marginal tax relief that is available for nursing
home care because there are——

  Deputy Bernard Allen: Therefore, yesterday’s statement is wrong. We want a straight answer.

  The Taoiseach: No, it is not wrong.

  An Ceann Comhairle: This is Leaders’ Questions.
                    Leader’s              15 October 2008.              Questions

  The Taoiseach: The Deputies are not prepared to allow the clarification to be made because
they want to continue with some confusion. There is no confusion.

  Deputy Bernard J. Durkan: There is confusion.

  The Taoiseach: The present marginal rate remains in place in respect of nursing home care
for those who require it and are eligible for it until such time as the fair deal scheme is fully
operational, which is a fundamental reform, as Deputies will know. It is presumed the fair deal
scheme will be fully operational by 1 January 2010. We will review the situation and ensure
that if it is fully operational, we will consider the changes that can take place, because this will
not affect people. They will not be seeking the 41% marginal tax relief at that time because
the whole basis upon which their payment is made will change and that will be the same for
everyone regardless of whether they are in a private or a public nursing home.

  Deputy Olivia Mitchell: Is it not an optional scheme?

  Deputy Eamon Gilmore: Which of the treacherous 30 cuts and charges that were introduced
in yesterday’s budget is the Taoiseach most embarrassed by? Is it the 1% tax on the widow
who takes a part-time cleaning job to supplement her pension? Is it the taking away of the
medical card from old age pensioners? Is it the \100 charge that the parent of a sick child will
now have to pay to attend accident and emergency or a hospital? Is it the \2,000 that the
average middle income family will have to pay back to the Government in after-tax income as
a result of yesterday’s changes? Is it the \1,500 that the same hard-working family will have to
pay in a registration fee when one of their children goes to college? Is it the cut in child benefit
or the early childhood payment? Is it the increase in class sizes? Is it the fact that to date the
only organisation to welcome the budget is the Construction Industry Federation?

  Deputies: Hear, hear.

  Deputy Mary Hanafin: That is not true.

  Deputy Eamon Gilmore: Specifically, in respect of the withdrawal of the medical card from
pensioners, I received a call this morning from a pensioner who was on VHI but qualified for
the medical card when he turned 70 and stopped paying VHI. Can that pensioner get back into
VHI now and, if so, what will it cost? What type of cover will the VHI provide to such a
pensioner if he does manage to get back into it?

  The Taoiseach: It is not a question of my being embarrassed by any of these measures, which
are necessary in the interests——

  Deputy Roisın Shortall: The Taoiseach should be embarrassed.
          ´ ´

  The Taoiseach: These measures are necessary in the interests of trying to provide a sus-
tainable public finance position for the country.

  Deputy Bernard Allen: It is a nice mess the Taoiseach has got us into.

  Deputy Olivia Mitchell: The Government made a bad deal with the doctors and it is making
the public pay.

  Deputy Dermot Ahern: The Deputies speak out of both sides of their mouths.

  The Taoiseach: If it is Deputy Gilmore’s contention — it was certainly Deputy Bruton’s
contention last night — that there should not have been any tax-raising revenue provisions in
                     Leader’s            15 October 2008.            Questions

  [The Taoiseach.]
the budget, what part of the expenditure programme would he cut by another \2 billion? That
is what is required.

  Deputies: Hear, hear.

  The Taoiseach: If it was also the case that he did not believe there were discretionary spends
in the capital programme that should not have been deferred, what further \1 billion in cuts
— making a total of \3 billion — would he estimate we could find in the public expenditure
programme? If we were to move, as Deputy Bruton said, to a 5.5% deficit instead of the 6.5%
deficit and if we were not to raise taxes, this would require another \2 billion of expenditure

  Deputy Enda Kenny: There is no plan, none.

   The Taoiseach: If the Fine Gael budget which has been outlined by its finance spokesperson
is that we would have a 5.5% deficit and not raise any taxes——


  Deputy Dermot Ahern: The Deputies are speaking out of both sides of their mouths.

  The Taoiseach: I want to make it clear——

  Deputy Emmet Stagg: The Government should tax the fat cats who caused this.

  An Ceann Comhairle: Let the Taoiseach finish.

  The Taoiseach: I want to make it clear that if this is the Fine Gael position — it was their
stated public position on the “Prime Time” programme last night — they are required to find
another \5 billion in expenditure cuts to make that budget stick. That is the reality.

  Deputy Richard Bruton: The Taoiseach can read out policy statements, but why does he not
look for something from the banks?

  An Ceann Comhairle: Let the Taoiseach finish.

 The Taoiseach: Those are the facts. Whether one is on the Opposition benches or the
Government benches, two plus two is four, and you add the zeros later.


  Deputy Enda Kenny: A Cheann Comhairle, the Taoiseach is——

  A Deputy: He is on his own.

  Deputy Conor Lenihan: Enda cannot even get the people behind him to calm down. He has
no leadership skills whatsoever.

  An Ceann Comhairle: The Taoiseach should be allowed to finish.

  Deputy Richard Bruton: The Minister of State, Deputy Conor Lenihan, should not shout
down his Taoiseach.

  The Taoiseach: Deputy Gilmore decries all the methods of raising tax revenue. I do not
believe it is the view of the Labour Party that we should cut expenditure further — I do not
                     Leader’s            15 October 2008.            Questions

think that is its position. I have heard what Deputy Gilmore had to say in regard to some tax
expenditures. We will debate those in the House and assess their impact, and at least we can
have a debate that might make sense. However, the debate I am trying to have with the
Opposition here does not make any sense because it is \5 billion out before it starts.

 Deputy James Reilly: It will make a lot of sense to those whose medical cards will be cut.
Health cuts hurt the old, the sick and the disabled. Is that right? Where did we hear it before?

   The Taoiseach: With regard to the specific point raised by Deputy Gilmore, the medical card
is available for GP services.

  Deputy Bernard Allen: Willie will have an army with no barracks.

  The Taoiseach: The VHI does not provide cover for GP services.

  Deputy Joan Burton: Some plans do.

  Deputy Emmet Stagg: It covers far more than GP services.

  The Taoiseach: Let us be clear. That is not the situation.

  Deputy Emmet Stagg: It also covers accident and emergency and hospital charges.

  Deputy Olivia Mitchell: It covers a lot more.

  The Taoiseach: Excuse me——

  An Ceann Comhairle: Let the Taoiseach finish, please.

  Deputy Emmet Stagg: That is wrong.

  The Taoiseach: The position is——


  The Taoiseach: I am making the point and shouting me down will not change it.

  An Ceann Comhairle: This is Leaders’ Questions.

  Deputy Emmet Stagg: He is wrong.

  The Taoiseach: Shouting me down will not change it.

  Deputy Emmet Stagg: He is wrong.

  An Ceann Comhairle: It does not matter. The Deputy has no input to make on this.

  The Taoiseach: With respect, I am not wrong. VHI does not cover GP services and the
medical card does cover those services. Let me make it very clear, I very much regret the

  Deputy James Reilly: VHI covers \25——

  Deputy Dermot Ahern: Deputy Reilly should keep quiet. I will show him what he said
in 2001.

  Deputy James Reilly: Do that, by all means.
                     Leader’s            15 October 2008.             Questions


  Deputy Dermot Ahern: Deputy Reilly fought this. He is a hypocrite. He threatened to strike.

  An Ceann Comhairle: Order, please. Let the Taoiseach finish.

 The Taoiseach: Just so we get the full flavour of consistency, as I wish to deal with Deputy
Gilmore’s substantive point——


  An Ceann Comhairle: Excuse me, I wish to make one thing clear. This is Leaders’ Questions
and the Taoiseach must be allowed to finish.

  The Taoiseach: Deputy James Reilly, when he was chairman of the IMO’s GP committee,
condemned the Government’s decision to offer medical cards to all pensioners over 70. His
position was that it was not acceptable. Now, of course, he decries the fact that we have changed
that arrangement.

  Deputy James Reilly: That was without means testing. Since that time, for seven years——

  The Taoiseach: I presume the Deputy is proud of the fact that, when he was chairman of
that GP committee, he negotiated four times the charge for people in less disadvantaged areas
than in disadvantaged areas. He effectively got a payment——

  Deputy James Reilly: For seven years people have had these cards. Now, the Government
takes them away from pensioners and wants to tax them.

  The Taoiseach: He effectively achieved a payment of \641 for every such person who was
on the GP list.

  Deputy Olivia Mitchell: The Government made a bad deal with the doctors and is expecting
people to pay.

  The Taoiseach: That was what was negotiated——

  Deputy James Reilly: By the Government.

  The Taoiseach: ——and \85 million of the cost in that regard goes directly to GPs.


  An Ceann Comhairle: Allow the Taoiseach to finish.

   The Taoiseach: On Deputy Gilmore’s point, I very much regret that this was a necessary
decision. I would like to have been in a position to say the present situation could have con-
tinued, but it was not possible in the context of all the decisions that had to be taken——

  Deputy James Bannon: Why?

  The Taoiseach: ——because we have \6.5 billion less in revenue than was anticipated.

  Deputy Bernard J. Durkan: Why is that?

  The Taoiseach: In that regard, a very balanced approach was taken which sees expenditure
cuts of over \2 billion——
                   Leader’s              15 October 2008.            Questions

  Deputy Bernard Allen: It is a nice mess the Taoiseach got us into.

  The Taoiseach: ——tax revenue raising of \2 billion and——

  Deputy Ruairı Quinn: The Taoiseach should at least apologise for his mismanagement.

  The Taoiseach: One moment, please. In addition, there is \1 billion in regard to the capital
  I regret that is the situation, but we have sought to achieve that seven of every ten people
over 70 will be eligible for that medical card on the means test grounds, based on the data that
are available for those who were in receipt of medical card between the age of 66 and 70 and
who got the card when they came to the age of 70.

  Deputy Emmet Stagg: Those over the limit will be cut off.

  The Taoiseach: There will also be people who will be entitled to the GP-only card and those
who will be entitled, up to a dual income limit of \1,300 per week, for the \800 payment
towards medical expenses.

  Deputy Enda Kenny: They will not spend that because they will be afraid to go to the doctor.

  The Taoiseach: I am sure it would be better for everyone if we were in a position where it
could continue to be universally applied but that is not possible in the financial circumstances
in which we find ourselves. We had to make an adaptation, a change, a modification which still
provides more cover.

  Deputy Bernard Allen: The Taoiseach is a failure. He got us into this mess.

  The Taoiseach: I say to Deputy Quinn that I am more proud of the achievement of the
Government towards the elderly throughout our time in office than anything he was able to
achieve in his three budgets.

  Deputy Bernard J. Durkan: Brave talk.

  Deputies: Hear, hear.

  Deputy Eamon Gilmore: I asked the Taoiseach two questions, neither of which he has
answered. The first was whether there was anything at all in the budget yesterday that caused
him any embarrassment.

  Deputy John Cregan: He answered the question. He said he was not embarrassed.

  Deputy Eamon Gilmore: He clearly is not, which means we have a hard-necked Taoiseach
leading a shameless Government.

  Deputies: Hear, hear.

  Deputy Eamon Gilmore: The very least he could do this morning for people who are suffer-
ing pain as a result of the budget is to express some degree of remorse, regret and apology
to them.
  Second, I asked a specific question about elderly people who had health insurance, but who
understandably gave it up when they got medical cards in the expectation that they would
continue to have them. The Government is now taking the medical card off them and leaving
                    Leader’s              15 October 2008.             Questions

  [Deputy Eamon Gilmore.]
them marooned in a situation where they will now have no medical card and no health
   I checked this morning with the VHI and I am told that a pensioner in those circumstances
will have to wait ten years for cover for a pre-existing condition and two years for cover for a
new condition. What answer can the Taoiseach give to a person aged 75 or 76 from whom he
is taking the medical card, who has stopped paying health insurance? What comfort can he
offer to them this morning about their health cover because people are worried and are ringing
my office and I am sure other offices also?
  Third, if the Taoiseach is so convinced the people of this country accept his budget, will he
put it to the test? Will the Taoiseach move the writ for the by-election that is due in Dublin
South and put his budget to the test of the people of that constituency at least?

  Deputy Billy Kelleher: What has Deputy Gilmore done about it?

  An Ceann Comhairle: The Taoiseach should be allowed to speak without interruption.

  Deputy James Bannon: Put it to the country.

  Deputy Finian McGrath: Deputy Bannon wants an election.

  An Ceann Comhairle: The Taoiseach should be allowed to speak without interruption.

   The Taoiseach: I will provide my speech on the budget debate this morning and I outline in
it that I acknowledge that sacrifices are being asked of people. I acknowledge that people will
be in a worse position next year than they are in this year. That is true. I state that openly and
clearly. The reason is that we have to make adaptions to address the situation.

  Deputy James Bannon: The Government took a service out of my town that was the equiv-
alent to two major industries. The people of Longford and Westmeath are very angry.

  An Ceann Comhairle: Deputy Bannon is not the leader of his party.

  A Deputy: Ballymagash.

  An Ceann Comhairle: He has no input to make to the debate.

  Deputy Dermot Ahern: Thank God he has to run for that side of the House.

  The Taoiseach: We have to make those decisions because if we do not make them — as
difficult and unpalatable as they are——

 Deputy Bernard Allen: The Minister, Deputy Dermot Ahern, could not find out about Ray

  An Ceann Comhairle: Please.

  The Taoiseach: ——for some. I accept that. Of course I understand that. I am a politician
who represents constituents as much as Deputy Gilmore. I get as many telephone calls from
constituents as he does.

  Deputy James Bannon: The Taoiseach let down the midlands.
                    Leader’s               15 October 2008.              Questions

  The Taoiseach: I know those things, but I have to say to people that if we do not make
decisions in the context of the deteriorating situation, then we put at risk not only the provision
of those services, but other services. That is the hard lesson we learned in the past, that by
deferring those decisions we hike it over.

  Deputy Ruairı Quinn: The Taoiseach forgot that.

  The Taoiseach: I did not forget it.

  Deputy Dermot Ahern: Deputy Quinn was part of it too.

  The Taoiseach: I do not accept for a moment that I forgot it because the complaint from the
Labour Party benches in each of the past three budgets was that I was not spending enough. I
recall in regard to the Labour Party’s manifesto that Deputy Quinn was calling for a hugely
increased capital investment programme way beyond what we are providing, which will still be
between 5% and 6% of GNP next year, in line with the NDP commitment. That was Deputy
Quinn’s position. That would have meant higher taxes. Deputy Quinn is entitled to put that
view. He put it to the test and it did not work.
  Deputy Gilmore made a point about elderly people losing health cover. People are entitled
to hospital services. The vast majority of VHI services — up to 95% — relate to hospital
services. Deputy Gilmore may be able to show me some aspect of a plan relating to GP services.
Those people are still entitled to be looked after in hospitals and acute services should they
require them.

  Deputy Emmet Stagg: They will have to pay for it.

  The Taoiseach: The position in regard to those who do not have a medical card, those with
a GP only card, is that their expenditure will not exceed \100 on medical expenses per month.

  Deputy Emmet Stagg: Time.

  The Taoiseach: No, per month. Anything over that will be paid for by the State.

  Deputy Emmet Stagg: There are 12 months in a year.

  The Taoiseach: In the past I recall that people had to pay for their medical expenses for
three months regardless of the cost before they could seek a refund.

  Deputy Joan Burton: That is just for drugs.

  The Taoiseach: That was the old situation. We changed that through the drug payment
scheme when I was Minister for Health and Children. As a result, that brought a huge reduction
in the concern people had about the cost of drugs.

  Deputy James Bannon: We are back in Angola.

  The Taoiseach: We are continuing with that scheme. It is only fair to say that because of the
difficulties we face, unfortunately, it is not possible in the present situation to provide universal
entitlement in respect of all of these matters, as was the case in the past. The great majority of
the advances we have made for the elderly have been protected in the budget and can be
protected for the future. We can say that, and we can point to real improvements both in
terms of the extension of age exemption limits in regard to increasing the pension and the
supplementary entitlements. All of those benefits have been quite rightly provided to the
            Financial Resolution No. 15:          15 October 2008.       (General) Resumed

  Deputy Jack Wall: What about the rent subsidy? It is an absolute disgrace.

  The Taoiseach: I am proud of that record because it far exceeds the record of any other
Administration, despite the claim of the Labour Party that it was always in favour of and better
able to look after people than we were.

  Deputy James Bannon: What about the farmers?

  The Taoiseach: The record points to the contrary. The same is true of child benefit. Despite
that fact, the point is that people in this situation——

  Deputy Bernard Allen: The point is the Taoiseach made a mess of it.

  The Taoiseach: ——are still entitled to acute hospital services. The vast majority of people
will receive a medical card or a GP only card.

  Deputy Roisın Shortall: What about the ones who do not?
          ´ ´

 The Taoiseach: Only 6% of those who currently have a card will not be entitled to either a
GP card, a medical card or the grant payment to look after their medical expenses.

  Deputy Bernard J. Durkan: What have they done wrong?

                                           Financial Resolutions 2009.


                         Financial Resolution No. 15: (General) Resumed.

  Debate resumed on the following motion:
    THAT it is expedient to amend the law relating to inland revenue (including value-added
  tax and excise) and to make further provision in connection with finance.
                                                                        —(The Taoiseach).
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  The Taoiseach: Taimid ag dul trı cheann de na treimhsı is deacra agus is neamhchinnte i
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gcuimhne go leor daoine. Da bhrı sin, ta plean a leagan amach sa bhuisead chun deileail leis
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na himeachtaı mıfhabhracha ata linn faoi lathair. Ta se mar aidhm againn ord agus muinın a
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athbhunu in ar airgeadas poiblı chun tairgiulacht a mheadu agus cosaint a thabhairt do na
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daoine is mo a teastaıonn sin uathu. Ta roghanna deacra amach romhainn. Caithfimid a bheith
cothrom agus buanseasmhachta agus muid ag deanamh sin. Thapaigh an Rialtas deis agus thug
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muid ceannaireacht o thaobh na polaitıochta de nuair a shocraıomar ar an bhuisead a thabhairt
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chun cinn de bhrı go raibh athru tagtha ar shaol na heacnamaıochta.
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  I m’oraid bhuiseid i mı na Nollag seo caite, rinne me tagairt don neamhchinnteacht a bhı ag ´
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baint le cursaı eacnamaıochta idirnaisiunta, chomh maith leis an gculu a bhı ag tarlu inar
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dtionscal togala. Nı leir d’einne ag an am ce chomh tapa is a thiocfadh an meath domhanda
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agus baile ata linn anois. Ta coras airgeadais an domhain ina chıorthuathail le cupla blian
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anuas. Os rud e gur geilleagar beag oscailte ata againn sa tır seo, bıonn tionchar nıos mo ag´
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droch-chursaı eacnamaıochta domhanda orainn. Ta an culu san earnail togala nıos measa mar
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gheall ar an ngearcheim i gcursaı creidmheasa. Ta lagmhisneach ar dhaoine de bharr sin. Nı      ´
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raibh suil ag aon daoine, fiu na trachtairı is eadochasaı, ce chomh tapa agus chomh tromchuise-
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ach is a bheadh an culu seo. Mar sin fein, caithfimid smaoineamh go bhfuil Eire ag leanuint ar
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aghaidh ag mealladh infheistıocht le linn an chulu domhanda seo. Ta an Rialtas ag cinntiu go´
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leanfar ag cur lena gclu mar gheilleagar ata fabhrach do fhiontraıocht agus mar ait tharraingte-
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

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ach d’infheistıocht dhıreach. Is e an rud is tabhachtaı anois na ar n-airgeadas poiblı a dhaingniu.
  ´                                                           ´                   ´
Nıor theip ar an Rialtas seo riamh cinneadh deacair a dheanamh ar son na tıre, caiteachas a
      ´                      ´
laghdu agus geilleagar na hEireann a chosaint.
  The objectives of budget 2009 are clear. They are to steer Ireland through the global
recession brought about by the international crisis on a scale last seen in the 1930s.

                                                 ´           ´
 Deputy Michael D. Higgins: A Cheann Comhairle, ta pointe ordu agam le do thoil. An
        ´       ´                       ´
mbeidh coip do raiteas an Taoiseach ar fail?

                        ´                 ´
  The Taoiseach: Beidh se. Gabh mo leithsceal.

  Deputy Michael D. Higgins: Go raibh maith agat.

   The Taoiseach: It is about protecting to the greatest extent possible the progress that Ireland
has made over the past decade. It is about ensuring that Ireland has a solid basis for economic
             recovery when world economic conditions improve. Every Deputy in the House,
11 o’clock   stepping outside the confines of adversarial party politics, recognises that we are
             in extraordinary economic circumstances. The global economic and financial
climate means we face stark choices. If we do not make the right choices there will be catas-
trophic consequences for the future prospects of the economy and we will threaten the liveli-
hood of current and future generations of people.
  The turmoil in international financial markets provides the backdrop against which this
budget has been framed. No one yet knows the full extent of these adverse developments or
how quickly stability can be restored. It is not credible to suggest that any government could
ensure the winds of global recession which are battering at the door of every other nation
would by-pass this country. We must deal with realities as they are, not as we might like them
to be. Ireland is an open economy and we depend on exports as a major driver of our economic
success. In good times we benefited more than proportionally from the benign world conditions.
In these difficult times we are being severely impacted by these stormy international conditions.
The first requirement, therefore, is to seek to stabilise the current situation and chart a pathway
back to economic recovery in the coming years.
   Unprecedented times call for unprecedented measures. The first such measure was to bring
the budget forward from the usual December date to yesterday. Fiscal stability has been central
to Ireland’s economic success of recent years. It has been the firm foundation for building an
enterprising economy which rewards hard work but also has a strong social provision. The
second major decision was to take decisive action to secure our banking system. We need a
strong banking system to support our economy and to support hard-pressed families and
  Up to this year, the economy was growing year on year and hundreds of thousands of jobs
were created, which brought in increased tax. We used that money to reform our income
tax system and reduce tax on workers and businesses and invested heavily to address the
underinvestment of the past by providing better public services in health, education, social
welfare and other areas, and investing in capital infrastructure to build up the country and
meet the demands of a growing country. While doing all this, we put more than \20 billion
into the National Pensions Reserve Fund to help provide for the future and we halved the
national debt in a decade. That decade is now over and those improvements are there for all
to see. We made sure that more working families retained a greater part of their income than
was ever the case before.
            Financial Resolution No. 15:   15 October 2008.          (General) Resumed

  [The Taoiseach.]

  This year, the rapid slowdown in the global economy and the downturn in the housing market
have dramatically reduced the revenue available to run public services. The 2009 budget is the
most crucial budget in modern times. Our tax revenues this year were significantly less than
budgeted for because of the sharp slowdown in economic activity. In 2007, we achieved 6%
growth and this year growth has contracted by approximately 1.5%. To deal with this sharp
deterioration in public finances as a result of that reduced activity, we have chosen a direction
based not on soft options, quick fixes or political expediency. Sound and stable public finances
are a prerequisite to the delivery of long-term economic and social improvements.
  The approach has to be sufficient to restore stability, yet measured such that it does not
accelerate the economic slowdown. The budget arithmetic achieves this balance through a
combination of targeted reductions in spending and measured approaches to increasing
revenue. It addresses the budgetary challenge in 2009 and, importantly, paves the way for
healthier and more sustainable fiscal outturns in the years ahead.
  We are raising tax revenue by close on \2 billion in net terms to keep within our financial
targets and we are cutting expenditure. Significantly, we will have to continue to work to
reduce the current budget deficit which will stand at more than \4.7 billion even after the
budget changes.
  On the capital side we are still investing heavily in Ireland’s future. The priorities of the
national development plan have been maintained. The pace of improvement, evident in recent
years, will continue. Taking direct Exchequer funding of \8.2 billion and a public private part-
nership contribution of somewhat less than \1 billion, total capital investment next year will
be \9.2 billion or 5.4% of gross national product. This is in keeping with our commitment in
the national development plan to keep capital spending during these years at between 5% and
6% of gross national product. In the past, all our capital spending came out of cash surpluses.
Now we have to borrow, but that is totally defensible because of the economic rate of return
we receive from the investment we envisage in the next year on capital. This is prioritising the
spend on areas where there is an economic return in the short term on transport and environ-
mental infrastructure and in the longer term in respect of education and research and develop-
ment investment. This significant investment in transport, research and development, environ-
mental services and communications will enhance the competitiveness of our economy and
drive future economic progress.
   Given the very rapid increase in expenditure on services in the past ten years, it is not
unreasonable that we should reduce the pace of growth in the short term, when this is clearly
in our long-term interest. In this period of global economic crisis, it is easy to lose sight of what
Ireland has achieved. We must consolidate that now and build for the future by continuing to
invest so that we can increase productivity and be more competitive.
  When times were good, we invested wisely in schools, roads, public transport——

  Deputy Enda Kenny: The odd voting machine as well.

  The Taoiseach: ——communications and housing, giving us one of the highest rates of public
investment in Europe. We dramatically increased the State pension for our elderly and child
benefit for our working families. We increased the number of gardaı, teachers, doctors, nurses
and people helping our special children in education and health.

  Deputy James Bannon: Where is the 20:1 ratio the Government promised for schools?

            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

  The Taoiseach: The average industrial wage has also risen substantially. There are now more
than 2 million people working in the country despite rises in unemployment during the past
year, and, unfortunately, further rises in unemployment are predicted next year. Our com-
pletion rates for second and third level education are among the highest in the European
Union. It is a key priority to protect this solid base of achievement to the greatest extent we
possibly can in these circumstances.
  We are determined to keep our focus on making sure that we come out of these difficult
times as quickly and strongly as we can.

  Deputy James Bannon: The Government cannot be trusted.

  The Taoiseach: If there is one thing we should all learn from the past, it is that the worst
policy of all and the one which causes the most damage to people is to pretend that tough
action can be taken without people feeling the impact.
   The only way to provide quality public services and to maximise support for the less well off
is to get us back to strong public finances as quickly as feasible and take the actions required
to achieve that objective. With revenues down \6.5 billion this year, it would simply not be
responsible if we did not adapt the level of public services being provided. Policy changes had
to be considered and had to take account of the fact that the Government will have less revenue
next year than was anticipated before the international downturn hit us.

  Deputy James Bannon: The great Homer must have nodded.

  The Taoiseach: We must take a balanced approach, significantly reducing the rate of expendi-
ture on current day-to-day spending from 10% this year to 3.8% next year, by deferring dis-
cretionary capital spending, including holding off on further land acquisition and building on
the decentralisation programme until the 6,000 public servants who are ready to relocate are
in place in the next couple of years. We also had to consider and make decisions on raising
taxes by \2 billion in net terms to end up with a general government deficit which is still high
at 6.5% of gross domestic product.
  The Fine Gael finance spokesman said last night that Fine Gael would not raise taxes but
would bring in a budget with a 5.5% deficit. That can only mean it is in favour of further
expenditure cuts totalling more than \4 billion because to reduce the deficit from 6.5% to 5.5%
would cost more than \2 billion and Deputy Bruton disagrees with our tax raising measures
which cost another \2 billion.

  Deputy Finian McGrath: Now, Deputy Bannon.

  Deputy Bernard J. Durkan: We would not have a \12 million deficit, that is the difference.

 The Taoiseach: To do that — people are entitled to put their alternatives to the House —
would simply devastate public service delivery——

  Deputy Bernard J. Durkan: That is what has been done.

  The Taoiseach: ——and would involve making political decisions at this time which would
simply be untenable. I agree we must move to eliminate the current budget deficit to finally
establish a long-term sustainable path, whereby day-to-day expenditure corresponds to tax
receipts. As tax revenues are 10% less than expected for this year, with little improvement in
that position assumed for next year, that can only be done progressively over time.
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

  [The Taoiseach.]

   I wish to comment further on the matter raised by Deputy Gilmore during Leaders’ Ques-
tions. I am conscious of the sacrifices people will make as a result of yesterday’s budget. If we
begin a process of correction now and stick with it in the years ahead, we will provide the best
means of protecting our prosperity and supporting the vulnerable in the years to come. We
have done our utmost to adhere to the principle of fairness in making our budgetary decisions.
When money is less plentiful, we must divert it to those who are most in need. The contri-
butions people make to the cost of public services must be structured in line with their ability
to pay.
  We have increased the income tax band to ensure that workers on modest incomes do not
pay tax at the higher rate as a result of standard pay increases. We have structured the necessary
income levy to ensure that those on higher incomes will pay more. We have capped the tax
benefits of pension contributions at a significantly reduced level of earnings. In that way, we
will ensure we do not provide subsidies to those who are not in need. People on modest incomes
are sheltered from the necessary increases in charges. The criticisms of the income levy from
Opposition Deputies ring hollow when one considers that when they were in office——

  Deputy Enda Kenny: The Taoiseach should be talking about the future.

  The Taoiseach: ——they used to charge people on similar low and modest incomes 26% on
every £1 they earned beyond the first £84 a week.

  Deputy Bernard J. Durkan: We were told a year ago that Ireland was the richest country in
the world.

  An Ceann Comhairle: The Taoiseach, without interruption.

  Deputy James Bannon: There is no leadership.

  Deputy Willie O’Dea: The Deputies opposite should stop “The Muppet Show”.

  Deputy James Bannon: Society is standing still.

 An Ceann Comhairle: Deputy Kenny, who is next to speak, will speak on behalf of Deputy
Bannon’s party.

  Deputy Dermot Ahern: The Deputies opposite would do well on “The Muppet Show”.

  Deputy Bernard J. Durkan: The members of the Government would not have to apply
for that.

  Deputy Conor Lenihan: Deputy Durkan is the old guy up in the corner.

  The Taoiseach: Since that time, when the Opposition parties charged a 26% rate, we have
introduced reforms to the tax system which have taken 500,000 workers out of the tax net

  Deputy Enda Kenny: They are back in the tax net since yesterday.

  The Taoiseach: The Opposition parties imposed a 26% charge when they were in govern-
ment, whereas we are asking for a 1% levy at these difficult times. The system we propose will
ensure that those on high incomes will pay the levy on their gross income and cannot shelter
that income from the levy. That is progressive — as one earns more, one pays more. If we
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

were to increase tax rates, for example, by adding 1% to the standard band and 2% to the
higher band, we would not accrue the volume of money required, or achieve the outcome the
levy will achieve.

  Deputy James Bannon: The Government wasted the money it had.

   The Taoiseach: We are providing a package of over \515 million to protect pensioners and
other social welfare recipients from the effects of inflation. There is a widespread acceptance
that expenditure on child benefit does not achieve an appropriate degree of balance. Therefore,
it is right to signal the phasing out of child benefit in respect of 18 year olds in full-time
education. Young people from families that depend on social welfare are specifically taken into
account in the compensatory measures announced by the Minister, however. Similarly, the
changes announced in respect of the medical card for people over the age of 70 are not
unreasonable. The entire older population, with the exception of 5% of them who have the
highest incomes, will continue to have access to a medical card, a doctor-only card or a grant
towards GP expenses. Of every 100 older people, 94 will get a medical card, a doctor’s card or
the \400 grant. The rest of them will not qualify because they have a pension of more than
\650 per week. The contributory State pension is \230.30 per week and the non-contributory
pension is \219 per week.
  The Government will enable progress to be continued in developing all levels of the edu-
cation system in an appropriate manner. It will increase capitation grants, expenditure on
research and development capacity at third level and specific supports for children at school
with disabilities. The budget also delivers on our commitment to use fiscal mechanisms to
encourage environmental improvement. The credibility and success of the Government’s
budgetary strategy is increased when the behaviour of people across the economy reflects and
reinforces the underlying approach to budgetary choices. The budget is compatible with the
social partnership process and the draft agreement. It secures stability in the public finances,
defends those who are most vulnerable and distributes the burden of adjustment as fairly as
possible. I ask for the support of the social partners in navigating through this difficult time for
their members and the rest of the country.
  The decisions announced yesterday will have specific implications for the public service. It
has been suggested that there has been an unreasonable and excessive explosion in public
service numbers, but the facts suggest otherwise. While Ireland compares well to other OECD
countries in this regard, present circumstances require that we achieve more for less. We are
not interested in merely being in line with OECD averages in terms of staffing levels and
performance. We must move from average to best. We must display the highest rates of pro-
ductivity increase, the strongest indicators of quality outcomes, the smartest application of new
technologies and the closest attention to the diverse needs of our citizens. At a time of severe
economic and fiscal challenge, the efficiency and effectiveness with which public services are
organised and delivered is critically important. The budget reflects the decisions the Govern-
ment has already taken to focus spending on areas of greatest priority and to reduce sharply
activities which are not essential in the present circumstances. We intend to reduce significantly
expenditure on consultancies and to curtail severely expenditure on advertising and other sup-
port activities. Measures to transform the management of procurement across the public service
are also in train and will yield significant savings.
  There is clear and overwhelming evidence that our public servants deeply resent the fact
that under-performance is tolerated and protected. They are frustrated, as others are, when
their practical experience of service delivery is not reflected in the development of policy.
There is great talent and an impatience for reform in many quarters of the public service. We
need to liberate that talent and fast-track the process of reform. Pressure of resources can
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

  [The Taoiseach.]
contribute to the creative solution to these challenges. The budget provides for a 4% reduction
in the public service payroll, relative to 2008. This challenging target will be built on with
targets for further efficiency gains over subsequent years. Our public servants are relatively
well paid. In return, they must accept the need for openness to change and innovation on a
par with the most competitive aspects of the private sector. They must show flexibility and be
willing to meet the rigours of performance management and external accountability. In their
deployment and activity, they must focus on the service of the citizen, which is what matters
the most.
  The modernisation of the public service and the drive for greater efficiency and effectiveness
were the Government’s central requirements during the recent negotiations on a new public
service pay agreement. The full and comprehensive delivery of that agenda is central to the
policies and priorities of this Administration. The public service and its trade unions recognise
that the public deserves and demands nothing less than a full and transparent renewal of the
public service, at all levels and in all sectors. In the weeks to come, the Minister for Finance
and I will announce specific measures arising from the work of the task force on public sector
reform. There will be a rigorous appraisal of staffing levels, underpinned by external expertise,
so that public service managers are supported in their efforts to ensure that available resources
are appropriately aligned with priority needs. This can be achieved in partnership by applying
the terms of the draft agreement that was negotiated recently. In any event, such changes are
essential and will be pursued vigorously by the Government. The decision by the members of
the Government and the Secretaries General of the various Departments to waive voluntarily
10% of their income was a symbolic move rather than a gimmick.

  Deputy James Bannon: It is a fine for the Government’s bad behaviour.

  Deputy Dermot Ahern: Did Deputy Bannon agree to take a wage cut?

  The Taoiseach: Symbolic gestures are important in a community of citizens. We build our
civic culture through actions which underline our intentions and our meaning. In this instance,
our intention was to show our appreciation of the difficult times many of our citizens will
experience in the period ahead. The gesture is an acknowledgement that, in a small society, we
depend on each other. Each of us depends on the efforts and supports of others. I refer to
people in the public and private sectors; workers and employers; and people who have recently
arrived in this country and those who are rooted in a strong local Irish identity. The impact of
change and challenge in the months to come will depend on how well we can reflect the
common good in our actions and decisions. One thing that is certain, as we face the most
serious global economic circumstances for almost a century, is that these times will pass.

  Deputy James Bannon: So will this Government.

  The Taoiseach: When that happens, Ireland needs to be in a position to take advantage. I
want to make it clear that Ireland’s future is bright. It has been said that the only safe ship in
a storm is leadership.

  Deputy Bernard Allen: The Government has brought us on to the rocks.

  The Taoiseach: This Government will show leadership by managing the economy through
this international downturn and on to a path to economic recovery. A time of serious adversity
can be a time of great opportunity. In the cycle of any economy, there is a time for renewal
and change. The basis for this economic renewal will be the achievements of the past ten years.
Yet during difficult times it is tempting to batten down the hatches and wait until the storm is
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

over before figuring out where to go next. However, we must not and we will not have our
attention diverted from putting in place the necessary building blocks so that Ireland can take
advantage of the inevitable upswing in the global economy.
  In the current challenging circumstances, the Government is acutely aware of the key role
of business in driving economic growth and providing secure, quality employment. Ireland has
enjoyed extraordinary economic success, in part as a result of providing a highly favourable
business environment. The latest World Doing Business report ranks us seventh out of 182
countries as a place to do business, the fifth easiest place to establish a business and the third
cheapest location for business start-up regulation.

  Deputy James Bannon: And the only country in Europe in a recession.

  The Taoiseach: Nevertheless, the Government is absolutely committed to measures to build
on this success.
   One of the important messages of this budget is that Ireland is very much open for business.
Despite the severe financial and economic difficulties emerging across the global economy,
there is still a strong enterprise sector which is world-class in its capacity and performance. It
is underpinned by the rapidly-evolving scientific, technological and innovation base that is at
the heart of our enterprise policy. With access to a highly-skilled and flexible labour force, this
enterprise economy is well placed for further growth and development. For that reason, it is
essential that we maintain an attractive environment for overseas investment, especially in the
more innovative and higher value-added sectors of the global economy.
  With that in mind, I will be travelling to China next week as part of our overall efforts to
sustain and develop new market opportunities for Ireland and Irish companies. China is
increasingly becoming one of the most significant markets globally, and appears to be better
positioned than many to see out the current economic difficulties. I will have a bilateral meeting
with Chinese Prime Minister Wen Jiabao and I expect to discuss the continued development
of bilateral relations between our two countries. I will lead a trade development mission of
over 100 Irish companies, all of whom are expanding their trading opportunities in China. We
will also be exploring opportunities for greater Chinese investment in Ireland.
  Of equal importance to foreign direct investment is the stimulation of business start-ups and
the expansion of indigenous enterprise. A particular priority is development which captures
the full economic benefit of the knowledge and innovation created with the support of public
investment in education and research and development.
   In looking to the future, we can take confidence from the past. The basis of Ireland’s past
economic growth is also that which will fuel our future recovery, namely, the talent of our own
people. Our people will always be the most critical ingredient in our performance. We have
one of the youngest and best educated workforces in Europe. It is their ingenuity and creativity
which will drive the next phase of Ireland’s economic development. That is the Irish advantage,
and we must never lose it. Building the stock of knowledge and know-how is critical. The
budget’s increased support for investment in research and development through the corporate
tax system, as well as the incentives for companies in their early years to retain profits to invest
in development, are strategically important. Combined with our commitment to the continuing
rapid development of a competitive infrastructure, it is clear that the Government remains
strongly pro-enterprise and that this is a pro-enterprise budget.
  We will continue to consider measures to encourage further research and development, as
well as innovation and commercialisation by private enterprise. This will enable Ireland to
move up the value chain so that we assert ourselves not only as an open enterprise economy,
but also an open entrepreneurial economy. This is a crucial basis for our future economic and
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

  [The Taoiseach.]
social development. A great lesson from the last century of Irish history is that self-sufficiency
and protectionism are outmoded economic ideologies. This country, as a small island, must
face outwards. For our people to prosper, we need international markets, foreign investment
and strong trading links.
  It would be wrong of me, in the context of the current difficult economic times, not to
mention my strongly held view that our prospects are absolutely interwoven with our member-
ship of and participation in the European Union. Our membership of the euro has facilitated
a diversification of trade, a reduction in the costs of business transactions, and a stable interest
rate and currency environment. The European Central Bank is playing a vital role in supporting
banks through measures such as the provision of credit and the recent interest rate reduction.
On Sunday, the euro zone countries agreed on a comprehensive suite of measures to enable
each of them to take action in a co-ordinated manner, but tailored to suit their specific cir-
   I firmly believe that Ireland must remain at the heart of Europe. We advance our interests
not by going solo, but by working with like-minded others on problems, challenges and oppor-
tunities that can only be dealt with effectively by working across national borders. Pooling our
sovereignty with others is not the same as giving it away, but in any relationship of mutual
interdependence, there must be give and take. We should not place ourselves in a position
where our European partners view us as obstructing the progress they might wish to see for
themselves, without properly assessing the consequences for us. Unfortunately, the result of
our referendum on the Lisbon treaty has the potential to do just that. I will resolutely lead our
efforts to address the concerns expressed during the referendum not just for Europe, but for
Ireland within Europe. I am convinced that our economic and social well-being will be better
served by such a resolution, especially in the troubled times in which we find ourselves.
  We must learn from our past experiences during difficult economic times. The business of
government is about making choices. I have great confidence in the wisdom of the Irish people
to take the long-term view and understand why we have made the difficult choices that we
have made. The alternatives were more unpalatable. The future prosperity of our people is
the Government’s primary concern. Ireland has a good economic future beyond the current
difficulties. Our actions this week and in the coming weeks and months will provide the basis
for Ireland’s economic recovery from this recession. The Irish people have faced considerable
adversity in the past and yet our creativity, ingenuity, patriotism and sense of purpose have
delivered great success, and will deliver it again.
  I wish to state clearly that the Government has chosen its course. No matter how difficult
the decisions, we will not waiver from acting in the long-term interests of current and future
generations. I believe that the budget presented by the Minister for Finance provides a clear
policy direction, a set of specific measures, and a framework of principles to guide us in the
period ahead. I ask the Irish people to stay the course, and with hard work and determination,
we will get through these difficult times and onto a path towards economic recovery and

  Deputies: Hear, hear.

  Deputy Seymour Crawford: There is no standing ovation this time.

  Deputy Enda Kenny: There is an air of unreality about the Taoiseach’s contribution.

  An Ceann Comhairle: Do you wish to share time?
             Financial Resolution No. 15:   15 October 2008.          (General) Resumed

  Deputy Enda Kenny: Yes, I wish to share time with Deputy Hayes. I recall the first time I
had to go abroad as a Minister of State representing the country. I found it strange to have all
this paraphernalia surrounding Ministers, where they had people carrying bags and doing all
sorts of things as if some super personalities had arrived on the scene.

  Deputy Dermot Ahern: Did the Deputy carry his own bag?

  An Ceann Comhairle: The Deputy, without interruption.

  Deputy Enda Kenny: After ten years of that, the crowd over there have become so stale, so
immune, so comfortable to the trappings of office that they have lost all reality with what they
have done in this budget.

  Deputy Dermot Ahern: The Deputy is out of touch.

  Deputy Enda Kenny: The Minister for Justice, Equality and Law and Reform is the only
Minister that I know of who gave a clean bill of health to a public representative who was
deemed guilty of taking corrupt payments. He is the last person to make a comment in this
House on such issues.

  Deputies: Hear, hear.


   Deputy Enda Kenny: Nobody has answered the fundamental question here. Two years ago,
this country was \6 billion in surplus. It is now \15 billion in debt. I accept that there have
been improvements in infrastructure and so on, but the people on that side of the House did
not take into account the warning signs that were there for many years of what could happen
if provision was not made for a crash that might follow a period of boom.
   It is fair to say that the workers of Ireland built the Celtic tiger. It was built through exports,
trade and manufacturing, but it got diverted down the road of property-based wealth, driven
by Fianna Fail in particular.

  Deputy Bernard Allen: And its pals.

   Deputy Enda Kenny: Yesterday’s budget has come against the background of a move from
a \6 billion surplus to a \15 billion deficit in the space of two years. That is unprecedented
anywhere in Europe. It was done because the Government allowed the competitiveness of the
country to slip seriously over the last few years. We lost export share as we put all our hopes
in the creation of wealth through the property bubble and ended up with the most exposed
financial sector in Europe. The Taoiseach came into the House yesterday and had the Minister
for Finance read out a Budget Statement that makes every person in the country pay for the
Government’s mistakes and pay for its waste. There is nowhere anybody can turn now but they
face down the barrel of some tax or other. The Taoiseach funked it yesterday when he had an
opportunity to lay out his plans based on the OECD report or based on what he intended to
do for public sector reform. This budget did not mention the detail of how that will be applied.
   Yesterday’s budget was disgraceful in what it contained and it was deplorable in what it did
not contain. The response it elicited was quite fascinating. Never before have I seen such a
universal rejection of a budget. One by one the statements came out. Groups such as IBEC,
ISME, ICTU, SIPTU, Aer Lingus, Ryanair, ASH, hospital personnel, the Irish Hotels Feder-
ation, Focus Ireland, Barnardos, all criticised this budget. Companies, trade unions and interest
groups who have never before agreed, found themselves unified in universal and total rejection
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

  [Deputy Enda Kenny.]
of the budget. I could not believe that not one single agency, organisation, company or union
had anything positive to say. Then late in the evening, just one positive and enthusiastic
response appeared. One single, solitary organisation welcomed the budget and that was the
Construction Industry Federation.

  Deputy Jim O’Keeffe: Mr. Parlon did not change his spots.

  Deputy Enda Kenny: It is good to see that the Government is at least consistent. In good
times and bad it keeps things constant; it may disappoint the nation, but it never disappoints
the construction industry.
   I also put forward the view that there should not be any cut in the capital programme and
workers, tradespeople and craftsmen could be transferred from the collapsed residential hous-
ing sector into other areas of the construction industry such as schools, roads and other infra-
structure projects. The problem is that the major party in Government, Fianna Fail, has been
in office for more than ten years. It has claimed credit on every occasion that the sun shone.
However, the Government fell asleep in that comfort zone and became immune to the realities
of what is happening on the street. It ignored the warning signs that were put up in flares for
long enough on a range of issues. The Government has been too lazy, too stale, too arrogant,
too out of touch with the pressured lives of the mortgaged poor.
   Yesterday, the Minister for Finance, having already likened himself to the American Pres-
ident who dragged his nation out of a depression, went even further in his presumption, in his
out of touch impertinence; he called for patriotism when the Government expects every person
to pay for its wanton waste and its playing free and easy and reckless with the economy and
the taxes of the people. Instead of spending the next few days spinning this disaster to the
media, the Taoiseach should try meeting some of the people who are now impoverished, whose
standard of living will drop, who are being punished. He should try telling these exhausted
men and women about the patriotic action they are taking today in paying for the Govern-
ment’s outrageous and reckless mistakes.
   I can promise the Taoiseach if he does this, he will get a short, two-word answer from them.
It is very easy for a Government that stopped listening to reality a long time ago to talk about
patriotism. However, if it matches its high-flown words to the real world outside this House it
will quickly find that brand of patriotism rejected with heavy losses. The people know how
badly they have been served. They know the Taoiseach and the Government he struggles to
lead have achieved the unbelievable; they have produced disaster out of success. They have
turned a surplus of \6 billion into a \15 billion deficit. For the first time in the history of the
State they have reversed progress and condemned hard working people and families to a lower
living standard than their parents and in some cases, their grandparents enjoyed. The Govern-
ment has reversed the standard of living and the quality of life for hundreds of thousands of
families. That is some achievement by the Taoiseach and the Minister for Finance in a short
time. They have switched this country from a position of surplus to massive deficit.
   The Taoiseach shmoozed his way through the last four budgets, dispensing gifts of govern-
ment expenditure to all and sundry, without any regard to the consequences. Everything was
sound. Anybody who mentioned any difficulties with this economy was guilty of national sab-
otage and talking down our country. Last May, when the Taoiseach was still claiming that the
fundamentals of the economy were sound, what planet was this Government living on? The
Taoiseach was asked at the time to explain his economic rescue plan. He knew we were facing
financial difficulties of the most serious type. There was no response from the Taoiseach. Yes-
terday’s budget did not reveal any plan. It is a series of tax levies and tax takes on every
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

taxpayer and worker. Yesterday’s budget fixed no fundamental problems and it ensured no
future. It is without hope, without aspiration or without inspiration and it does not offer any
enthusiasm to anybody with any initiative. It is a pick-and-mix punishment to a hardworking
nation. One of the headlines in a newspaper today states: “All pain but no gain”. It is a
desperate budget introduced by a desperate Government. This is panic, not policy; it is denial,
not direction.
   The Government has tried to hide its miserable performance behind the international bank-
ing crisis. Every time a television is turned on, the excuse is that it is America, Japan, China
or Europe. People have become blurred with the trillions and billions and the economic statis-
tics. We all know the difficulties that are so complex for so many countries as a result of the
international banking and global situation. We know the Government did not cause this crisis
and it is not responsible for the sub-prime sector in the United States which is another word
for reckless spending but it is responsible for the reckless spending in this economy. The
Taoiseach should not try to tell the House that the international global financial position is
responsible for the costs associated with doing business here, for the fact the Government has
never opened up competition, from Dublin Bus to the provision of broadband, to the provision
of energy, to the regulation in all this area. The Government has allowed a situation to apply
where it is now one of the costliest countries in the eurozone in which to do business, despite
the references in the Taoiseach’s speech to easy setting up costs for companies. The Taoiseach
has allowed a situation to come about where it is virtually impossible to do business, between
regulation, cost and the beating down of small businesses. Before this time next year, there will
be hundreds of retail outlets closed down because they cannot pay the commercial water
charges, never mind meet the commercial rates being applied by local authorities. The answer
from the Minister for the Environment, Heritage and Local Government has been to change
the light bulbs and give people bicycles.

  Deputy P. J. Sheehan: In the dark.

  Deputy Enda Kenny: A total of 50,000 people joined the dole queues this year, the first year
of the Taoiseach’s leadership and 100,000 more will join those dismal queues next year. The
social welfare bill will rise by approximately \10,000 a month. Businesses the length and
breadth of this country are fighting for survival and as the foreclosure figures this week proved
many of them are not succeeding. Couples whose dream was to own their own home are now
paying more for a home worth hundreds of thousands less than they paid for it and in many
cases they were seduced into buying by a market controlled by profligate lending institutions.
What did the Government do for these families and young people?

  Deputy Padraic McCormack: They snubbed them.

  Deputy Enda Kenny: The Minister slapped a 1% levy on their shrinking incomes. He raised
VAT rates and these will apply in every household. He increased the price of petrol so that
last night lines of cars were drawn up outside every garage as hard-pressed workers tried to fill
the tanks of their cars before that extra cost came in. The Minister raised their motor tax, cut
what they could reclaim on their medical expenses and added \10 to every air flight they take.
The 16 people who left my town for Australia would have paid that were they here today. The
other young people leaving this country on the emigrant aeroplane to seek work in countries
where it is available will be taxed for flying out of Ireland. The Minister hiked hospital charges
to make it more difficult for people to bring their sick children to accident and emergency
departments. He reduced their mortgage relief and the relief on money they are trying to put
into their pensions. He slapped \300 extra on secondary school bus tickets and \600 on third
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

  [Deputy Enda Kenny.]
level registration fees and reduced child benefit on over 18s by 50%, which is despicable given
that the mothers of Ireland in the main have raised their children to that point.

  Deputies: Hear, hear.

   Deputy Enda Kenny: That is what the Minister did yesterday to middle income families.
Everywhere they turn there is a tax or levy. They are faced with increased taxation by Fianna
Fail in government. This is a declaration of war on the middle classes. It is also a war on the
future. The Minister has driven a stake through the heart of education. The Government went
around the country last year holding public meetings where thousands of people turned up. To
these meetings it sent Ministers’ representatives and letters, pledging to reduce class sizes
because it believed in giving parents, teachers and children the best opportunity to provide for
the future. The Government has driven a stake through that and its collapse of its commitment
to decrease class sizes at a time of pressure like this is contradictory to what has just been said,
that the Government wants to build a knowledge future with well qualified, confident young
people who are able to stand on their own feet against their peers from around the world. That
cannot be done with increasing class sizes and the withdrawal of teachers of English in classes
where many students have no English, which Deputy Hanafin was forced to pledge when she
was Minister for Education and Science. The Government has made it harder on middle-
income and lower-income families and on children in the primary sector, who will struggle even
more as they go through secondary school and up to when they must compete internationally.
   The claims that the Government wants to build a knowledge economy are not worth the
paper they are written on. They are like most other Fianna Fail promises, broken promises. It
was an election winner to say we wanted to become a knowledge economy. The Ministers
should go around the country — as many of them do, or are driven around the country — and
look at the lack of broadband and communications capacity to do business. They should exam-
ine the structure of IT facilities in schools and the reneging on the \252 million in the prog-
ramme for Government that was to be spent on that. They should look at the divergence of
capacity and skill level across the educational spectrum. If the Government bothered to look,
it would see that we struggle and yesterday’s decision will make it even worse.
   Yesterday, my colleague, Deputy Bruton, described the budget as hitting “any family and
every family, any business and every business”. He is right, just as he was right in recent years
when he highlighted the failure to manage soaring Government expenditure, the failure to
reform the public sector when the need for reform was clear, the danger of building spending
programmes on the back of temporary tax windfalls from an overheating property market and
the failure to take hard decisions. Deputy Bruton pointed those out. Yesterday I read his
critique of the 2002 budget. It is very similar to the present position, except this situation is
even worse. Similar warnings came from the IMF, the OECD, the ESRI and the Central Bank.
Anybody could have seen these warning signs. Ten years ago in County Clare a young econom-
ist, Mr. David McWilliams, predicted seven years of plenty followed by a period of bust when
five principal elements would apply, such as breaking the growth and stability pact, the destruc-
tion of the housing sector and the collapse of the banks. The Government and the Taoiseach
did nothing about it. The Taoiseach did laps of honour when his predecessor left and he was
entitled to some lap of honour on taking up office. He took the ball from European business
and his speech here about being at the heart of Europe is vary far from Fianna Fail’s effort in
that campaign last summer.

  Deputies: Hear, hear.
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

  Deputy Enda Kenny: The result of yesterday’s efforts is that taxpayers are punch drunk.
Everywhere they go they will have to pay. The Government is making every person pay for
what has happened. This should have been stopped before now. The recent Comptroller and
Auditor General’s report highlighted the ludicrous extent of waste in the HSE, the Department
of Justice, Equality and Law Reform and a range of other Departments, but the Government
did nothing about that. Yesterday’s response regarding the HSE and the public service is
merely that there will be a redundancy programme.
   The Government has parked decentralisation. We believe in well managed and planned
decentralisation, but the plan to move 10,000 public servants to 53 locations within three years
was turned into a shambles. The Government has made a list of places that are in limbo until
2011. It is funny that it should be 2011, a year before a general election. I suppose the Govern-
ment will throw up that flare again and expect people to believe it, as on this occasion. Last
week Deputy Mitchell asked questions on arts, sport and tourism. Two decentralised officials
left Killarney at 7 a.m. to get here to assist the Minister to provide answers to Deputy Mitchell’s
questions. The train to Mallow broke down, then the second train broke down. They were on
mobile telephones and because of the lack of capacity they could not be heard in Dublin. It is
the tale of the disappeared. They never arrived to provide solace and comfort to the Minister
for Arts, Sport and Tourism who was here trying to answer pertinent questions from Deputy
Mitchell last week.

  Deputy Bernard J. Durkan: Where are they now?

  Deputy Alan Shatter: Have they got back yet?

   Deputy Enda Kenny: That is what happens when one has an unplanned decentralised system.
If Departments were decentralised all over the country when the banking crisis erupted, there
would have been chaos. A number of years ago we pointed out how decentralisation should
have been implemented. Where decentralisation was planned in Donegal, Tullamore and other
places around the country it has worked very well. Parking it in limbo until 2011 is obviously
a political ploy to reactivate it at some stage.
   The simple measure of the Government’s performance yesterday is that we are demonstrably
in a far worse position than any of our European neighbours. No country has been immune to
the banking crisis, but when the international financial tsunami hit they were in a far better
position to withstand it. No country has been as apathetic, lazy or smug in its response to this
crisis. We saw what happened in Spain. In our recession, into which the Taoiseach has led us,
yesterday’s budget offered no light at the end of the tunnel. People know they are poorer now.
They are worse off in that they will have to pay more. In terms of taking the major decisions,
the Government funked this. In the Government’s war on the middle classes an ordinary PAYE
worker taking home \50,000 loses \1,000 of his or her income directly and then faces a series
of extra costs and stealth charges, draining away that income, if he or she is lucky enough to
be able to keep his or her job.
  As the Taoiseach rightly pointed out, the people have endless courage and an unequalled
capacity for work, but this morning they will read that the consequences of this budget will be
a seriously lowering of their standard of living. Many of them will be tipped into poverty.
Nothing corrodes a family like poverty which is brought about by circumstances it cannot
control. The new income levies are precisely that. They are crude in design and impact. In the
past when we had major problems we levied the banks. Now that the banks have caused us
enormous problems the Government has not levied them but slapped a levy on the mort-
gaged poor.
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

  [Deputy Enda Kenny.]

  I note the Minister for Finance yesterday judiciously leaked the fact the Government intends
to reduce wages in the banking sector, as a diversion to what is happening today. The spin
machine is in full flight, particularly in the Department of Social and Family Affairs. We were
told last July there would be no cutbacks in education, health or social welfare and that the poor
and vulnerable would be protected. We know what the spin is but the reality is very different.
  Pensioners who are to get an extra euro per day will see the value of that increase go down
the tubes when their medical card is means tested. The Government does not seem to appreci-
ate the mentality of elderly people who were awarded a medical card by the State. The
Taoiseach has said that some of them will receive a \400 grant towards their medical expenses
but the vast majority of such people have respiratory illnesses and will not use the \400 grant
because they are afraid to go to the doctor in the first place. They will end up in hospital beds,
which would not happen had they gone to their doctor in the first place.
  The Government set up a system to award medical cards to all those over 70 and the recipi-
ents were comfortable with that. Had the Government said in the beginning that it intended
to give medical cards to those over 70, subject to a particularly flexible means test, those who
are well off and over 70 would have accepted that. Instead, the Government introduced a
universal scheme, which those over 70 accepted and with which they were very comfortable.
Many elderly people will not use a GP-visit card or the \400 grant because they are afraid to
go to the doctor in the first place. They will get so ill that they will end up in hospital and on
trolleys, as the Minister for Health and Children knows only too well. The Government’s
actions in respect of these medical cards is deplorable and despicable.
  This budget is all about taking back from diligent people who carry no responsibility for the
disaster that this Government has failed to avert. There are cutbacks in medical care provision
and increases in accident and emergency charges. The Taoiseach clarified the position this
morning regarding nursing homes, raised by Deputy Michael Noonan yesterday, although we
do not yet know the final shape of the fair deal legislation..
 This nation faces a cut in direct front line services in education and increases in class sizes.
Does anyone remember the promises made by the former Ministers for Education and Science,
Deputies Micheal Martin and Noel Dempsey? It is a case of give a thing, take it back.
  For families, this budget is a double-edged sword. The pain starts here and now but the real
suffering will begin in six months’ time. If the Department of Finance has got its figures wrong,
in terms of the international projections, then God help Ireland next year. The Government
has fleeced us through taxes on petrol, travel, capital gains and so forth, with the prospect of
more to come for every citizen next year.
  The Department of Finance got all its figures wrong in recent years. It got all the figures
wrong for this year and yet it can predict what the international situation will be next year and
the year after. Fianna Fail in Government has suddenly found the crystal ball and the path
back to budgetary efficiency, a strong economy and competitiveness. It will achieve these by
taxing every person to pay for its wanton mistakes and its fast and reckless use of taxpayers’

  The Taoiseach: How would Deputy Kenny do it?

  Deputy Enda Kenny: The Government has distanced itself from its own responsibilities.
  The Government set up the National Competitiveness Council and then ignored all of its
reports and recommendations. It has mired businesses in red tape and regulation. I urge the
Government to talk to shop owners and small business people. They are spending half a day a
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

week filling in forms for the Government and now they will have to do more. The employer
of the 16 year old who works for a few hours on a Saturday in a sweet shop or a coffee shop
will now have to fill in more forms for the Government to pay the 1% income levy. The same
is true for all of those in the minimum wage sector.

  Deputy Mary Harney: There was no minimum wage when Deputy Kenny’s party was in

   Deputy Enda Kenny: The banking sector which in many ways was responsible for so much
angst is now in a bizarre relationship with the Government. We do not yet know the extent of
the bad debt or rolled up interest in that sector. I hope that when the Government publishes
its scheme tomorrow, all of that detail will be made available so that we will know to what we
are signing up.
  This Government continues to take money out of the economy rather than getting better
value for the money it spends. It commits us to massive borrowing each and every day, with
more to follow next year, up to \13.5 billion. It is horrifyingly over-optimistic for next year.
This budget is disastrous.
   The so-called plans that were set out yesterday are not plans. There was no detail or forecast
and no clear method for reforming the public sector spelled out. Some of the best people I
have met in my life work in the public sector. The Government will make the taxpayer pay for
many of them to become redundant because it says they should not have been employed in
the first place. The former Minister for Finance, Deputy Charlie McCreevy, increased current
spending and the Government hired 30,000 more public servants, most of them in admini-
stration. The Government now tells the taxpayer that it plans to get rid of those staff because
they should not have been employed in the first place but it provides no detail as to how this
will be achieved. This process will drift and drift, as the Taoiseach knows.
   The reality is that for an easy political ride, this Government mortgaged the country to the
builders, developers and speculators. It created a new elite, which is now demanding that the
taxpayer bails it out. The Minister for Finance has a name for this. It is called patriotism. The
new definition of Fianna Fail patriotism is war on the middle classes and businesses and a
failure to protect the vulnerable. This is a disastrous budget, for which the Government will
pay the price.

  Deputy Brian Hayes: The net effect of yesterday’s statement by the Minister for Finance to
the House, in terms of the education budget, is that children will pay the price for Fianna Fail’s
incompetence over the past five years. The children in primary and post primary schools must
pay the price for the Government’s incompetence, waste and wanton disregard for financial
   The Taoiseach lectured the House this morning about honesty in this debate. Let us have that
honesty from the other side of the House. When the Minister for Finance gave his statement to
the House yesterday, he did not refer to cutbacks in education. Yet, within a matter of two
hours, the Minister for Education and Science, who appears to have done a runner today and
is not about the place at all, produced a list of cutbacks which runs to 32 in total. There are 32
cutbacks in the Education and Science Vote planned for 2009 but the Minister for Finance in
the House did not refer to this yesterday. If we are to take patronising lectures about honesty
in this debate, let us put all the information out there and stop spinning, as this Government
has done for the past 11 years or so. Let us call it as it is — we are asking children to pay the
price for the Government’s incompetence. That is the reality that faces teachers, parents and
students today.
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

  [Deputy Brian Hayes.]

   The education budget here has historically been smaller than education budgets in other
European countries because the religious orders provided free education for many years,
although that has now changed. We spend approximately 4.6% of our GDP on education,
              which is the second lowest in the European Union. Another problem is that we
12 o’clock    have a very high number of students in the age cohort for formal, full-time edu-
              cation. We do not spend enough on education and we spread the money so thinly,
throughout the sectors, as to make no real difference. The situation will get much more difficult
next year throughout all sectors of education. I want to make one proposal to the Minister for
Education and Science when he finally manages to get to his seat today and if he does speak
in public on this issue. He needs to publish a revised programme for Government in the edu-
cation area and stop this wish list and phantom list currently in place to which the Government
has allegedly signed up.
   I also want to hear from the Green Party. When the deal was done last year, Deputy Trevor
Sargent was a bit like Neville Chamberlain with “peace in our time” when he promised \350
million extra in services each year for the next five years. He also promised a reduction in class
size and I will come to that. The Green Party has a responsibility to come to the plinth and
tell us exactly how it has all gone so wrong. Why has it lost the debate within Government
when it comes to the education vote? I never thought I would state this, but even at this stage
Deputy Mary Hanafin should return — all is forgiven — as the situation has deteriorated
rapidly since her demotion to the Department of Social and Family Affairs only a matter of
months ago.
  With regard to class size, prior to the general election, 20,000 parents were brought to public
halls throughout the country. I call on the same organisation which brought those 20,000
parents into the public domain——

  Deputies: Hear, hear.

  Deputy Brian Hayes: ——to recall those meetings and remind them of the blatant lies told
by the Members opposite during the course of the election campaign. Let us revisit that cam-
paign because we need to expose those who spoofed the Irish people and parents on this issue.
  In 2002, the then Minister, Deputy Mary Hanafin, promised that by 2007 no nine year old
or younger would be in a class of 20 or more. As I stand here today, 200,000 of those children
are in our primary school system and in classes of more than 20. A blatant lie was told in 2002.
The Government went further in 2007.

  An Ceann Comhairle: The word “lie” may not be ascribed.

  Deputy Phil Hogan: What would the Ceann Comhairle describe it as?

  Deputy Alan Shatter: It is an untruth.

  Deputy Brian Hayes: I am in the hands of the Ceann Comhairle.

  An Ceann Comhairle: The precedent is “untruth”.

  Deputy Brian Hayes: In terms of the untruth then, in 2007 the Members opposite promised
the staffing schedule would go from 27:1 to 24:1 in the first three years of this Government.
What has happened? From 1 September next year we will have 400 fewer teachers in our
schools. Class size is the second worst in the EU and we are behind a range of eastern European
            Financial Resolution No. 15:   15 October 2008.     (General) Resumed

country which went through the communist era. It is some achievement for the republican
party opposite.
   On 1 September next year we will have the worst class sizes in Europe. We have a responsi-
bility to the young people in the system and to their parents to do the best we can. We cannot
do this with a class of more than 30 children where the range of issues which apply must be
dealt with. We need clarity from the Government.
   When Deputy Mary O’Rourke as Minister for Education in the 1980s introduced the famous
circular that led to public demonstrations and it was never enforced.

  Deputy Michael D. Higgins: That is right.

  Deputy Brian Hayes: Will the Government reconsider its proposal to slash the number of
teachers in schools? Otherwise, it will feel the wrath of parents between now and 1 September.
There is historical precedent for doing a U-turn on this. The then Minister, Deputy Mary
O’Rourke, did it in the late 1980s and the Government should do it today.

  Deputy Phil Hogan: No bother.

  Deputy Brian Hayes: We also need clarity from the Government on the question of car
parking charges. Will every teacher in the country who brings a car to a school car park have
to pay the levy?

  Deputy Padraic McCormack: Correct.

  Deputy Brian Hayes: Is this the Government’s position? That is some selling point to the
INTO, the ASTI and the TUI. The Government will have a lot of breakfast with that.

 Deputy Phil Hogan: Does the Minister for Enterprise, Trade and Employment, Deputy Mary
Coughlan, not have it in her notes?

  Deputy Mary Coughlan: Deputy Hogan knows all about notes.

  Deputy Alan Shatter: One does not have to pay if one has a chauffeur-driven car. Ministers
are exempt from the \200 charge because they are driven around the country.

  Deputy Mary Coughlan: I will gladly pay it. I do not have a chauffeur.

  An Ceann Comhairle: Deputy Shatter and the Minister can continue their conversation

  Deputy Brian Hayes: One of the most cynical cutbacks is with regard to English language
support. In the run-up to the 2007 election, following pressure from Deputy Enda Kenny, the
leader of Fine Gael, the Government stated it would change the rules on the numbers of
English language support teachers in schools with a substantial number of non-English speaking
pupils. We are returning to pre-2007 levels. Yesterday, in his private briefing to educational
correspondents, the Minister stated it will be two per school. Schools with a large number of
immigrant children will get two teachers. Where is Deputy Conor Lenihan now?

  Deputy Bernard Allen: Exploring.

  Deputy Pat Rabbitte: Overseas.
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

   Deputy Brian Hayes: His budget is now \6 million. There would be more taken over the
meat counter in Tesco in Tallaght over six months than he has to spend in 12 months. Where
is the Minister of State with responsibility for integration, Deputy Conor Lenihan?

  Deputy Pat Rabbitte: He was abolished yesterday.

  Deputy Brian Hayes: That was the best news I heard all day.
  On the issue of higher education, the new registration fees are effectively fees by the back
door. This is the most inequitable unfair stealth tax ever imposed on the PAYE sector. I make
no apology for my party’s support with the Labour Party for abolishing fees in 1996. We did it
for one reason. Whatever about arguments on access, and there is evidence to show more could
be done there, we did it to help the PAYE sector who were screwed as the self-employed could
cook their books to get the best benefit they could from the system and the wealthy could get
support through a covenant.

  Deputy Mary Coughlan: Does Fine Gael not represent farmers and commercial interests? I
thought they were its constituency.

  Deputy Phil Hogan: The Minister does not represent them anymore.

  Deputy Brian Hayes: This is the worst stealth tax and more importantly where is the Green
Party? Has it signed up to it? It would be a most extraordinary U-turn if it has.

  Deputy Eamon Gilmore: This budget is a vicious assault on working people and middle
income families. The people who work hard, play by the rules and pay for everything have
been hit very hard to pay for a decade of greed by high rollers and a decade of incompetence
and profligacy by Fianna Fail.

  Deputy Michael D. Higgins: Hear, hear.

  Deputy Eamon Gilmore: The budget is full of taxes, charges and levies targeted at middle
Ireland, while nothing has been done to ask the high rollers to pay their fair share. This is a
budget airline budget. The speech was full of high-minded waffle about patriotic action, but
                                                                                          ´ ´
when one looks at the small print, one sees the taxes and charges. My colleague, Deputy Roisın
Shortall, has begun to count them and has reached 30. The treacherous 30 cuts. This is where
the \1 fare suddenly becomes \100. However, those in first class will not be affected.
   This budget is not fair, it is mean. It does not protect the less well off, it attacks them. It
gives the meanest possible increase in social welfare, cuts entitlements, and takes medical cards
from elderly people. People who worked hard all their lives and paid taxes hand over fist have
had the rug pulled from under them by Fianna Fail. It does nothing to create jobs, in fact it
will destroy jobs and it makes absolutely clear that the Government has learned nothing from
its mistakes, but remains wedded to the same old failed developer-led economy.
   Of course, to learn from its mistakes, the Government would have to admit it made any.
That it refuses to do. It took it three months to admit there was any economic problem in the
first place and now it claims this whole mess is someone else’s fault. Given the turmoil in
international financial markets, it is easy for the Government to deflect blame elsewhere.
However, if it is all to do with international problems, why is Ireland the first eurozone econ-
omy to enter into recession? If it is the fault of the international economy, why is the downturn
in the Irish public finances greater than in any other country? If this is all the fault of someone
else, why are we seeing the fastest ever rise in the live register, long before the international
credit crunch?
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

  The truth is that this is a homegrown domestic recession brought on by failed economic
management by a Government which coasted in good times and is bewildered in the new
economic circumstances. When it came to office, the Government was handed an economy in
excellent condition in the middle of an export boom. From 2001, however, the export boom
faded to be replaced by an economy driven by a property bubble.
  I cannot recall the number of times I and my Labour Party colleagues called on the Govern-
ment to tackle rising house prices. Again and again we raised it but the Government refused
to act. Anyone who dared question the boom was denounced. When people raised legitimate
questions about the economy’s direction, particularly about the use of tax breaks to feather-
bed property developers, they were denounced by the former Minister for Finance and now
EU Commissioner, Charlie McCreevy, as left-wing pinkos and they advised the country to
party on. Not to be outdone, the former Taoiseach, Deputy Bertie Ahern, around the same
time, denounced anyone who questioned his Government’s economic strategy as a creeping
Jesus. As recently as July 2007, Deputy Bertie Ahern, in an address to the ICTU conference
in Bundoran, said he did not know why people who engaged in cribbing and moaning about
the economy did not commit suicide.
   Fianna Fail did nothing to limit the growth in house prices. It refused to curtail speculation,
to implement the Kenny report, which would have controlled the price of building lands and
it remained addicted to property-based tax incentives. That is why we have a recession and
why people on low and middle-incomes are being asked to pick up the tab.
  There is a bailout for the banks and property speculators. There is none, however, for a
young couple who took out one of those 100% mortgages now faced with higher mortgage
repayments, job insecurity and being hit with a series of further tax hikes.
  The only place a person in those circumstances can go for help and advice when the banks
and building societies are descending on them to repay the mortgage is the Money Advice and
Budgeting Service, MABS. It is interesting it is one of the State agencies to be emasculated
under the guise of rationalisation. MABS will be amalgamated with the Citizens Information
Board instead of being allowed to continue providing valuable, professional and independent
services to people in money trouble.
   It is also remarkable the Combat Poverty Agency will be hauled back into the social inclusion
unit in the Department of Social and Family Affairs, the unit which gave this budget a clear
bill of health yesterday. This is a case of the watchdog being withdrawn to the kennels. The
Government does not want any independent voice examining how it is dealing with the plight
of poor people.
  When economies get into trouble, there is always a hunger for fiscal austerity. No matter
where the recession starts, the first course of action is always to cut public services. The cry
goes up, “Let there be pain”. Pain for whom? It will not be the stockbrokers or the bankers
but the patients on trolleys in Drogheda and every other accident and emergency department.
We are told the economy needs tough medicine and people are advised to take it. People on
an accident and emergency trolley would happily take their medicine if they could only get
seen by a doctor. We are told it is time for tough decisions, but tough for whom? It will be
tough for people losing their jobs and having their entitlements cut. They are the people who
will have it tough.
  Ministers give lectures on the need to be responsible. The cost of their failures will fall on
the hard-working women and men, already experts on responsibility because they shoulder it
every day. The people who work hard, nurture others, pay for everything and play by the rules
are the ones who will carry the responsibility in this budget.
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

  [Deputy Eamon Gilmore.]

   A family on a modest income will easily pay \2,000 more in tax as a result of this budget. A
family on \60,000 will pay \734 extra in tax. A family with a child going to college will pay
\600 more in fees. The Government seems not to know that the transition year exists and
means many children do the leaving certificate at 18 yet child benefit for them has been abol-
ished. If a family has a five year old, child care payment will be cut by \550. A family with
medical expenses of any kind — it is not unusual for families to pay \2,000 or more in medical
costs for someone who needs special care — will have its tax refund cut in half.
  A family that must drive to work will pay \200 to park the car at work or pay \400 to use
the park-and-ride facility at the train station. We still have to hear how this new car parking
tax will be applied. Will this involve everyone who has a car parking space?

  Deputy Mary Harney: It applies to places of employment.

  Deputy Phil Hogan: We can all use the bike.

  Deputy Bernard Allen: The Minister will be all right anyway.

  Deputy Eamon Gilmore: Will this apply to those who have temporary use of facilities and
drive to work some days but not on others? Will they have to pay the full amount? This is an
example of finding every possible means to inflict additional taxes on working people.
  These same families will pay more in so-called voluntary contributions in schools because
school funding has been frozen while school expenses have rocketed. They will pay more for
petrol to go to work. They will pay more to visit an accident and emergency department if, by
some chance, they happen to have an accident or an emergency and cannot pop into the GP
on the way. They will pay 0.5% more on VAT on everything else they spend.
   As they munch on their breakfast rolls this morning, the people in the commuter belt who
voted Fianna Fail back into office in large numbers have been betrayed. They will carry the
can. Perhaps the best expression of the Government’s philosophy came, not from any Minister
but from its devoted friend and champion, the chairman of Anglo-Irish Bank. Safely protected
from the consequences of his failures by the Government guarantee and having pocketed the
largest welfare cheque ever written, he was prominent in his call for pain.

  Deputy Bernard Allen: It was shameful.

  Deputy Eamon Gilmore: Cut medical cards and child benefit, he said. If the economy were
the Titanic, it would be women and children last while the bankers got the first and most
comfortable lifeboat.

  Deputy Bernard Allen: Are the Ministers listening to this?

  Deputy Eamon Gilmore: In Mr. Fitzpatrick’s world, which is also the world of Fianna Fail,  ´
the Progressive Democrats and the Green Party, children and old people come last in the
budget. Class sizes are getting larger Cuts are being implemented for language support teachers,
the early school leavers programme, the school books scheme, grants for youth services, while
in-service development and school transport charges are being increased. After all the years of
prosperity, we still do not have a preschool education programme and the early years subsidy
has been cut.
  Mr. Fitzpatrick must be one happy banker this morning with what has happened to the old.
Pensions will increase by a mere \7 while medical cards have been removed from the over 70s.
Rather than confront the vested interests in the medical profession, which made the scheme so
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

expensive, the Government has targeted the over 70s. This move will cause untold distress and
anxiety for older people.
   As I have repeatedly said, the problem in the public finances has been caused by the
recession, not the other way around. What we needed, therefore, was a budget that would
stimulate economic activity and get people back to work. Instead, we got the opposite. This is
a deflationary budget, which will suck money out of the economy and reduce purchasing power.
The knock-on effect will result in job losses.
  This is just year one of a three-year strategy to cut the deficit by 5% of GDP. That is a
severe fiscal contraction by any standards. Corrective action is necessary, but we are in the
middle of an unprecedented banking crisis, which has already led to a major tightening of credit
conditions in the economy. At the same time, we are facing a major international recession
and downturn in international trade, which will limit exports as a source of demand. For the
Government to further curtail demand will cost jobs.
   One cannot compare Ireland now to the country it was in the 1980s and say that fiscal
contraction is good. In the 1980s, Ireland had its own currency, whereas it is now part of the
euro zone. That fact fundamentally changes the equation for budgetary policy. Our Govern-
ment deficit will not affect interest rates or inflation. Given our low debt-income ratio, the
macro-economic risks of Government deficits are limited. That is not to say that we can run
large deficits indefinitely. I am not suggesting that, or that difficult decisions are not required,
but taking 5% of GDP out of the economy over three years is very risky indeed. What is the
objective? To get back to a position, by 2011, where we will once again be funding capital
spending out of current income, at the expense of jobs?
  This is not the time to destroy jobs, it is the time to create them, but where are the initiatives
in this budget to create jobs? What is being done to find alternative employment for people
who are losing their jobs? Where is the major programme of re-skilling and retraining that is
needed for those 80,000 people who have joined the dole queues in the past year?
   The expert group on future skills needs says that at least 500,000 people must improve their
qualification levels over the next decade. Why not start now with those who are losing their
jobs? Thousands of people are losing their jobs in the house building sector. They could have
been put to work building schools, social housing, urban regeneration schemes or house insu-
lation, but what did we get? The Exchequer allocation for school buildings is being cut and the
insulation scheme amounts to \20 for each house that needs retro-fitting. Can nobody in the
Government effectively champion the need for energy conservation? Instead of a major retrain-
ing programme being launched, the back-to-education initiative is being cut.
  Two weeks ago, this Fianna Fail-led Government wrote the biggest welfare cheque in the
history of the State. Not a social welfare cheque, but a society welfare cheque. It was worth
tens of billions of euro and was made payable to some of the richest people in our country —
the bankers. We were told it was necessary because those same bankers lent out untold fortunes
to property developers, the friends of Fianna Fail. They are the people who pay for expensive
advertising campaigns which tell voters that only Fianna Fail can manage the economy.
   The Government has been spinning hard that this budget will protect the vulnerable at the
expense of the better off, but it will do nothing of the sort. Social welfare incomes have been
increased by the bare minimum of 3%, in a year when the price of bread is up 17%, flour by
34%, milk by 25% and bottled gas by 15%. That is why the Society of St. Vincent de Paul
called for a \15-per week increase in welfare rates. Instead, however, they got a pathetic \6.50.
If somebody on social welfare is also on a rent allowance, \5 of that \6.50 will be clawed back
by an increase in the minimum contribution that social welfare recipients on rent allowance
are required to make to their rent payment.
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

  [Deputy Eamon Gilmore.]

  Increases in the fuel allowance are paltry and progress on all other social welfare areas has
been stalled. The living alone allowance, a particular concern of Age Action, has been left
untouched. A set of mean-spirited, unfair, harsh and unwarranted restrictions has been placed
on people who have just lost their jobs and have recently signed on. These are the people who
had a contract with the Government; they paid their PRSI and never expected to have to
collect benefits, but now their entitlement to claim benefit has been severely restricted.
  We were told that top earners would pay most, but that is simply not so. In fact, the budget
booklet shows that a couple on \120,000 will pay the same, in percentage terms, as a person
on \60,000. The low paid are now effectively in the tax net, wiping out the additional increase
they were supposed to receive under the social partnership agreement.
  The spin from the Government this morning was that Labour had introduced the same type
of levy in 1993. We did so, but made sure to exempt people earning less that £170 per week,
which is the equivalent of \416 today. Moreover, anyone on a medical card was exempt from
the levy.
 I will quote from the budget speech of the then Minister for Finance, Deputy Bertie Ahern.
He may not have been socialist himself, but at that time he was surrounded by a few socialists.

  Deputy Sean Power: Where was Deputy Gilmore then?

  Deputy Eamon Gilmore: The then Minister for Finance said:

     The new levy will be at a rate of 1%, but with an income exemption in order to protect
  the lower paid. In the case of the self-employed, the exemption will apply where income for
  the year is not greater than £9,000. In the case of employees, the levy will not be payable in
  any week where the income is not greater than £173. In setting the income threshold at this
  level, rather than at the general tax exemption limits, the potential full-year yield for the levy
  is diminished by some £20 million. However, in doing so, I have ensured that a further
  217,000 taxpayers will not be affected by the levy, over and above the 290,000 who are
  exempted from income tax.

If that same principle was applied today, it would mean that somebody on an income of
approximately \30,000 a year would be exempt from the levy that was introduced here yester-
day, which is of course a new form of taxation.
   Once again, however, the big tax breaks and tax avoidance measures have been left
untouched. Tax relief on mortgage interest for landlords remains at a cost of \572 million. Tax
relief for super-private clinics, so favoured by the Minister for Health and Children, remains
at a cost of \1 billion. The loophole that allows developers to avoid stamp duty on commercial
property is not touched. The great tax–break for the rich in small, self-administered pension
schemes remains in place.
  We still have the bank bail-out, including, without any explanation, dated subordinated debt.
Who holds that debt and why are they covered by the bank bail-out scheme and guarantee
when no other European country has covered it? Last weekend, the Paris communique             ´
explicitly referred only to the coverage and protection of senior debt.
  We still do not know what the great bail-out will bring to the Exchequer or what con-
ditionality will apply. On Monday, four of the most senior bankers in the United Kingdom
went to Downing street with jobs and left sacked. The only person who was sacked here last
Monday was the unfortunate manager of the Galway hurling team.
            Financial Resolution No. 15:   15 October 2008.          (General) Resumed

  It is not just Ireland’s poor who will suffer. Once again, as a country, we are reneging on our
commitment to the world’s poor by cutting overseas development aid. When the economy is
growing, we are told that ODA cannot keep up. When the economy is not growing, we are
told we cannot afford to keep our promise. If that is patriotism, then it is a pretty sad form of it.
  Government Ministers are saying that cuts will not affect health, education or social welfare,
but that is patently untrue. Hospital budgets are being squeezed, there is a long list of miserable
cuts in education and there are severe restrictions in entitlement to social insurance. Making
the poor pay is not just unfair, it is also unwise.
  If one wants to take a lesson from the history of Irish social partnership, it is this: we have
done best as a nation when we combined a strategy for economic growth with a determination
to protect the vulnerable and share gains. However imperfect, social partnership was based on
that formula. It did not go as far as many of us would have wished, but it was a powerful
dynamic nonetheless.
  If one looked across Europe after the oil shocks of the 1970s, it was the countries which
were able to share the cost of economic downturn fairly that emerged most strongly. This
budget has no strategy for growth, and contains no ethic of social solidarity. It contains a series
of spending cuts, some stupid and some just simply cruel.
   This is a budget from an era that is past. In recent weeks, the failings of neo-liberalism and
the Washington consensus have been shown up in glorious technicolour. For years, those who
have argued for equality and solidarity in our society have been confronted by a rigid right-
wing orthodoxy. The simple and simplistic view of history was that there was no more left and
right, there was only right; that regulation should be light, or better avoided altogether; that
the market was the only system that could efficiently deliver any economic or social need; that
financial markets were the ultimate expression of market efficiency; that greed was good; that
a small, and ever shrinking state was the only road map for future prosperity; that European
civilisation, with its regulated market and strong social spending was a fossil from another era;
and that global capitalism was incompatible with social solidarity and inequality.
   It turns out that the conservative, monetarist orthodoxy is spectacularly wrong. Those
assumptions have been turned on their head. Deregulation, it turns out, can be a recipe for
risky, and sometimes down-right dishonest practices which can put jobs, business and homes
at risk. Markets, particularly financial markets, are often irrational, and unregulated financial
markets can bring the world to the brink of economic meltdown. Greed, in the form of a hedge
fund, can bring down a bank and destroy jobs in the real economy. Government, it turns out,
has a role to play after all. If the neo-liberals had their way, there would not have been enough
Government left to organise the bailout. The European social model, though requiring reform,
provides a basis for stable sustainable growth, coupled with equality.
   For years, when the left argued that executive pay was grossly out of control, we were scoffed
at. One could not possibly restrict the pay of these masters of the Universe or the world would
come crashing down around our ears. Guess what, the world very nearly came crashing down
around our ears, and it may not be over yet.
   Where now are all those people who told us that inequality was a good thing, that it provided
the right incentives in the economy? Inequality is at the heart of the sub-prime crisis that gave
rise to the economic difficulties in the first place. When the investment bankers ran out of
developing countries to which to lend money, they found a Third World country in the heart
of the world’s greatest economic power, in the United States. Working-class America had seen
its income stagnate since the 1980s of Reagan, and they were the ideal target for sub-prime
lending. The international economic crisis had its roots in income inequality.
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

  [Deputy Eamon Gilmore.]

   Political economy is back. Equality is not an optional extra or a drain on growth. It is a basic
requirement of a civilised society and of economic progress. The decisions made in this budget
matter to real people in the here and now. In the run-up to this budget, there has been a
clamour for hair-shirts, so long as someone else wears them. The Government, it is argued,
must manage its affairs like a family or a business, and balance its budget. That, too, was the
philosophy that informed Government responses to the Great Depression of the 1930s. It was
that same conservative view that pushed the world into depression — bail out the bankers, and
hammer those who pay their taxes and play by the rules.
   On Sunday last, the Minister for Finance quoted President Franklin Delano Roosevelt, when
he said that the only thing we have to fear is fear itself. Like all quotations used out of context,
it can be used to justify anything but what the author had originally intended. It is worth me
finishing by reminding the House of some of the rest of that same speech, FDR’s inaugural. It is
worth remembering because it shows how the struggle for decency is always with us. President
Roosevelt stated:

    . . . let me assert my firm belief that the only thing we have to fear, is fear itself —
  nameless, unreasoning, unjustified terror which paralyses needed efforts to convert retreat
  into advance.
    . . . Plenty is at our doorstep, but a generous use of it languishes in the very sight of the
  supply. Primarily this is because the rulers of the exchange of mankind’s goods have failed,
  through their own stubbornness and their own incompetence,
    . . . Practices of the unscrupulous money changers stand indicted in the court of public
  opinion, rejected in the hearts and minds of men.
    . . . They know only the rules of a generation of self-seekers. They have no vision, and
  where there is no vision the people perish.
    The money changers have fled from their high seats in the temple of our civilisation. We
  may now restore that temple to the ancient truths. The measure of the restoration lies in the
  extent to which we apply social values more noble than mere monetary profit.

Let me repeat:

    The measure of the restoration lies in the extent to which we apply social values more
  noble than mere monetary profit.

I repeat that sentence because it underlines the approach the Labour Party in Ireland is taking
to our present economic circumstances, just as it underlines the approach being taken by FDR’s
successor, Senator Obama across the Atlantic.

  President Roosevelt further stated:

    Our greatest primary task is to put people to work. This is no unsolvable problem if we
  face it wisely and courageously. . . .

There was no New Deal in this budget. There was no attempt to create jobs. Instead, there
was an attack on old people, on poor people, and a vicious assault on working and middle
income families.
  I challenge the Government to put this budget to the test of the people. There is a vacancy
in this House. There is a by-election due in the constituency of Dublin South. I challenge the
Government to move the writ for that by-election to hold it now so that at least the people of
             Financial Resolution No. 15:   15 October 2008.          (General) Resumed

that constituency can give their verdict on what the Government is doing and on the lies the
Government told the people just over 12 months ago when they were re-elected to office.

  Deputies: Hear, hear.

  Minister for Transport (Deputy Noel Dempsey): I am glad to have the opportunity to speak
on Budget 2009, and to outline, in particular, how the transport agenda is being advanced by
this budget and how the money allocated to the Department of Transport will be spent in 2009.
  In general terms, the gross expenditure provision for the Department in 2009 is \3.6 billion,
that is, \2.8 billion for capital projects and \725 million for current spending.
  The total Exchequer provision for Transport 21 in 2009 is almost \2.4 billion. This year we
will allocate: \1.27 billion for public transport, \2.1 billion on roads, \35 million for the aviation
sector and regional airports, and \40 million on road safety. Those are the major expenditure
headings of the Department. In addition, some \607 million will be spent on improvement and
maintenance of regional and local roads around the country.
   I make it clear that provisions have been made to continue work on the critical public
transport projects of metro north and the DART interconnector. Despite our more constrained
economic circumstances we cannot and will not stop planning and providing future public
transport solutions. In this budget, the advanced works plus the planning for metro north and
for the DART interconnector continue.
  When we launched Transport 21 in 2005 we detailed an ambitious investment programme in
our transport infrastructure. The individual projects listed under Transport 21 were excellent
projects in 2005. They are still excellent projects today and they will be excellent projects in a
few years from now. There is no question of cancelling any of the projects despite the more
constrained economic circumstances in which we find ourselves today. However, as our econ-
omy has not grown this year in line with our expectations, or indeed anything like it, some of
the projects, mainly in the roads area, will have to be rolled out at a slower pace than we had
originally intended. That is not ideal and not what we wished. However, it is inevitable in the
current difficult economic environment.
  In these more difficult times it is important to look at how far we have come in recent years.
When we took office in 1997 the total capital provision for national roads and public transport,
the equivalent to Transport 21, was \306 million, as opposed to the \2.5 billion now. Just \12
million was being spent by the Exchequer on public transport investment, whereas today we
are spending just over \900 million.
   That money has been well spent. A great deal has been achieved in the intervening period.
We are on track to complete the five major inter-urban motorways by the end of 2010. This
involves the construction of almost 750 km of new road, approximately 390 km of which is
already open to traffic and the remaining 360 km is at construction. One tangible example of
the progress we have made is that it is now possible to travel on continuous motorway from
Dundalk to Portlaoise. We have revitalised the railways and rescued them from a slow decline
over previous decades. Under the railway safety programme we have renewed the physical
infrastructure and strengthened the management of safety. We now have one of the youngest
inter-city rail fleets in Europe. We also have one of the fastest growing rail facilities in Europe.
As services have improved, the public has responded and passenger numbers have grown sub-
stantially. Despite the economic downturn, those figures are remaining static at present. There
has been no loss to the railways.
 There has been major investment in the Dublin suburban rail network. The capacity of the
DART system has almost doubled, the original rolling stock has been refurbished, station
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

  [Deputy Noel Dempsey.]
platforms have been lengthened and much of the infrastructure has been renewed. There has
also been a huge investment in new outer suburban rail stock and an expansion in services.
The Luas network has proven exceptionally popular with the travelling public and now carries
over 28 million passengers each year.
  We have made a large investment in bus services. The fleet has been renewed and Dublin
Bus capacity has expanded by over a quarter.

  Deputy Thomas P. Broughan: There are no additional buses.

  Deputy Noel Dempsey: Bus Eireann’s commuter network has seen a major expansion.

  Deputy Thomas P. Broughan: Where are the buses?

 Deputy Noel Dempsey: I do not believe in sending empty buses around the city streets. We
must get value for the money we spend.

  Deputy Thomas P. Broughan: The Minister does not understand the schedules even though
he is Minister for Transport.

  Deputy Noel Dempsey: The Labour Party should accept that we should not waste public
expenditure in good or bad times.
  We have made huge strides on improving the accessibility of our public transport system for
persons with disabilities. Some 80% of the Dublin Bus fleet will be accessible by the end of
this year and approximately one third of bus stops in the greater Dublin area will have been
upgraded by then. All of the city bus fleet in the regional cities is 100% low floor and accessible
for people with disabilities.
  Despite the economic downturn, it is clear that 2009 will be another huge year for transport
projects. My aim is to deliver increased public transport passenger capacity. I will ensure that
project planning continues to ensure that sufficient projects are ready to start as soon as funding
becomes available.

  Deputy Thomas P. Broughan: Metro west has been slashed.

  Deputy Noel Dempsey: The Deputy would be better off listening than heckling. He might
learn something and not make false statements, as he did last night about the Navan rail line
and others.

  Deputy Thomas P. Broughan: I learned it last night; the \70 million is gone.

  Deputy Noel Dempsey: The Deputy should listen until I conclude my contribution. I will put
him right on a number of matters.
   I have endeavoured to continue the planning for all the public transport projects in Transport
21 and bring them to tender stage. None of them that was due to start next year is being
postponed. The projects will continue to be planned and designed, and public consultation will
continue to take place. They will be brought to tender stage as quickly as possible. I wish to
ensure that the five major inter-urban routes are on target for completion by 2010. The \1.27
billion provision this year for public transport will maintain the momentum of our investment
programme to date.
  In addition, a number of important projects in public transport will be completed next year.
Construction of the Luas extension from Connolly Station to Docklands will finish towards the
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

end of the year. Phase one of the western rail corridor from Ennis to Athenry will be com-
pleted, allowing for the introduction of an inter-city service from Limerick to Galway and a
commuter service from Athenry to Galway and the Cork-Midleton line will reopen, leading to
a major extension of commuter rail services in Cork.

  Deputy Enda Kenny: The Minister said “allowing for the introduction of an inter-city service
from Limerick to Galway”. With regard to the service from Athenry to Galway, will that be
by rail sometime in the future?

  Deputy Noel Dempsey: It is a commuter service from Athenry to Galway. It is inter-city at
the moment.

  Deputy Enda Kenny: Is that by bus?

  Deputy Noel Dempsey: No, it is rail.

  Deputy Enda Kenny: Will the route to Athenry be completed next year?

  Deputy Noel Dempsey: Yes.

  Deputy Enda Kenny: Is it bus from there to Galway? What does that mean?

  Deputy Noel Dempsey: It will allow for commuter rail.

  Deputy Enda Kenny: However, there is no timescale for that.

  Deputy Noel Dempsey: What we are doing in phase one of the western rail corridor will
allow for a commuter service from Athenry to Galway from next year, once it is completed.
The western rail corridor is obviously for inter-city services but it will also try to enhance
commuter services, such as the existing Ennis-Limerick commuter service.
   Investment in bus priority in Dublin and the regional cities will be increased in 2009. I have
asked the Dublin local authorities to give particular attention to the elimination of pinch points
on the bus network. There are approximately 43 pinch points on the quality bus corridors in
Dublin. These have been mapped at my request and a plan is in place to remove them within
a two year period. The one thing on which Deputy Broughan and I agree is that efficient and
effective bus services will be needed in the short and medium term as work continues on the
metro. I am anxious to secure quality bus corridors that actually work and that make it attract-
ive for people to use bus services.

  Deputy Thomas P. Broughan: The Minister needs the buses to run on them. He needs 300

  Deputy Noel Dempsey: There are sufficient buses to run the services we have at present. In
fact, the indications are that they could be run a good deal more efficiently so we could get
more bang for our buck. It is not a question, as we have so often been accused of doing by the
Opposition, of throwing money, or in this case buses, at the problem.

  Deputy Thomas P. Broughan: What about the frequency?

   Deputy Noel Dempsey: A number of things must be done including, which I hope the Deputy
will support, changed work practices and using the buses we have at present to their full poten-
tial. I look forward to the Deputy’s support as we move on that in the next six to 12 months.
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

  [Deputy Noel Dempsey.]

  Construction of phase one of the Navan rail line and the Citywest Luas extension will get
underway shortly, despite the doom and gloom preached in the House last night by Deputy
Burton. In 2009 we will continue to work on the Luas extension from Sandyford to Cherry-
wood; the four-tracking of the Kildare rail line from Cherry Orchard to Hazelhatch, allowing
the trebling of passenger capacity on that corridor; the roll-out of the 183 new intercity railcars;
and the city centre resignalling project. The latter is vital to the provision of adequate services
within the greater Dublin area. Expenditure will continue on a number of ongoing programmes,
including the railway safety and accessibility programmes.
  Increasing public transport capacity is one of my key priorities. Metro north and the DART
interconnector are critical components of the strategy, set out in Transport 21, to transform
the public transport system in the greater Dublin area. They will also provide for a great
increase in public transport capacity. Metro north is expected to carry 34 million passengers
per annum when it opens and will be able to carry more than 200 million passengers per year
in the longer term as development occurs along the route. The interconnector will remove a
major bottleneck in the Dublin rail system. When it is completed it will facilitate trebling
of the passenger capacity of the suburban rail network to more than 100 million passengers
per annum.
  The Railway Procurement Agency, which is responsible for the project, applied last month
to An Bord Pleanala for a railway order for metro north. The application clearly sets out the
route alignment, underground and surface sections and station locations. The public private
partnership tenders are due to be submitted to the Railway Procurement Agency in early
February. Once the procurement and the statutory approval processes are complete, the
Government will take a final decision on the project, based on a capital appraisal. This is a
long-standing requirement for all very large projects under Transport 21. Once the railway
order is in force, the Railway Procurement Agency will be in a position to commence enabling
works for the public private partnership project, such as the relocation of utilities. The 2009
Estimates include substantial funding provision for these works.

  Deputy Thomas P. Broughan: How much?

  Deputy Noel Dempsey: The total is in the Book of Estimates. I will obtain it for the Deputy
and let him know.

  Deputy Thomas P. Broughan: It does not state the figure specifically?

  Deputy Noel Dempsey: A number of enabling works must take place, including the purchase
of land. Some of these works are under way. The design cost must continue to be considered.
  There was much speculation on whether metro north was to proceed. Deputy Broughan and
I had discussions on it in the House and I acknowledged his acceptance of my advice not to
raise issues about whether it would go ahead. I thank him for this. However, I have heard
much ignorant comment about metro north and questions as to why we do not acquire buses.
To do what we want with metro north, that is, to move approximately 20,000 passengers in
each direction during peak travel times, we would have to invest in approximately 400 to 500
buses. There would not be sufficient road space to do so. If one were to opt for a Luas solution,
as some are advocating, the maximum number of passengers one could accommodate would
be approximately 8,000 per hour at peak time. Given that the population is to grow to approxi-
mately 500,000 to 600,000 by 2015-16, a Luas or totally bus-based system of public transport in
the north County Dublin area is a nonsensical proposition.
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

  If we could do nothing but carry out the metro north and interconnector projects over the
next four or five years, we would lay the foundation for a really good public transport system.
The investment involved in metro north should not be considered in light of the 30-year period
during which we will pay for it under the public private partnership but in light of the fact that
the system will serve the needs of the people for 50 or 100 years. This is why I am so committed
to making progress.
  Planning for the DART interconnector is also continuing and good progress is being made.
I have made it clear to CIE that I want to see this progress maintained and, where possible,
accelerated. In deference to people in business, particularly in the city centre, I want to mini-
mise the period of disruption and work on both projects together. Deputy Broughan and other
Members have raised this with me in the House. CIE is aware of the issue and is making a
considerable effort to address it. There are certain areas in which works must be carried out
sequentially but others in which they can be carried out simultaneously.

  Deputy Thomas P. Broughan: The railway order.

 Deputy Noel Dempsey: The target is to be ready to submit a railway order application to
An Bord Pleanala towards the end of 2009.
   The interconnector project only facilitates the expansion of the capacity of the suburban rail
network. Other measures are required to deliver that capacity, most particularly the electrifi-
cation of the wider suburban network and the purchase of new electric rolling stock. Planning
for these projects is ongoing. Electrification must be completed before the interconnector is in
place and we are committed to achieving this. The 2009 Estimates include a substantial pro-
vision for the continuing planning work needed for the railway order application and for the
commencement of electrification work.
   Buses are another key component of my strategy to increase capacity. I ordered a cost and
efficiency review of Dublin Bus and Bus Eireann. When that study has been completed and I
have considered its findings, I will decide on future bus investment strategy.
   It is clear from the commitment to the many public transport projects to which I have
referred that there is now a significant shift to more sustainable transport in the Government’s
national development plan. This should not come as a surprise to anyone because, when I
launched a public consultation document earlier this year, I outlined the Government’s vision
of having a sustainable transport system by 2020. I also outlined that, if we continue as we are,
travel trends in Ireland will be on a totally unsustainable trajectory.
  One could argue that the economic down-turn will solve the transport problem on the
grounds that less activity will lead to lower population growth, but that is a short-sighted way
of looking at the matter. Transport planning must be carried out over the medium to long term
and it is both hopelessly pessimistic and unwise to plan for the future based entirely on the
immediate economic difficulties. This is probably the trap we all fell into in the 1960s, 1970s
and 1980s.
  In carrying out the public consultation process on the sustainable travel and transport action
plan, I was surprised by the extent of the engagement. Nearly 500 thoughtful submissions were
received, a much higher response rate than normal, and the issues raised in the consultation
document resonated well with the public. People are concerned about the harmful effects of
motorised traffic, they recognise that efficient movement of goods is vital for our economy and
they are aware that how they travel in the future is one of the most important influences in
the quality of their lives.
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

  [Deputy Noel Dempsey.]

  I have consistently promised to publish the sustainable travel and transport action plan this
year to set out a new policy framework for transport to meet the Government’s vision. In
setting out the many transport investment projects being delivered in this budget, I reaffirm
the priority I and my colleagues attach to getting the new policy framework in place. I intend
to bring the draft plan and a proposed national cycle policy before the Government in the
coming weeks.
   In practical terms, I intend safeguarding the budgets for sustainable travel initiatives in the
Vote of my Department. I am maintaining the momentum of the green schools travel initiative,
which will target 260,000 school children by 2012 and which will, I hope, result in many of them
switching to walking or cycling to get to school. In addition, we have secured \10 million for
carbon reduction measures in 2009 related directly to transport. In addition to these sustainable
transport initiatives, we have also made provision in this year’s budget for the new Marlborough
Street public transport bridge, which will facilitate the metro works.
  Virtually all the national road Exchequer provision for 2009 is already contractually commit-
ted to the delivery of the projects on the major inter-urban routes. The NRA expects that six
major projects, totalling 143 km of dual carriageway road, will open to traffic between now and
the end of 2009. These are as follows: the N4, Lucan bypass; the N6, Athlone to Ballinasloe;
the N7, Nenagh to Limerick; the N8, Cullahill to Cashel; the N8, Fermoy to Mitchelstown; and
the N9, Waterford to Knocktopher. Over \2.5 billion worth of work will continue on 18 major
road projects next year, including phase 2 of the M50 upgrade, the Limerick tunnel, the Water-
ford city bypass, the Castletown to Nenagh section of the N7 and the Kilcullen to Carlow and
Carlow to Knocktopher sections of the N9.
  All these projects are proceeding on time and on budget and some will come in ahead of
time. Over 70% of the major inter-urban network should be open to traffic by the end of next
year. In the ten years 2000 to 2010, the State will have invested more than \8 billion in this
programme. Already, the Dublin to the Border M1 route was opened to traffic in August 2007
and construction is well under way on the remaining major inter-urban projects.
   The 2009 Estimates also include sufficient provision to meet contractual commitments on
the various regional airport projects and to meet our share of the cost of the City of Derry
Airport. Notwithstanding the difficult financial position, the \2.4 billion of Exchequer capital
               will allow us to make real and tangible progress in 2009 and to maintain our
1 o’clock      project planning into the future. In addition to the almost \2.4 billion of capital
               for Transport 21, over \600 million is being provided for the maintenance and
improvement of regional and local roads. These roads are a key component of our national
infrastructure and play a crucial role in the development of the country and the exploitation
of crucial sectors such as tourism. A further \50 million is provided for the maintenance and
management of national roads.
  I have provided almost \40 million for the Road Safety Authority and the Medical Bureau
of Road Safety. The good news about road safety is that what we are doing is working — I
acknowledge this is a concern shared across the House.

  Deputy Thomas P. Broughan: Why did the Minister cut the RSA budget?

  Deputy Noel Dempsey: Today, there are 35 more people alive than this day last year. Road
deaths in Ireland dropped by 30% in the period from 1997 to 2007. A total of 472 people lost
their lives on our roads in 1997 compared to 339 in 2007. This downward trend, which has
thankfully continued this year, was achieved despite the fact that there has been a large increase
in the number of drivers and vehicles on our roads.
            Financial Resolution No. 15:   15 October 2008.          (General) Resumed

  According to the European road safety performance index programme, the PIN programme,
which is run by the European Transport Safety Council, ETSC, Ireland is now ranked in the
top ten best performing EU countries for road safety performance. An ETSC report dated
8 October this year found Dublin to be the best performing European capital in reducing
road deaths.
   On the matter of driving licences and learner drivers, following changes made in the regu-
lations last October, the RSA and I made a commitment that all those on the waiting list on
30 October 2007, estimated to be 122,000 people, would be offered a test by mid-March 2008
and that by the end of June 2008, the waiting time for tests would be down to ten weeks. Both
of these commitments were met and every effort will be made to maintain this in 2009.

  Deputy Thomas P. Broughan: With much less money.

  Deputy Noel Dempsey: In response to Deputy Broughan, the RSA budget was more than
doubled last year from, I understand, \20 million to \44 million. Some \20 million of this was
for new works but \10 million was specifically to clear the backlog. We have cleared the backlog
and have managed to maintain this position, and we continue to hold on to a sizeable pro-
portion of the extra funding we got last year for that specific purpose.
   Funding for the Coast Guard and maritime administration is being maintained at its 2008
level of almost \44 million. The decision to maintain this level of funding in spite of the financial
restrictions reflects the vital nature of the services being provided. These services include the
operations of the Coast Guard which entail maintenance of a helicopter marine emergency
service at four bases around the country; funding of voluntary services of 55 Coast Guard
stations based around the coastline; and a pollution-salvage response programme and related
and incidental matters. The Coast Guard maintains a marine radio communications network
for marine and inland search and rescue, maritime safety information and vessel communi-
cation services.
  The Department is the regulatory authority for marine safety and marine environmental
protection. The main focus is on accident prevention through an appropriate combination of
regulation, a heightening of safety awareness and enforcement. The Department participates
at both EU and international level in the development and implementation of safety policies
and standards in this area. The Marine Survey Office carries out the initial approval of designs
and drawings for new vessels or modifications to existing vessels, and then carries out the
necessary surveys.
   Provision is also being made for Exchequer grants towards the costs of the Commissioners
of Irish Lights under an international agreement with the UK authorities regarding the pro-
vision of aids to navigation, the Royal National Lifeboat Institution, the weather buoys network
and Ireland’s obligations under the International LORAN-C agreement on marine navigation.
Funding is also being provided for the Marine Casualty Investigation Board. The allocation for
2009 provides for expenditure of \4 million on the Coast Guard’s radio communications for
essential upgrading of rescue centre radio communications. Some \27.5 million is being pro-
vided for the provision of the search and rescue helicopter services.
   The Government is to be commended on its decision to continue to target resources at
investment in the country’s economic infrastructure. It is clear evidence of the Government’s
commitment to, among other things, the Transport 21 programme and the delivery of a world-
class transport system for Ireland. Pursuit of this policy will leave us well placed to take advan-
tage of a recovery in the world economy.
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

  Deputy Shane McEntee: Have there been any developments on the Slane bypass from a
road safety perspective? The number of lorries has trebled in recent months. Will the Minister
consider this issue?

  Acting Chairman (Deputy Ciaran Cuffe): The Deputy can raise that matter by way of a
parliamentary question or in other ways. I call Deputy Enright.

  Deputy Shane McEntee: While the Minister is present, I thought he might deal with the

  Deputy Olwyn Enright: I wish to share time with Deputy James Reilly.

  Acting Chairman: Is that agreed? Agreed.

  Deputy Olwyn Enright: Yesterday’s budget was supposed to be a patriotic call to action, with
a “We are all in this together” motto. We are all in this together, not by choice, not because
we should be or because the rest of Europe is in the same mire, but because the main party in
power got us here. Every citizen is being asked to join hands and share the pain of the Minister,
Deputy Brian Lenihan, but he has ignored the fact that some are better equipped to survive
that pain than others.
  The Minister for Finance told us yesterday it is Government policy “to target resources at
those in greatest need”. If one takes that at face value, it sounds like a worthwhile policy. The
real test of this policy, however, was whether the Minister carried through on what he said,
but, of course, he did not.
   Many people will ask why it is only now we are hearing about those in greatest need and
why it is only now the Minister for Social and Family Affairs, Deputy Hanafin, is worried about
people becoming dependent on social welfare. Were there not opportunities in every budget
in the past 11 years to develop these concerns and tackle them head on?
  Targeting was not the Government approach up to now. The opposite was frequently the
case. I will give the House examples of the responses we have received from various Ministers
in the past when we discussed targeting payments. For example, the then Minister for Social
and Family Affairs, Deputy Cullen, told us not even a year ago that the policy of support for
pensioners has been for many years to give priority to increasing the personal rates of pension
rather than supplements such as the living alone allowance — no targeting there. The current
Minister, Deputy Hanafin, voiced similar sentiments in speaking about the fuel allowance less
than four months ago, when she stated:

     The income maintenance needs of those on social welfare payments have also been met
  in recent years through significantly increased primary social welfare rates. Government
  policy is focused on increasing social welfare rates to ensure that people can meet their basic
  living costs throughout the year and also achieve an improvement in quality of life.

There is no targeting there. Possibly the best examples are reserved for the Minister, Deputy
Brian Lenihan. As Minister with responsibility for children he did nothing to target child
benefit towards those who need it most, despite many recommendations about the creation of
a second tier. Yet last night on “Prime Time” he lectured us that the big issue in regard to
child benefit is that:

    “We have very high child poverty levels in this country still [at least he finally admitted it,
  but whether he will do anything about it is another question] because we insist on having an
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

  indiscriminatory untargeted approach to this question. I want to look at all the moneys that
  are available and see how we can target those who are most in need.”

Let us contrast that with his comments of just two years ago when he said “Government makes
choices and as Minister for children, I am delighted that this Fianna Fail-led Government has
consistently chosen to increase the level of direct payments to parents”. When did this change
of heart come about? When did the Minister change from being delighted to being indiscrimi-
natory and untargeted? Was it when he realised his predecessors failed children in the boom?
Now, those children will pay for it in a recession. What will the Minister do to target children
in poverty? He will wait for a report.
  Budget 2009 failed to protect the most vulnerable groups in society, those who are welfare
dependent, children, older people and lone parents. The Minister for Finance should define
for us what he means by “little people”. It is not a phrase I like or use as it is disparaging. If
he meant the people I mentioned, he has not helped them, nor has he lived up to the commit-
ments he had outlined. The elderly got several knocks. The withdrawal of the medical card will
probably ensure the Health Service Executive will appoint a few more administrators to deal
with that, but it will result in some elderly people opting not to attend a doctor. In some parts
of the country \400 will not even pay for six visits to a doctor, and that is assuming one does
not have to buy any medication or attend an accident and emergency unit. The increase in the
payment threshold for the drugs payment scheme by \10 will affect elderly people. One can
but wonder at the Fianna Fail and Green backbenchers, as well as the token Independents,
applauding increases in the old age pension that will not even keep pensioners in line with
inflation. Pensions should have been increased by at least \10. The \7 increase will be wiped
out when one examines the inflationary aspects of the budget. The same pensioners will be hit
by the increase in VAT, petrol and accident and emergency charges.
   I want to nail the lie about the increase in VAT. My opposite number has been on local
radio this morning claiming that it is all right because it is not on clothes or food and will not
hurt the vulnerable. That is to ignore the fact that it is on petrol and diesel. Pensioners still
drive cars. It is on kettles. Pensioners still like a cup of tea. It is on kitchenware, furniture,
washing machines and a host of other products that, believe it or not, pensioners still need to
use. Therefore, it hits them and, believe me, it hurts them. The \7 increase is pathetic. If the
Government that calls so frequently for Deputy Bruton to produce proposals had actually
listened to them, it could have afforded a little bit more and that would have made a huge
   In a debate in the House last week on energy poverty, promises galore were made that all
problems would be addressed. We know 227,000 households experience energy poverty. From
June 2000 to September 2008 electricity prices have increased by 134%. We have among the
highest energy prices in the European Union. There was a recent rise of 17.5% in electricity
costs and a 20% rise in gas prices. The cost of home heating oil has risen dramatically, and
further electricity and gas price increases are expected for January 2009. Higher food and fuel
prices are expected to continue to be above the general inflation rate of 4.3%. Anyone listening
last week would have thought fuel, insulation, central heating, better windows and doors were
all on the way. We were told the Government had a plan, an interdepartmental group had
been set up and meetings were taking place.
  I received a response to a freedom of information request from the Department of Social
and Family Affairs to the effect: “I see there’s an FOI request in from Olwyn Enright re contact
between our Minister and the Minister for CER re fuel poverty in the last 12 months. The
papers re the inter-depart group are all we’d have really”. Those papers consist of six pages,
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

  [Deputy Olwyn Enright.]
including two annexes outlining the current position, but nothing about how to address the
issue unless it is all contained in the four lines that are blackened out, which I doubt.
  While welcome, the increase in the home energy savings scheme which has been allocated is
four times more than the warmer homes scheme. That shows again that those most in need
have not been positively targeted. How many houses will realistically be insulated with \5
million? How exactly is it to be supplemented by funds from industry? Why has the Minister
for Communications, Energy and Natural Resources, Deputy Ryan, chosen a scheme that tar-
gets the vulnerable as the one to be dependent on dig-outs from industry?
  People should know about the cynical nature in which energy poverty is being addressed.
We all know about the Government’s love of press conferences and soft focus interviews. So
much so that this ethos now pervades among some officials. E-mails back and forth from
Department of Social and Family Affairs officials suggest “a softer ministerial announcement
— might take the form of a visit to someone who has had their house insulated etc.” That
shows the way the issue is being addressed and it reflects poorly on both Ministers. It will
probably be difficult to find somebody who has had his or her house insulated, especially in
certain parts of the country.
   A total of 250,000 people are currently on the live register and the figure is growing. More
than 300,000 people are expected to be on the dole by the end of 2009. I suppose there should
be some relief that the Minister, Deputy Hanafin, finally realises there is a problem. When the
matter was debated in the Dail only last May she told Opposition Deputies, in particular
Deputy Penrose, that the Opposition was being “a little bit dramatic” about the live register
figures. It took until now for the Government to accept there is a problem, but no solutions
have been offered for the unemployed.
   Last week Fine Gael outlined our tough but fair budget proposals that would get the econ-
omy back on track. Our proposals addressed the underlying weaknesses in the economy as well
as providing scope for positive things to be done for those most in need. For a start, jobseeker’s
allowance should have been increased by at least \9. The same arguments I made for pen-
sioners apply. The weak and vulnerable have been made scapegoats for Fianna Fail’s failure
to manage the public purse. The Minister, Deputy Hanafin, has attempted to disguise her cuts
for people on jobseeker’s allowance. Let us be perfectly clear that the changes proposed have
nothing to do with ending a dependency culture and everything to do with making cuts. It is a
reaction to a gaping hole in the public finances and it will savagely alter the lives of many
vulnerable people. The Minister hopes people will not sign on the live register because they
will fail the means test or do not have enough contributions as that would massage the figures
and keep the unemployment figures down. The question she has failed to ask herself, and that
she obviously failed to ask the Minister for Finance, is “what is the alternative for these
people?” Her heartless, cold, and clearly calculating approach, leaves these people with abso-
lutely zero — no income, no options, probably no home, no bed, nothing. It is not about ending
a dependency culture, it is about ending any real type of life for those people. It is offering
them a life on the street, or in shelters, effectively offering them nothing.
   We have seen no overall plan, just blanket cuts thinly disguised. Where is the plan for lone
parents that got the Minister front page headlines last summer? Where is her commitment to
supporting family, as she said herself, not just in the more disadvantaged areas, as has been
the case in the past, but the family generally? Her statement utterly contradicts what the Mini-
ster for Finance, Deputy Brian Lenihan, said yesterday. Either way, she has slashed families.
  What if a family relies on illness benefit? A \10 increase in the family income supplement
threshold would not be of any help to those people. What about the young person who has
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

left school because of a disability, perhaps because disability made school impossible, or
because they could not get the help they needed from the Department of Education and
Science? The Minister does not want that person depending on her. So she cut \200 per week
from them and instead gave their parents \300 per month. She need not worry because the
vulnerable know well they cannot depend on her. After yesterday, they know they cannot
depend on anybody on that side of the House.
  Where is the overall plan? No homework has been done on the Minister’s proposals yester-
day. That reminds me of the announcement on the over-70s medical card. No homework was
done, figures were wrong and now we are rowing back on it. Decentralisation was based on a
plan drawn up on the back of an envelope. Again, no homework was done. A total of 53
centres was announced. That programme was slashed yesterday. No homework was done on
the early child care supplement that was affected yesterday also. What alternative does the
Minister propose for those people?
  There are no specific plans to help the unemployed. We will obviously be told again about
the famous 50 facilitators who will do God knows what. The 50 facilitators were the subject of
two separate press releases last summer. In August each facilitator was to look after 3,600 lone-
parent families. By September, the same 50 people were also going to work on a one-to-one
basis — this was in a statement — with 235,000 unemployed people. The Minister, Deputy
Coughlan, suggested that each facilitator was going to work on a one-to-one basis with 8,000
people, which is impossible. This is the Minister’s plan for the unemployed, although she will
probably tell us that FAS will work on the problem as well. However, the numbers assigned
to it are insignificant compared to the scale of the problem. Instead, the criteria to qualify for
the back-to-education allowance should have been changed. Candidates aspiring to third level
education have to be on social welfare for one year. The Minister, Deputy Coughlan, claims
she wanted to tackle the problem of people on long-term unemployment becoming dependent
on benefit. However, when those people try to stand up for themselves and take the oppor-
tunity to go to third level, they are told they must first draw the dole for a year and only then
they may be allowed. This is creating a dependency culture and it is an utter contradiction of
what the Minister said. We should have specific measures to minimise time for these people so
they can get this payment.
  The Minister was asked a question on the mortgage interest supplement at a press conference
yesterday which she was not able to answer. Every one in the House will be dealing with this
problem again and again as people lose their jobs. Many people are unable to make their
mortgage repayments and there should have been an increase in the supplement to facilitate
such people. The Department of Finance must examine how the scheme is administered as
people are being refused credit on the basis that their mortgage is too high and for various
other reasons outlined last week. Such people must manage the mortgage they have. This is
the troubled position they are in and they need help.
  The early childhood supplement, announced in December 2005, was intended to help parents
meet the cost of child care in Ireland because it was so expensive. There was no homework
done and the Government was unaware of the implications of this measure. The fact that the
payment was linked to child benefit meant it was available for children not living in Ireland.
Now, every one has a cut of six months, but there will still be money leaving the country to
pay for child care in other countries where it is not as expensive. That money probably will not
be used for child care. This is another example of poor planning and governance which leads
to serious waste.
  The blanket 1% levy represents the most inadequate change of all in the budget. It hits every
worker in the country. It makes me laugh that the Government boasted, during budget debates
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

  [Deputy Olwyn Enright.]
in the past few years, about finally getting people on low incomes above the minimum wage.
What happened then? The Government side of the House stood up, clapped and gave a stand-
ing ovation to the Minister for Finance. Yesterday, the very same people were put back into
the tax net. What did those Deputies do? They all stood up, clapped and applauded again. This
is the mentality with which we must deal. Every worker in the country is now paying tax again
to pay for the mistakes and waste of the Government. It reminds me of the song, “The Wild
Rover”. The Government enjoyed the good times, spent all the money and is now asking
vulnerable people in the country to pay for its recklessness. The Government hopes the people
will believe that it will not blow it this time, but the people will not believe it.

  Deputy James Reilly: Well done. This must be one of the worst budgets in living memory.
Not only has the Minister, Deputy Lenihan, left the legacy of the Lenihan levy, but he will be
long remembered as the man who, along with the Minister for Health and Children, Deputy
Mary Harney, who took the medical card off sick, old, frail and terminally ill pensioners. The
stark fact is that 139,000 people qualified for the non-means tested medical card and if the
Government has its way, only 14,000 will remain eligible for the medical card in January. This
means some 125,000 people stand to lose their medical card. These people are elderly, suffer
from chronic illness and are on long-term medication. They have worked all their lives, served
the country and this is what the Celtic tiger hands them back.
  This comes at a time when the elderly have seen their pensions obliterated by the turmoil in
international markets, due, in some part, to the ineptitude of the Government’s management
of the economy over the past years. It also comes at a time when some 125,000 frail, elderly
people in the country who, through the Minister for Health and Children’s ineptitude, have no
help with long-term nursing home care. Home care packages have been slashed too.
   The Minister, Deputy Harney, promised in the Chamber in December 2007 to publish the
fair deal legislation before Christmas. She promised again in January that it would be published
before Easter. At Easter she promised it before summer, during the summer she promised us
it would be published this semester and now we are told it will be published tomorrow. When
will it come into law and when will people actually get relief?
  People are crucified paying \50,000 per year. Now, to rub salt into the wounds of those
families and elderly people, it is the Government’s intention to reduce the tax rate from the
marginal rate to the standard rate. Heretofore, if one was paying \50,000 per year, one received
\20,000 tax back, but now one will only receive \10,000. This is an extraordinary attack on the
elderly and makes a mockery of the Taoiseach and the Government’s contention that they will
protect the vulnerable, the frail and the elderly. We will see to what extent they will do this
when examining other aspects of the budget.
   The Taoiseach also told us earlier today that the fall in income tax allowance will not really
matter because every one will have the fair deal by next year. There are several issues with
this claim. Not every one will have access to the fair deal, because it will be capped according
to the budget plan. The allocation was set at \110 million last year and it has now been capped
at \55 million this year, which is half the original amount. Why is this and how many people
will be able to avail of it? The families unable to avail of it will find themselves penalised by
the Government from the tax aspects of the budget. Such people will find they are paying more
and more. There are several other aspects of the budget which are hitting families struggling
at present to mind their elderly, care for their young and disabled and to pay their mortgages.
   We are being asked to believe that the fair deal will be introduced next year by a Minister
who told us in January 2007 there would be no health cuts. The same Minister, Deputy Harney,
later admitted there would be health cuts but claimed these would not affect patients. We have
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

all seen what has happened. Operations have been cancelled throughout the country. The
situation in accident and emergency departments is such that there are 20% more people lying
on trolleys now than there was this month last year. This is despite the assertion that accident
and emergency departments were in crisis and they would be addressed.
   The HSE works under the Minister for Health and Children and takes its ethos from her
and from the Government. This is the ethos that allowed the HSE in the north east to do
nothing until May 2008 about thousands of mis-read X-rays that it knew of in September 2007.
There may have been ten or 20 of those people with tumours growing in their lungs since
September 2007. It waited eight months. If the mother or brother of the Acting Chairman was
such a patient, he would not wait eight months, but the HSE believes it is kosher to do so. This
is the same organisation that left 97 files belonging to women in Portlaoise dumped in a corner
until it deemed a cohort was reached and it could proceed to deal with people who might have
breast cancer. This is the same organisation which takes home care packages off disabled
children. This is the same organisation and Minister which takes home help hours off the
elderly and which presides over a system where people with cystic fibrosis die ten years earlier
in this country than 50 miles north of here.

  Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.

  Deputy James Reilly: Yesterday, at a press conference, the Minister for Health and Children
mentioned that people over the age of 70 visit the doctor four times a year, on average. I
cannot find any evidence to support this proposition. I do not know how the Minister, Deputy
Harney, gets her figures. My figures indicate that people over the age of 70 tend to visit the
doctor between ten and 12 times a year. Will the means test for the revised medical card
scheme be index linked? Will people continue to haemorrhage out of the scheme as they have
in past years? The scheme is not keeping pace with the cost of living. It is important to reiterate
that 139,000 people over the age of 70 currently have a medical card that is not means tested.
The Government’s proposal will reduce that number to 14,000. Some 125,000 people, or 90%
of the total, will lose their entitlement to a medical card. The Minister told us yesterday that
the average cost to the State of an over-70s medical card, when doctors’ fees and drugs etc.,
are taken into account, is \1,650. That is the cost of a whole year’s care and drugs. It is also
the cost of a single night in hospital. The Government is penny wise and pound foolish. This
cut is all the more savage because it is at the expense of the elderly.
  I read an article written by a young lady, Ms Orla Tinsey, in yesterday’s Irish Times. Ms
Tinsey believed the Minister for Health and Children when she said that isolation rooms would
be provided at St. Vincent’s Hospital and that a new cystic fibrosis unit would be brought into
operation. Ms Tinsey is in a ward with many other sick people, as a result of the Minister’s
breach of her promise, so she is open to all sorts of infection. I have mentioned previously that
the HSE takes home care packages from disabled children. I will not go back over that ground.
The Minister told us yesterday that pensioners will lose their medical cards from 1 January.
The HSE intends to write to 139,000 pensioners to invite them to send details of their income
to that organisation. I wonder when the excess managers in the HSE will receive letters inviting
them to avail of redundancy packages. There was no clarity on this issue yesterday because the
Government’s focus is on the soft option of hitting the elderly, rather than tackling the real
problem of the bungling bureaucracy known as the HSE.
  The office has been inundated today with calls from people in all parts of the country. I will
mention one case, that of a 72 year old former civil servant with pulmonary fibrosis who has
three years to live. He asked me to mention his name in this Chamber, but I will not do so.
He was crying as he told me he wants to enjoy the three years he has left. He is already paying
\200 a month for medication that is not covered by the medical card because it is experimental.
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

  [Deputy James Reilly.]
He will now have to pay an additional \100 a month for medication and a further sum for
doctors’ fees. Am I supposed to tell the man in question, who is at the end of his tether, that
he should be patriotic? This outrageous attack on the elderly will be remembered for a long
time. Despite the weasel words to the contrary that we have heard from the Minister, Deputy
Harney, and the Taoiseach, I do not doubt that this budget will go down in the annals as one
that hurt the most vulnerable people in our society.
   The more we examine this budget, the more examples of cynicism we see. Some \10 million
has been provided for mental health services. What happened to the \50 million that was
promised for such services in A Vision for Change? A further \10 million has been provided
for disability services. How far will that go? People with disabilities who are under the age of
18 will now be eligible for domiciliary care allowance, rather than disability allowance. How
more cynical can one be? Such people will get just \350 a month under the domiciliary care
allowance, whereas they were getting \200 a week under the disability allowance. The families
of disabled children will lose \450 a month as a result of this change. Some 125,000 pensioners
will now have to pay the health levy. An unexpected consequence of the introduction of the
medical card scheme was that such people did not have to pay the health levy, but they will
now have to do so. Given that we were told at the time that the cost of the scheme to the
Exchequer would be \200 million, how much will this measure cost the elderly now?
  The threshold for the drugs payment scheme is to be increased from \90 to \100. The 1.6
million people who are registered under the scheme will be affected by this measure. A new
\400 grant has been established as a sop to people over 70 years of age. This proposal mirrors
one of the failed policies of the neo-conservative Bush Administration. If people are given
inadequate resources, they will be forced to ration their health care services. It is despicable.
The \3.5 million that was allocated by the Minister in the 2007 budget for the development of
1,100 day care places was not spent for that purpose. Some \0.5 million has gone missing from
the fund. The same thing can be said of home help hours and home care packages. Some 250
paramedical and other allied professionals were supposed to have been recruited in 2007, but
that did not happen. The \2.5 million that was allocated for the meals on wheels service in
2006 was not spent on that service. It was used to provide other services to older people. Six
elder abuse officer posts remain vacant, despite the fact that money was allocated for them in
2006. It is obvious that the HSE is not serious about dealing with elder abuse.
  Some \20 million was assigned to fast-track 860 public long-stay nursing home beds, but just
188 beds have been provided under the scheme. The accident and emergency charge has
increased from \66 to \100. Private bed costs have increased by 20% in our public hospitals,
with a consequent impact on private health insurance. As many of this country’s amputees are
over the age of 70, they will be affected by the change in medical card eligibility. They will
now have to pay the full cost of their appliances. It will bring more hardship on those least
able to deal with it. Has the Minister considered the contractual issues? I refer to patients,
rather than to doctors. Many people over the age of 70 have medical cards which say “valid
until 2011”. They have planned their finances on the basis of having a medical card. There will
be legal issues in that regard. In its search for a quick fix, the Government has gone for the
poorly thought-out soft option. How can people get back into the VHI system? People who
have stopped their VHI payments will have to wait for five or ten years before they can make
a claim in respect of a previous illness. What good is that to a man in his mid-70s or 80s? It is
no use. Has the Government index linked the means test?
  It is clear that Fianna Fail has forgotten its slogan of some years ago, suggesting that health
cuts hurt the old, the sick and the poor. It is noteworthy that the only group to have welcomed
this budget is the Construction Industry Federation, led by the Minister for Health and Chil-
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

dren’s old buddy, Tom Parlon. Families will reflect on this budget as the full extent of the
Government’s ineptitude dawns slowly on them. College fees — let us call them what they are
— are back. Transport costs are increasing. Irish taxpayers are the only people in western
Europe who have to pay tax on tax. The Lenihan levy taxes one on one’s entire income, even
though one has already paid tax on it. It is actually a 3% tax on one’s tax, which is extraordi-
nary. We should not muddy the waters by referring to \400 payments — it is clear that 125,000
elderly people who will lose their medical cards.

  Deputy Mary Coughlan: It was the Deputy who caused all of this in the first place.

  Deputy James Reilly: I welcome the Tanaiste to the debate, even if she is late.

  Deputy Mary Coughlan: I was listening to the Deputy’s contribution.

  Deputy James Reilly: People will have to pay the 2% health levy, the 1% Lenihan levy,
doctors’ fees and medicine expenses of \100 a month, or \1,200 a year. They will have to pay
\100 each time they go to an accident and emergency department. They have lost their VHI
benefits. The nursing home tax break has been reduced from \20,000 to \10,000. They have to
pay for chiropody, occupational therapy and physical therapy. This is a Government that cares
all right.

 Deputy Mary Coughlan: I note that there has been no reduction in the salaries of the
Deputy’s colleagues.

 Deputy James Reilly: The facts speak for themselves. We are bailing out the banks, but the
Government is bailing on the elderly and their families.

  Deputy Mary Coughlan: That is sweet coming from the Deputy.

  An Leas-Cheann Comhairle: Go raibh maith agat. I call the Tanaiste. Does she intend to
share time with the Minister for Education and Science?

 Tanaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): I
am not sure.

  An Leas-Cheann Comhairle: The Minister, Deputy Batt O’Keeffe, is listed to speak for
15 minutes.

  Deputy Mary Coughlan: Okay.

  An Leas-Cheann Comhairle: Is that agreed? Agreed.

  Deputy Ruairı Quinn: At least she is being consistent.

  Deputy Mary Coughlan: Why is that?

  Deputy Ruairı Quinn: She is confused.

  Deputy Mary Coughlan: I am not confused.

  Deputy James Reilly: No, but the Government is confused. This is symptomatic of it.

  Deputy Mary Coughlan: The Deputy got his comeuppance this morning.

  An Leas-Cheann Comhairle: The Tanaiste, without interruption.
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

   Deputy Mary Coughlan: The events which we have witnessed over the past few weeks on
the international money markets have been characterised by a loss of confidence in financial
systems. The scale, depth and impact of this loss of confidence has been unprecedented in our
lifetime. Confronted with a challenge of such deep international proportions, the Government
was faced with making difficult choices in the budget announced yesterday by the Minister for
Finance. However, the choices made were necessary to restore confidence in our economy at
national and international level by bringing stability and certainty to the public finances. They
were also necessary to protect the most vulnerable in our society and to build a solid base to
ensure we are well positioned to benefit when the economic cycle turns around.
  In this budget, we have moved to send out a message that Ireland is still open for business,
in spite of the current difficulties that are shared worldwide. We have also refocused our
spending within the resources available to us to deliver increases in priority areas, including
social welfare, health and education.
   My Department and its agencies will play a key role in working through the current economic
circumstances and in making sure that we are well positioned to reap the opportunities that
will undoubtedly arise when the global situation improves. We will do this by continuing to
work to attract foreign direct investment, by helping Irish businesses to develop and grow their
exports, by continuing to prioritise investment in science, technology and innovation, and by
providing supports to small businesses. We will also continue to invest in upskilling the labour
force and ensure that adequate retraining and support services are available for those who
have recently lost their jobs.
  The allocation for my Department in the 2009 Estimates published yesterday amounts to
\1.951 billion. This includes \1.569 billion in Exchequer funding and just under \382 million
from the national training fund. Like my Government colleagues, I am prioritising spending in
a balanced and responsible way to ensure that the economy gets the best return for the level
of resources available.
   The strategy for science, technology and innovation was launched by the Government in
2006 as a long-term strategic initiative to underpin the future economic prosperity of this coun-
try. Capital funding for science, technology and innovation programmes in my Department’s
Estimate for 2009 will increase by \10.4 million, or 3.5%, compared with 2008. This will bring
capital investment in this area of my Department’s budget to \309.3 million, reflecting the
importance of this priority for the Government. This level of support sends a clear signal to
businesses based in Ireland that the Government is continuing to support their efforts to
develop new products, to stay competitive and to win new markets.
   The strategy for science, technology and innovation is still in its early days, but already we
have seen the fruits of our investment in this area. For example, some of the world’s leading
companies have chosen Ireland as a base for their research activities. This reflects the repu-
tation which Ireland has built as an emerging force in the area of research and development.
Forty-five research and development investments were supported by IDA Ireland in 2007, at
an overall value of \2.5 billion. Total research and development spending across all sectors of
the economy reached \2.33 billion in 2006. It would be short-sighted in the extreme to halt this
progress. Science and innovation are the future growth areas on a worldwide scale. The rewards
to industry for developing new and innovative products can be immense, with consequent
rewards for the economy in terms of employment opportunities and investment. Enterprise
Ireland and Science Foundation Ireland will continue to work with industry and academia to
promote research further and to ensure that the commercial value of new technology and
innovation is realised.
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

  The enhancements to the tax credit scheme for research and development announced by the
Minister for Finance yesterday are also a sign of the Government’s commitment in this area.
The research and development tax credit, which can be offset against a company’s corporation
tax liability, is being increased from 20% to 25% with effect from 1 January next year. This
measure will further enhance our competitiveness as a location for new internationally mobile
research-related investment and will also encourage existing overseas and indigenous firms to
increase their level of research activity.
  I also welcome the Minister’s announcement that the Commission on Taxation is to investi-
gate options for incentivising the holding and development of intellectual property. This is an
area that has become important globally in recent years and we need to ensure that our tax
regime reflects this.
   IDA Ireland has been very successful in highlighting the opportunities which Ireland offers
to leading edge multi-national companies down through the years. At present, there are over
1,000 IDA Ireland supported companies in Ireland, employing 136,000 people. Over 9,000 new
jobs were created by those companies in 2007, 114 new investments were delivered, involving
total future capital investment of over \2,3 billion, and IDA Ireland-supported companies
yielded \3 billion in corporation tax receipts and contributed \16 billion in direct expenditure
in the Irish economy.
  Ireland continues to be an attractive location for services, high-tech manufacturing and
research and innovation activities. IDA Ireland is now winning higher value foreign direct
investment in new and emerging areas such as Internet and media business. In the first half of
this year, IDA Ireland announced 22 investments with a capital value of \916 million and a
potential to create 1,600 jobs. This compares favourably with figures for 2007. An allocation of
\137 million, including staff and administrative costs, has been provided to IDA Ireland in my
Department’s Estimate for 2009. This will enable the agency to continue its work in attracting
companies to Ireland and to enhance its presence overseas. The Exchequer allocation will be
supplemented by IDA Ireland’s own resource income from grant refunds, deposit interest and
the rent and sale of properties.
  Enterprise Ireland will continue to support indigenous companies, with an allocation of \56.3
million from its grants to industry programme in 2009. The fundamental objective for
Enterprise Ireland in its 2008-10 strategy is to drive export growth in the challenging global
environment. Success in overseas markets will generate wealth that will sustain prosperity and
employment throughout all parts of this country. There is no doubt that Irish enterprises face
difficult challenges in the short to medium term.. However, this makes it all the more important
that Enterprise Ireland is in a position to provide all the assistance possible to companies to
bolster competitiveness, focus investment and generate innovative solutions. Enterprise
Ireland’s funding for grants to industry will remain virtually unchanged from 2008.
   It is also vitally important that we support small businesses at this time. Small and medium-
sized businesses account for over 97% of companies in Ireland and the sector employs in excess
of 800,000 people. Supports for small business, through the county and city enterprise boards,
will increase next year by almost \3 million, or 9%, to \34.8 million. The enterprise boards
have been particularly effective in their ability to respond to the needs of micro-enterprise at
local level. Over the past 15 years, they have assisted almost 20,000 projects and helped to
support the creation of 35,000 jobs. The increased 2009 allocation recognises the need for access
to practical business information and supports for small companies and the importance of
continuing to promote entrepreneurship at this time.
  The tax relief measures announced by the Minister for Finance for new start-up companies
will also help to grow small businesses and promote an entrepreneurial culture. Under the
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

  [Deputy Mary Coughlan.]
measures announced yesterday by the Minister, new start-up companies which begin trading
in 2009 will be exempt from tax, including capital gains tax, in each of their first three years to
the extent that their tax liability does not exceed \40,000. With the consolidation of our low
corporate tax base and capital allowances for certain energy-efficient equipment, this is a very
good budget for businesses of every size.
  In spite of the need to introduce a tough budget, the Government has taken care to protect
those who are most vulnerable in our society. In particular, we recognise the impact which
unemployment has on individuals, their families and their communities. Above all, we must
prevent the drift into long-term unemployment and avoid a return to the structural unemploy-
ment which we witnessed in the 1980s. It is important that we continue to invest in our people,
to upskill those in employment and to provide support services and retraining for those who
have lost their job.
  Total investment for labour market programmes in my Department’s Estimate for 2009 will
amount to \1.083 billion, or 56% of my total budget, including the national training fund
                                                                    ´               ´
contribution. Of this, \1.05 billion will be delivered through FAS. Within the FAS budget,
funding for community employment and job initiative schemes will be increased by 2%, from
\439 million to \450 million. This will enable FAS to continue to support a minimum of 22,500
participants on these programmes next year. Funding for FAS services to people with dis-
abilities is also being increased by 2% on the projected 2008 outturn. A total of \77.7 million
in its 2009 budget is ring-fenced for specific employment and training programmes for people
with disabilities. In addition, people with disabilities can avail of mainline FAS programmes
and services. The allocation from the National Training Fund for training the unemployed has
been increased by \9.5 million, or 5% in 2009, to \208.3 million. This allocation will help
workers who have recently lost their jobs, including redundant apprentices, through training
and re-skilling. Every effort will be made to help those apprentices who have been let go by
their employers to complete their training or to be retrained for alternative and emerging
   While labour market programmes have been refocused to assist the unemployed, funding
for upskilling those in employment in 2009 will still amount to \168.5 million and will be
delivered primarily by FAS and Skillnets. At workplace level, the National Employment Rights
Authority will continue to promote compliance with employment law and will carry out a
programme of inspections to ensure that workers’ rights are being upheld. The allocation to
the National Employment Rights Authority for 2009 is \9.7 million. The Health and Safety
Authority will promote, monitor and ensure compliance with workplace safety and has been
allocated a budget of \23.7 million for next year.
   In addition to the priorities I have outlined, my Department will continue to ensure that
markets operate in a fair and regulated way for companies and consumers. The international
events of recent weeks have demonstrated how important it is to regulate sectors and the
profound impact on an economy and on society if these are left unchecked. Within my Depart-
ment’s remit the Office of the Director of Corporate Enforcement will continue to address its
twin objectives of encouraging compliance with company law and bringing to account those
who breach their obligations. The Competition Authority and the Irish Auditing and Account-
ing Supervisory Authority will also continue their roles of promoting compliance with legis-
lation in the areas of competition law and the accountancy profession, respectively.
  Yesterday, I announced plans to merge the Competition Authority and the National Con-
sumer Agency. Competition and consumer policies are highly complementary and share a
common goal of enhancing consumer welfare. The merger of the Competition Authority and
the National Consumer Agency will ensure improved co-ordination of these two policy areas.
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

The Competition Authority and the National Consumer Agency, and its predecessor, the Office
of Consumer Affairs, have served the Irish public well for many years. They have protected
consumers, ensured fairer competition for businesses and worked with professionalism and
commitment in the interests of the public. However, a single body overseeing the areas of
competition and consumer protection will allow for a more consistent approach to policy imple-
mentation and resource allocation. The synergies resulting from bringing together the Compe-
tition Authority and the National Consumer Agency should improve services to the public and
should result in a better return for the investment currently being made in two separate bodies.
  The road ahead is still somewhat uncertain, given the worldwide scale of the current econ-
omic difficulties. However, with the prudent approach to spending announced yesterday, allied
to the measures announced by the Minister for Finance to stimulate productive investment,
the Government has demonstrated real leadership and has invested in building a confident
future for us all.

   Minister for Education and Science (Deputy Batt O’Keeffe): This budget comes at a critical
and defining time for our country. We all know that the international economic climate has
altered radically in relatively recent times. The scale of this challenge and the pace at which
circumstances have changed have combined to lift this budget out of the routine of economic
management to one of critical importance to the future well-being of our country. This is no
time for adjustments at the margins. This is a time for strong, firm and decisive leadership. It
is a time to put the interests of our country to the fore and sectoral interests firmly on the
back-burner. In framing this budget the Government has been very aware of the central role of
education to economic progress and social cohesion. This awareness is reflected in an increased
allocation for education.
  The gross allocation for the education Vote in 2009 is just over \9.6 billion, representing an
increase of \302 million and an overall increase of 3.2% on 2008. Education has received
unprecedented levels of support from the Government in terms of increases in overall funding
over the past ten years with education spending now more than treble what it was in 1997 when
overall funding was just \3.1 billion.
  The overall capital allocation for 2009 is being increased to \889 million. This represents an
increase of nearly 10% compared with 2008. The Government recognises the essential import-
ance of continuing to invest in our future productive capacity during the current economic
downturn. This increased allocation will provide for a very significant construction programme
and will see major projects under way across the country. This is in addition to the smaller
capital projects that will be offered for public tender under the devolved grant schemes. As
well as providing employment in the construction sector, it is my firm belief that increasing
competition within the sector will provide increased value for money, enabling us to derive
maximum benefit from this investment. In the tenders being received in the Department, we
have noted a drop of 15% to 20% in the prices being quoted.
   The 2009 capital allocation for schools will enable my Department to complete 26 major
projects and commence construction on another 62 major projects. It will permit completion
of 100 smaller projects on site and allow another 80 projects previously approved to progress
to completion. In addition, a further 2,600 primary and post-primary places will be delivered
in developing areas under the fast-track programme for September 2009.
  As I previously indicated, I will be making some provision for a summer works scheme for
2009. The summer works scheme has been extremely successful in enabling schools to address
long-standing infrastructural issues. Since the scheme was introduced in 2004, 3,000 projects,
costing \300 million have been completed. Work will also continue on my Department’s public
private partnership programme, with four post-primary schools due to commence construction
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

  [Deputy Batt O’Keeffe.]
before the end of 2008. When completed, these schools will provide 2,700 school places. Pro-
curement has commenced on the second bundle of six schools and work on identifying the
third and fourth bundles of schools is well under way. When compared with the level of activity
under the schools building programme in 1997, when only 42 large-scale primary and post-
primary school projects were under way with a capital allocation of just \92 million, it is clear
that the scale of delivery in 2008 is unprecedented and is an exceptional achievement. I am
very pleased I will be able to maintain a similar level of activity in 2009.

  Deputy David Stanton: It is not enough.

   Deputy Batt O’Keeffe: Turning to higher education, the capital allocation is being increased
by over \100 million to \265 million in 2009. This represents an increase of almost 50% com-
pared with the projected outturn for 2008. The 2009 capital allocation is one of the highest
annual levels of investment in core higher educational infrastructure over the past ten years
and represents an increase of just over 75% when compared with the funding of just \68 million
provided for universities and institutes of technology in 1997. The allocation will enable me to
continue the programme of investment in upgrading and modernising undergraduate facilities
at institutes of technology, universities and other colleges. In addition, it is intended that the
first bundle of third level PPP projects will be offered to the market this year, with the second
and third bundles following at six-monthly intervals.
   On the research side, the increased investment will allow continued progress in delivering
previously approved projects under the programme for research in third level institutions. The
year 2008 marks the tenth anniversary of the programme for research in third level institutions
with total investment under PRTLI to date of \865 million, including \648 million direct
Exchequer funding provided by the Government. I will also make an announcement in the
coming weeks in relation to PRTLI 5. I will be providing for a further round of funding under
the research facilities enhancement scheme for the improvement of research infrastructure.
This competitively awarded scheme has been very successful in providing targeted moneys for
restoring and updating equipment and facilities where strategic research is ongoing. In the
course of the next few weeks and months, I will announce details of specific new projects and
programmes that will be funded from this allocation in 2009. Overall, the increased capital
allocation for the higher education sector will provide better infrastructure for students, lec-
turers, researchers and others working in Ireland’s higher education sector.
   Given the scale of the economic circumstances facing the country, I do not for a moment
pretend the allocation for education, enhanced though it is, allows us to avoid tough decisions
and choices. The \8.5 billion current expenditure on education is predominantly on frontline
              services. It is the grossest dishonesty, as the Opposition has done, to peddle trite
3 o’clock     and simplistic notions that the scale of adjustment required in education can be
              met by painless and populist measures. Approximately 80% of the current allo-
cation goes on the salaries of front line teachers, SNAs, lecturers and others working across
the education sector. A further \500 million goes on school running costs. Other large elements
of the budget include areas such as provision for school transport. It is disingenuous to pretend
that necessary adjustments required in the national interest can be obtained without having
recourse to these areas.

  Deputy Brian Hayes: It is our fault.

   Deputy Batt O’Keeffe: The Opposition, where it is critical of individual policy choices, owes
it to the people to present real, tangible alternatives rather than vague, meaningless rhetoric.
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

  Deputy Ulick Burke: The Government is abdicating responsibility again.

  Deputy Batt O’Keeffe: There are no such tangible proposals in the Fine Gael press releases.

  Deputy Brian Hayes: The Minister has time to read our press releases.

  Deputy Ruairı Quinn: The Minister is in Government. He must take responsibility.

  Deputy Ulick Burke: He should take another look at the budget.

  Deputy Batt O’Keeffe: These are strong on criticism and utterly deficient in saying anything
that might offend anyone, anywhere. In the Fine Gael document Recovery Through Reform,
the reference to a 3% reduction in the budgets of Departments, including Education and
Science, is meaningless in the absence of specifics.

  Deputy Ulick Burke: The Minister gave few specifics yesterday.

 Deputy Batt O’Keeffe: It is significant that the Department’s salary bill constitutes less than
1% of the education spend.

  Deputy Brian Hayes: What about the \35 million spent dragging parents through the courts?

  Deputy Batt O’Keeffe: Were the Department to be abolished the Deputy’s party would still
have to find a further 2% savings and some mechanism for paying teachers, SNAs, managing
school transport and the building programmes in the absence of any people to do this.

  Deputy Ruairı Quinn: What is the scale of the Minister’s personal staff?

  Deputy Ulick Burke: No substitutes.

  An Leas-Cheann Comhairle: Please allow the Minister to speak.

  Deputy Ruairı Quinn: He started the row.

  Deputy Batt O’Keeffe: I assume this is not what Fine Gael envisages. However, if it is,
the party should say so. You, Deputy Hayes should issue another press release to confirm
your position.

  Deputy Brian Hayes: This is ridiculous. The Minister is obsessed with me.

  An Leas-Cheann Comhairle: The Minister should refer his comments through the Chair.

  Deputy Batt O’Keeffe: I apologise.

  Deputy Brian Hayes: He spends all his time reading our press releases.

  Deputy Batt O’Keeffe: On this occasion, when Deputy Hayes is outlining policy, I suggest
he put less emphasis on sound bites and more on substance. It is essential to place the current
measures in a proper context. In 2009, taking account of the measures announced today, the
net pay bill for teachers’ salaries and pensions will increase by almost \300 million as a result
of a combination of pay increases and the full year costs of the salaries of teachers appointed
this September. The allocation provides for increased enrolment in primary schools and the
continued growth in provision for special needs in primary and post-primary schools. In
addition, pay costs will rise by some \40 million to cover the full year costs of additional SNAs
in the system this September as well as provision for additional posts next September. Earlier
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

  [Deputy Batt O’Keeffe.]
this year, the Government specifically shielded teachers and SNAs from the general 3% payroll
cuts announced for the public sector.
   In making the hard choices required in the current circumstances, the Government has acted
in a balanced and measured way. To help limit the growth in public sector pay, it is necessary
to increase the number of pupils required for additional classroom appointments in both
primary and post-primary schools by one pupil with effect from September 2009.

  Deputy Ulick Burke: Another promise gone.

  Deputy Batt O’Keeffe: In the case of fee-paying post primary schools the number of pupils
required will increase by two. This change to the pupil teacher ratio will increase average
class sizes.

  Deputy Ruairı Quinn: Where is that in the programme for Government?

  Deputy Kieran O’Donnell: They are changing the programme for Government.

  Deputy Batt O’Keeffe: It is also necessary to reintroduce a cap of two on the number of
language support teachers per school. However, in response to Deputy Hayes’s speech, support
will be provided to help reduce the impact of the cap on those schools with very large numbers
of pupils requiring language support.

  Deputy Ulick Burke: So his speech had an impact. What number?

   Deputy Batt O’Keeffe: With effect from 1 January 2009, substitution cover for uncertified
sick leave in all schools and for official school business in post-primary schools is being sus-
pended. I am asking schools to consider carefully the necessity for absences at events outside
school which take place during core class contact time.

  Deputy Brian Hayes: No more football. Sport is gone.

  Deputy Batt O’Keeffe: Substitution cover will still be paid for all other categories of teacher
absence currently provided for and the 37 hour scheme of payment to teachers for supervision
and substitution will continue.

  Deputy Ulick Burke: We will give it on Christmas Eve again.

  Deputy Batt O’Keeffe: There will be rationalisation of in-career development courses for
teachers in 2009. However, we will continue to provide a wide range of courses to teachers in
key areas including special education and language support.

  Deputy Ruairı Quinn: When will we, and they, have those details?

  Deputy Batt O’Keeffe: On school funding, improvements are being made to the rates of
capitation funding available to schools with a total value of \20 million. I cited here to the
Opposition spokesperson on education that it was my desire to increase the levels. Despite the
stringent financial circumstances, at primary level the standard rate of capitation grant has
increased from \57.14 per pupil in 1997 to \178.58 in 2008.

  Deputy Ruairı Quinn: That is a meaningless statistic without the percentage. There is no
relative percentage figure in the Minister’s speech.
            Financial Resolution No. 15:   15 October 2008.      (General) Resumed

  Deputy Batt O’Keeffe: The ancillary services grant has also substantially increased from
\38.09 per pupil in 1997 to \151.50 in 2008.

  Deputy Ruairı Quinn: It is still 50% of the operating costs.

  Deputy Batt O’Keeffe: The increases in capitation and ancillary grants I have announced
will see day-to-day funding for primary schools increase by nearly \25 to \355 per pupil.

  Deputy Brian Hayes: They will be singing in the streets with that one.

  Deputy Batt O’Keeffe: At post-primary level, capitation will increase by \14 per pupil to
\345, an increase of 4.3% over 2008.

  Deputy Ulick Burke: Will the Minister pay for the water bills?

  Deputy Brian Hayes: Exactly.

  Deputy Batt O’Keeffe: I have also made provision for an increase of \8 per pupil in equalis-
ation funding provided to voluntary secondary schools. A number of specialist grants have been
abolished with the general capitation increases aimed at giving schools maximum flexibility in
how they use their grant allocation.

  Deputy Ruairı Quinn: Where can we get details of this?

  Deputy Ulick Burke: This is a new spin.

  Deputy Batt O’Keeffe: I have also decided to regularise an anomalous situation whereby
fee-charging schools under Catholic patronage were not in receipt of certain grants, including
the support services grant, that were paid to other fee-charging schools. This measure will see
all fee-charging schools treated on the same basis regardless of religious denomination.
  The education of students with special educational needs continues to be a key investment
priority for Government. This is reflected in the fact that there are now more than 19,000
teaching staff and SNAs working in our schools. The full implementation of the Education for
Persons with Special Educational Needs Act by the target date of October 2010 is being
deferred. Services will continue to be provided by my Department on a non-statutory basis.

  Deputy David Stanton: Will the Minister give way for a question please?

  Deputy Ruairı Quinn: He will not even answer a fellow Cork-man. Things are really tough.

  An Leas-Cheann Comhairle: It is not within Standing Orders for a Minister to concede
during the last two minutes of his or her time.

 Deputy David Stanton: On a point of order, can the Leas-Cheann Comhairle give me a
written copy of that Standing Order please?

  An Leas-Cheann Comhairle: The book of Standing Orders was circulated to all Deputies.

  Deputy Mary Coughlan: We received it on the first day we came in here. We all got a
big pack.

  Deputy Batt O’Keeffe: The Government is committed——

  Deputy Ruairı Quinn: This Government should be committed.
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

  Deputy Batt O’Keeffe: ——to providing targeted support for special needs and has allocated
additional funding of \20 million for 2009 to continue to enhance front line services for these
children. Some \10 million is being provided for my Department and this will complement the
additional level of supports to be delivered through the allocation of \10 million to the health
service. The additional allocation in my Estimate has enabled me to provide a 33% increase
for the Department’s psychological service. This will mean more psychologists working directly
with children in our schools.

  Deputy Ulick Burke: We have heard that before.

  Deputy Batt O’Keeffe: The psychologists will also support school staff in catering for children
with special needs in the school setting. Funding will also be provided to the National Council
for Special Education to enhance its capacity to co-ordinate the provision of services at local
level for children, parents and schools.
  We envisage putting in place an additional 50 psychologists so that this year there will be a
psychologist available in every area of the country. Up to now, coverage was at 60%——

  Deputy Ulick Burke: The waiting lists will be gone.

  Deputy Batt O’Keeffe: At the end of the this budget, we will be in a position to cover 100%
of the country.

  Deputy Brian Hayes: How many extra psychologists is the Department appointing?

  Deputy David Stanton: Is the Minister talking about the end of this year or of 2009?

  Deputy Batt O’Keeffe: Am I all right for time?

  An Leas-Cheann Comhairle: You have approximately 10 seconds remaining.

  Deputy Brian Hayes: The Leas-Cheann Comhairle should give the Minister more time.

  Deputy Batt O’Keeffe: I have already outlined the increased capital allocation for the higher
education sector.

  Deputy Ruairı Quinn: He needs a lot of injury time. He is doing a lot of damage.

  Deputy Batt O’Keeffe: The Estimates provision for higher education is \1,844 million as
compared to \1,887 in 2008. The Estimate allows for an increase in the student registration
charge from its current rate of \900 to \1,500 in individual institutions for the academic year
2009-10 and combined, this funding is generally in line with the projected outturn in 2008.

  Deputy David Stanton: That is going to hurt.

  Deputy Batt O’Keeffe: Given the current economic climate, it was not possible to provide
an increase in current funding for the sector in 2008. However, the current level of funding
must be seen in the context of the substantial increases in funding for the third level sector in
recent years, whereby the overall provision to the sector, including capital provision, has
increased to some \2 billion in 2008. This is an increase of 33% in the last four years and an
increase of 135% since 1997.

  Deputy Charles Flanagan: I wish to share time with my colleague, Deputy Kieran O’Donnell
and to refer, in the time afforded to me, to matters in the justice area. The importance this
Government attaches to justice and crime matters was reflected in the Minister for Finance’s
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

speech yesterday. Not once, in a speech which ran to almost 8,000 words, did he refer to the
justice budget. This was very surprising given that he recently served as Minister for Justice,
Equality and Law Reform and a startling omission given the way crime is thriving in this
country and having regard to the grave concerns that families and decent people have about
matters of crime and justice.
   The Minister for Justice, Equality and Law Reform, Deputy Dermot Ahern, has taken the
axe to Garda overtime. He has done so in the knowledge that incidents involving bombs and
other explosive devices are up over 300% on last year. This year alone we have had 76 incidents
involving pipe bombs and other dangerous devices. He has done so in the knowledge that the
drugs trade continues to boom. The streets are awash with heroin and cocaine. If the rule of
thumb that the Garda successfully intercepts 10% of the drugs that enter the State applies, we
are in serious trouble. So far this year, the Garda has seized drugs worth \68 million. The
sinister involvement of organisations such as the INLA in the drugs trade should sound a loud
warning bell to the State. Organised criminals and criminal gangs cannot be given a free pass,
irrespective of the downturn in the economic situation.
   Gangland bosses and their associates are uncorking the champagne bottles and toasting the
Minister for Justice, Equality and Law Reform for the Garda overtime cuts that we are now
facing. The Minister has chosen to cut overtime despite the obvious need for greater resources
to rein in gangland criminals. This is obvious not only from the availability of drugs but also
by an analysis of the steep rise in the number of shootings taking place year on year. The
number of shootings jumped by 54% between 2003 and 2007, from 211 incidents to 325. In the
first six months of 2008 there were 116 reported shootings. Estimates suggest there were 19
gangland-related killings in 2005, 21 in 2006,16 in 2007 and 15 so far in 2008. Meanwhile, knife
crime has jumped over 300% in four years.
   In this morning’s newspapers it was reported that the Dublin County Coroner opened
inquests into no less than eight violent gun deaths yesterday. Among the eight victims was
apprentice plumber Anthony Campbell, an innocent bystander shot dead in a botched gangland
attack. Anthony Campbell was in the wrong place at the wrong time and paid the price with
his life. How many more gruesome murders must take place before crime becomes relevant
enough for a mention by the Minister for Finance, Deputy Lenihan, in his budget speech?
  The Minister for Justice, Equality and Law Reform will argue that he has off-set taking a
hatchet to the Garda overtime budget by providing more gardaı. Another way to express that
argument is that he has given with one hand and taken back with the other. This country needs
additional resources to combat crime. Organised crime costs this State a fortune every year in
terms of deaths, drugs and prison sentences. Failing to tackle criminals by providing necessary
resources is not a money-saving measure, irrespective of how the Government tries to spin it.
  Ring fencing money for Operation Anvil is a welcome and sensible step, but it is not enough.
Operation Anvil alone cannot address the criminality of gangland bosses. Maintaining and
protecting resources for one single Garda operation is a flimsy response to the challenges that
organised crime pose to this State.
   Another area where the Minister is claiming he is saving money is in the prison sector. This
is another false promise because reducing budgets as a short-term measure will cost us dearly
in the long run. Let us look for a moment at the current situation in our prisons. The latest
figures show that 50% of prisoners re-offend within four years of their release while 27% find
themselves back behind bars within a year. The taxpayers of Ireland are spending \91,000 per
prisoner per annum to maintain a revolving door prison system.
  The Council of Europe anti-torture committee is one of a number of august bodies to express
horror at the state of Ireland’s prisons. Its most recent report on Irish prisons, published in
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

  [Deputy Charles Flanagan.]
October 2007, described a scenario where inter-prisoner violence was rife, fuelled by the wide-
spread availability of illegal drugs and the existence of a gang culture within the prison system.
Three prisons were singled out as being particularly dangerous in this context, namely,
Limerick, Mountjoy and St. Patrick’s Institution.
  A report in this morning’s newspapers detailed a violent attack in the State’s most secure
prison at Portlaoise. The prison governor was subjected to a series of threats and intimidation,
culminating in a physical assault. In May this year it was reported that in Limerick Prison the
number of prisoners who have had to be put into isolation for their own safety has trebled
over the past two years. We hear about the lack of prison security on a weekly basis. This
summer we heard it reported on the court record that a gangland boss continued to engage in
his criminal empire building from behind prison bars.
   The agreed programme for Government promises to “invest significantly in rehabilitation
for prisoners”. This is a promise that must be delivered on urgently. Last year 10,000 drugs
tests were carried out in Irish prisons, 40% of which were positive. A total of 75% of prisoners
in Mountjoy tested positive for drugs. There is widespread agreement that the situation in
Mountjoy Prison, in terms of drug use, violence and violations of human rights, is totally unsus-
tainable. Is the situation to be allowed to fester for the next 12 months and perhaps to worsen
as a consequence of budget cuts?
  Despite the lofty promises contained in the programme for Government, the Minister for
Justice, Equality and Law Reform, Deputy Dermot Ahern, has already revealed his contempt
for rehabilitation services. Before the budget was even agreed he slashed support services for
ex-offenders, placing vulnerable men at risk of homelessness and addiction problems. He has
withdrawn funding from Harristown House, a counselling and addiction centre at Castlerea,
County Roscommon and from the Kazelain project in Sligo which provides accommodation
for former offenders and homeless men. The grim consequences of these moves have been
predicted by the experts and we are likely to pay the real price in the near future.
  Cuts have been made to the prison sector at a time when health experts have called for the
reform and expansion of prison psychiatric services following revelations that more than one
in ten new male inmates has a psychiatric disorder and one in 20 is in need of transfer to a
psychiatric institution.
   The Minister may think that what happens within prisons is not a cause for concern to most
people. However, it is hard working people and families who are always the victims of crime.
It is hard-pressed taxpayers who are footing the bill for the dysfunctional Prison Service that
the Minister presides over and I want to know what he proposes to do about it in 2009.
  What is the fate of the Thornton Hall prison project, which has already cost the taxpayer
almost \37 million? Thornton Hall is a perfect example of how wilful waste makes woeful
want. The report of the Comptroller and Auditor General concluded that the State paid “at
least twice” the market value for the land when it stumped up \29.9 million to acquire the site.
  Prison capital took a 10% cut in 2008, and received no increase in capital for 2009. The
Minister of State, Deputy Moloney, recently stated there was no Plan B regarding Thornton
Hall. I would like to know what is the status of Plan A. It is important to note that spending
on existing prisons fell on the basis that Thornton Hall was proceeding. In the 2008 Estimates,
the buildings and equipment budget was reduced by 44%.
  The Minister for Justice, Equality and Law Reform, Deputy Dermot Ahern, recently
announced to great fanfare that he was rolling out the joint policing committees and expanding
the programme from 29 to 114 committees throughout the State. Last year, \1 million was
provided for the 29 committees. Is there provision for a pro rata increase to fund the additional
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

85 committees? I would like to hear the Minister’s views on this when he addresses the
matter later.
   What about the Garda station building programme? What about the resources for com-
munity policing which is supposed to be a hallmark of Government policy in terms of increasing
the visibility of the Garda force on the streets? This budget has shown us that tackling crime
is far down the list of priorities for the Government.
  The Minister for Justice, Equality and Law Reform, Deputy Dermot Ahern, a master of
spin, has attempted to twist the facts to disguise the short-sightedness and mean-spiritedness
of his cuts. He has reduced Garda overtime just days after a key survey revealed that people
are crying out for greater Garda visibility, with 75% of those surveyed wanting to see an
improved Garda service by having more gardaı visible on the streets.
  The Minister has cut funding to the Prison Service thereby perpetuating the cycle of crime.
He has even cut the budget for the Irish Human Rights Commission, a body established under
the Good Friday Agreement. I am sure he will outline in greater detail the particulars for
the proposed merger of two bodies and the consequent dilution of power and influence of
them both.
  The consequences of these cuts will be shown in the fullness of time. I am confident the
people will not be fooled. Despite the spin, they have seen this budget for what it is, an attack
on decent hard-pressed people and they will see through the spin coming from the Department
for Justice, Equality and Law Reform, which is the same as that which we saw from the Minister
for Education and Science earlier in the debate. The chickens have come home to roost. The
Galway tent school of economics provided us with yesterday’s budget which showed the
Government has blown the boom in a most extraordinary fashion and the people have been
given the bill to pay the price.

  Deputy Kieran O’Donnell: This budget is probably the worst and most severe budget for the
vulnerable, the lower paid and those on a middle income since I can remember. This budget
will hit lower and middle income families and more particularly the old and the infirm.
  What is proposed with regard to medical cards for the over 70s is that more than 125,000 of
the 139,000 in receipt of medical cards, or 90%, will lose their medical cards. This has impli-
cations not only for medical expenses, it also has implications for accident and emergency
charges and long-stay beds. It also has an income tax implication with regard to health contri-
butions. The Government has not made this public but any person earning more than \26,000
a year without being in receipt of a medical card will pay a 2% health contribution. This means
not only are they caught for the 1% levy on occupational pensions but they are caught for
another 2%. This is a 3% Lenihan super-levy on old people.
  People who telephoned Joe Duffy’s “Liveline” programme today are worried about their
elderly parents and the fact they left the VHI because in early 2000 Fianna Fail gave medical
cards to those aged over 70. If they can even get back into the VHI they face a ten year waiting
time for the conditions they had prior to leaving the VHI. They must wait two years before
any new conditions will be covered.
   Is this fair for a return of \100 million? At present, the Government is guaranteeing the
banks to the tune of \500 billion. I expect the Government to obtain more than \100 million.
It will see \100 million in savings in terms of medical cards but it will also receive money from
the 2% levy from many of these people. Shame on the Government. I expect the Fianna Fail        ´
backbenchers to come out in support of this measure. It must be reversed. The Minister of
State, Deputy Kelleher, knows it and I have no doubt constituents have contacted him.
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

  [Deputy Kieran O’Donnell.]

  Everyone here has elderly parents. When this was introduced people planned for life on the
basis of it. They are now facing bills of \1,200 for the drugs refund scheme and paying fees to
doctors and hospital charges. A constituent who rang me expects it to cost \2,500 extra per
year which the person can ill-afford. These people have paid their dues to society. The Govern-
ment proposes to introduce a measure which is unfair, crude and defies logic. I expect the
Government to reverse the decision. A typical retired person on a \30,000 occupational pension
will pay almost \1,000 extra in tax to the Government. He or she does not even know how the
Government will use the money because to date it has wasted money and not used it wisely.
   The Government states it will save \150 million in terms of nursing home charges and normal
medical expenses. Every family with an elderly parent in a nursing home receives tax relief on
it, many of them at the higher rate. Typically, it costs approximately \50,000 to keep a person
in a nursing home. People will lose \10,000 on this.
  Going through all the measures, this budget is absolutely crippling for the elderly with the
1% levy, the 2% super-levy on health contributions, the tax on savings through DIRT increased
by 3%, VAT increased by 0.5%, accident and emergency charges increased by 50%, the cost
of drugs increased by 11% and they must also pay doctors fees. The old age pension has
increased by just over 3%, less than the rate of inflation. The Government talks about being a
caring government and looking after the elderly. The budget reverses this.
  Last night, the Taoiseach stated the income levy was a fair measure. Over successive budgets,
Fianna Fail boasted that it brought countless thousands of people out of the tax net. In last
year’s budget it was stated that 878,000 were not in the tax net. This does not apply any more.
Everyone is paying tax. The Government has gone for the soft option. Lone parents will not
be taxed on social welfare benefit but will be hit by the 1% income levy if they get a job. The
Minister of State at the Department for Enterprise, Trade and Employment, Deputy Billy
Kelleher, knows small business employers will have to compensate their employees for the
levy. It will mean uncompetitiveness and job losses. The budget contains no provisions to arrest
the rate of unemployment. The budget’s measures will make it worse by adding 1% to the
inflation rate and sapping money out of the economy. It will sink us further into recession and
eventually a depression.
  Fine Gael, on the other hand, proposed no increases in taxes but increases in social welfare
to keep pace, and even go above, the rate of inflation. We proposed proper public sector
reform, an issue with which Fianna Fail is incapable of grasping and dealing. The Government
ratcheted up public sector expenditure in the past ten years by 150%. Therein lies the issue
that needs to be tackled. Instead, the Government, seeking \2 billion, will make it up with
the Lenihan levy, some \1 billion, and a raft of other measures which hit low and middle-
income families.
   The payment of corporation tax has been pulled back by five months to balance the books.
Businesses are already under severe pressure with cashflows, yet the big arm of the Govern-
ment puts more pressure on them with this measure. I am very sure the Government will not
be giving businesses much latitude in the payment. Instead of paying it in November, companies
will be expected to pay half of it in June. This is to cover up the Government’s mistakes and
lack of proper reforms.
  There have been increases across all taxation areas — income tax, motor tax, capital gains
tax and excise duties. Last night, people in Limerick were queuing to fill up their car tanks
because of the increase in the price of petrol. People are under enough pressure. Limerick has
seen a 53% increase in its live register. The budget has proposed nothing to correct this through
proper re-training.
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

  A \10 levy has been introduced on flights out of Shannon Airport.

  Deputy Michael P. Kitt: It also affects Knock Airport and others.

  Deputy Kieran O’Donnell: Many of the flights out of Dublin Airport will only be taxed by
\2. The only route on which the \10 tax will not apply to Shannon is the Dublin one. The
Government bailed out of the Aer Lingus Shannon-Heathrow route and soon no Aer Lingus
cabin crew will be based at the airport. A punitive \10 charge is being imposed on every
passenger leaving Shannon Airport. This must be reversed. I put that to the Minister for
Defence, Deputy Willie O’Dea, the only Minister in the mid-west. He informed me the Minister
for Finance would consider it until March. However, I want the decision reversed with immedi-
ate effect.
  The Budget Statement did not refer to urban regeneration projects for Limerick city when
they got great mention last year. The Minister of State with responsibility for housing, Deputy
Finneran, is present and we need a commitment on this matter. The people of Limerick were
promised regeneration would be delivered . It must be honoured by the Government. We were
informed the Minister for the Environment, Heritage and Local Government, Deputy
Gormley, will reaffirm the Government’s commitment to the project and outline details on the
level of funding and when it will be forthcoming. The project is vital to the revitalisation of
Limerick and those living in the proposed regeneration areas. If it is not delivered, it will be a
disaster for Limerick and the region. I look forward to hearing what the Minister, Deputy
Gormley, has to say about regeneration.
   The Government is forever asking what Fine Gael would have done in this budget. We have
produced not one, but two policy documents, Recovery Through Reform, published last July,
and our budget details last week. We said we would not raise taxes. The Government has done
the opposite. We said we would conduct proper public sector reform and cut \1.8 billion from
current expenditure. The measures would be very straightforward. There would be a cut in
public sector pay for those earning over \50,000 and a ban on all recruitment, apart from
frontline services. We wanted reform of the drugs scheme to be based on generic drugs. We
wanted \1.5 billion to be sought from the banks for the State guarantee scheme. The budget
contained no mention of what charges will be imposed on the banks for the guarantees, yet it
is based on taxpayers’ money.
  The Government is cutting back on the national development plan. Fine Gael proposed to
take \1 billion from the National Pensions Reserve Fund to keep the national development
plan on course. We proposed a carbon levy on electricity generators to raise \300 million. At
least the Government took on board our proposal on capping pension relief, which we
  We proposed putting aside \150 million for benefits for the vulnerable. However, mortgage
interest relief is being reduced for people not in their first homes from 20% to 15%. I note no
measures to assist people in trouble with mortgage repayments. Fine Gael proposed to set
aside \15 million to help people through community welfare officers and MABS to get relief
with mortgage repayments. The Government increased the winter fuel allowance by 28% but
we believed it should go up by 50% and proposed to set aside \65 million for it as heating fuel
costs have risen by 78%.
   There is nothing in the budget to deal with the unemployed. Currently, one must be 12
months unemployed and in receipt of jobseeker’s allowance to qualify for the back to education
allowance. We proposed that this time constraint be done away with for those in receipt of the
benefit and the lower paid earning less than \12 per hour. Fine Gael’s measures are practical,
could stimulate the economy, would not raise taxes or suck the lifeblood out of the economy.
                 Adjournment             15 October 2008.          Debate Matters

  [Deputy Kieran O’Donnell.]

  Fine Gael also dealt with two matters the Government has avoided — the fee for the banks
for the State guarantee scheme and proper public sector reform. The Government, however,
has fudged and not made the hard decisions on these issues.
   I note the Minister for the Environment, Heritage and Local Government, Deputy John
Gormley, is present. I want him to give me a commitment that he will reverse the decision on
medical cards for the over 70s. I presume he is aware that not only will the over 70s end up
paying the 1% levy but, if they are receiving more than \26,000 a year through an occupational
pension, once their medical card goes, they will be paying another 2% in health contributions.
This means they will be paying a superlevy of 3%. Not only is the Minister hitting them through
an increase in the drug refund scheme and extra accident and emergency costs, but he is also
fleecing them through income tax. A person on an occupational pension of \30,000 will now
be hit with nearly \1,000 extra per year in tax, apart from medical expenses. That decision
must be reversed. If the Government does not do so, it will show how little it values people
who have devoted their lives to building this economy. How does the Minister value such
people? This matter is critical in terms of how the Dail is viewed by the public. Does the
Minister care?

  Deputy Fergus O’Dowd: He could not care less.

  Deputy Kieran O’Donnell: Does he care for people aged over 70 who are speaking on the
Joe Duffy show and are telephoning us? I have no doubt they are also ringing the Minister.
The measure will save a measly \100 million, while the banks have been given a guarantee of
\500 billion. This is not on and must be reversed. The Minister should deal with this matter in
his reply. When this measure was first introduced in 2001, many elderly people relinquished
their VHI cover and may now find it difficult to get cover with the VHI or other health service
providers. Even if they do, they will have to wait ten years before reaching the conditions they
had before giving up their insurance. The decision must be reversed because it is nothing short
of disgraceful.

  Debate adjourned.

                                Adjournment Debate Matters.
   An Leas-Cheann Comhairle: I wish to advise the House of the following matters in respect
of which notice has been given under Standing Order 21 and the name of the Member in each
case: (1) Deputy John O’Mahony — the withdrawal of the visiting teacher in respect of children
in County Mayo who are visually impaired; (2) Deputy Deirdre Clune — the provision of
school accommodation in respect of children in Ballygarvan, County Cork; (3) Deputy Frank
Feighan — the closure of Harristown House addiction and counselling centre, Castlerea,
County Roscommon; (4) Deputy Michael McGrath — the provision of a dedicated cystic
fibrosis unit at Cork University Hospital; (5) Deputies Brian Hayes and Charlie O’Connor —
the provision of sports centres at Firhouse, Killinarden, Collinstown and Palmerstown com-
munity colleges, County Dublin; (6) Deputy James Bannon — the need for the Minister for
Education and Science to provide an update on the commencement date for the new school
building at Forgney national school, County Longford, which is urgently required to replace
the 40-year-old prefab structure and which was approved two years ago in November 2006, in
an announcement of a new building programme by the then Minister for Education, under
which 72 primary schools nationwide were allocated funding; (7) Deputy Fergus O’Dowd — I
wish to raise a matter of urgent national importance, namely, the need for the Government to
give greater financial assistance and advice and support to mortgage holders who fall into
            Financial Resolution No. 15:          15 October 2008.       (General) Resumed

arrears as a result of loss of employment or serious illness; and to examine in particular the
very aggressive practices which some sub-prime lenders, such as Start Mortgages, use to deal
with such mortgage holders; and (8) Deputy Michael Creed — delays in An Bord Pleanala and
the consequential impact of these delays on employment.
  The matters raised by Deputies Michael McGrath, John O’Mahony, Deirdre Clune, and
Brian Hayes and Charlie O’Connor have been selected for discussion.

                                           Financial Resolutions 2009.


                         Financial Resolution No. 15: (General) Resumed.

  Debate resumed on the following motion:
    THAT it is expedient to amend the law relating to inland revenue (including value-added
  tax and excise) and to make further provision in connection with finance.
                                                                        —(The Taoiseach).
 Minister for the Environment, Heritage and Local Government (Deputy John Gormley): I
welcome the opportunity of contributing to this debate on the budget both as Leader of the
Green Party and as Minister for the Environment, Heritage and Local Government.

  Deputy Kieran O’Donnell: The Minister should deal with the issue of medical cards for the
over 70s.

  An Leas-Cheann Comhairle: Please allow the Minister to at least begin his speech.

  Deputy John Gormley: This has been an exceptionally challenging budget framed against
difficult international economic circumstances. We are duty bound to take action to put the
public finances on a sound footing in the interests of all the citizens of the country.

  Deputy Kieran O’Donnell: Not for everybody.

  Deputy John Gormley: In doing this, the Government has not taken a short-term view——

  Deputy Kieran O’Donnell: Very short term.

  Deputy John Gormley: ——but has looked to ensuring economic and environmental sus-
tainability, to promoting the competitiveness of the economy so that it will be able to respond
quickly when the global situation improves, and above all to protecting the most vulnerable in
our society.

  Deputy Damien English: With respect, the Minister is doing the opposite.

  An Leas-Cheann Comhairle: Please allow the Minister to speak without interruption.

  Deputy John Gormley: All of these principles are clearly seen in the estimates for my own
Department. We have forensically examined all expenditure. We have had to make difficult
decisions, but I believe we made the right ones.

  Deputy Kieran O’Donnell: How does the Minister define “forensically”?

  Deputy John Gormley: For example, we have concentrated housing expenditure on social
housing and protecting the most vulnerable. We are investing in environmental protection
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

  [Deputy John Gormley.]
concerning water, waste management and the natural and built heritage. In addition, we have
increased investment in the water services investment programme by a massive 19% in the
interests of protecting public health, compliance with EU environment standards and support-
ing economic development. I will return to these issues in greater detail later.
   Today, I am presenting the second annual carbon budget. When I introduced the concept
last year, I explained the thinking that led to its inclusion in the Agreed Programme for Govern-
ment. If climate change is to be central to Government policy-making, it must be integrated
into the annual budgetary process. Our decisions on expenditure and taxation must be informed
as much by the climate impact as by the financial and economic impacts.
   Given the unprecedented financial backdrop to this year’s budget, many might have expected
climate considerations to receive little, if any, attention. That would have been a huge mistake.
As Minister for the Environment, Heritage and Local Government and Leader of the Green
Party, I have spoken in the House on many occasions about the environmental cost of our
greenhouse gas emissions. In the context of today’s debate, however, the focus must also be
on their financial and economic cost. If we do not reduce our emissions, the long-term costs to
the Exchequer and to the economy will be immense.
   While the international negotiations on a post-Kyoto agreement have not yet concluded, we
already know that Ireland will be required to reduce its emissions by 2020 to a level at least
20% below that of 2005, and probably by considerably more. As we stretch the time horizon
towards 2050, the scientific consensus is that the cuts required of developed countries could be
as much as 80% to 95%, if the worst effects of global warming are to be avoided.
   These cuts will not be optional. They will be binding on Ireland under future EU and UN
agreements and we will face hefty financial sanctions if we fail to meet them. We must, there-
fore, prepare the ground now for a major structural change in our economy and our society,
so we can continue to develop and prosper while simultaneously reducing our greenhouse gas
emissions. The Government has accepted this reality and has agreed a budget that is designed
not just to restore financial stability, but also to move us further towards the necessary tran-
sition to a low-carbon economy.
  I have circulated a short table which sets out the trend in Ireland’s emissions, including the
projections for the Kyoto period. The table includes provisional estimates of 2007 emissions,
which have just been completed by the Environmental Protection Agency. The agency has
done excellent work in completing its calculations two months earlier than planned. There was
speculation in some media a few weeks ago that our emissions would be substantially up on
the previous year, but that is not the case. The table shows a welcome fall of just over 1% in
net emissions, taking account of increased sequestration though afforestation. Net emissions
have fallen from 68.6 million tonnes of carbon dioxide equivalent in 2006 to 67.9 million tonnes
in 2007. While the reduction in 2007 is welcome, it offers cold comfort in the context of the
baseline trend for the Kyoto period. Over the past year, the Government has committed signifi-
cant resources to improving the capacity to model and project emissions across the various
sectors. This has enabled the EPA, with the support of relevant agencies in the various sectors,
comprehensively to update projections for the Kyoto period, which were included in the
national climate change strategy.
  This analysis shows that, even after allowing for the implementation of the measures that
have already been put in place by the Government, the baseline trend continues to rise. The
most striking revision relates to transport emissions. The average level for the Kyoto period is,
in advance of new measures, put at close to 2 million tonnes a year more than was projected
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

last year. The downward trend in agriculture has also been reversed, as livestock numbers have
begun to rise again.
  There is a sizable fall in projected emissions in the residential sector, thanks in part to the
energy efficiency measures that have been introduced in the past year, but this is overwhelmed
by the baseline changes in transport and agriculture. The consequence, as shown in column D
of the table, is that the Government is, in advance of new measures, projected to have a gap
of 5 million tonnes a year. This must be bridged by a combination of further measures and
purchasing credits under the flexible mechanisms of the Kyoto protocol.
   The House is aware that, on coming into office last year, the Government established a
Cabinet sub-committee on climate change and energy security, chaired by the Taoiseach. One
of its main tasks has been to drive the cross-departmental effort to develop further measures
to reduce emissions. The wider public sector is also contributing to this effort. Tomorrow, I
will be speaking at a major conference on the way forward for local authorities in addressing
climate change.
   As a result of the work of the Cabinet sub-committee, this year’s Estimates and budget
process have given greater priority than ever before on the need for emission reductions, not-
withstanding the emphasis that has inevitably been placed on financial stability in the particular
circumstances of the time.
  I now propose to draw together the key responses across various sectors. Some will deliver
emission reductions in the short to medium term, and these are reflected in columns E and F
of the table. However, the longer term is even more important. Real structural change cannot
be achieved overnight, but we need to put the drivers in place if we are to get the benefit in
future. Much of what I am outlining today will take time to deliver, including emission
reductions, but in the long run they will have a significant effect.
  One of the most effective ways of reducing our national greenhouse gas emissions is to
generate as much electricity as possible from renewable sources rather than from fossil fuels.
The previous Government adopted a target that 33% of electricity consumed would be from
renewable sources by 2020. Today I can confirm that the Government has agreed, on the
recommendation of my colleague, the Minister for Communications, Energy and Natural
Resources, Deputy Ryan, to increase this target to 40%.

  Deputy Damien English: What is the interim target?

   Deputy John Gormley: The target is underpinned by analysis conducted in the recent all-
island grid study which found that a 40% penetration is technically feasible, subject to upgrad-
ing our electricity grid and ensuring the development of flexible generating plant on the elec-
tricity system. The study concludes that this higher level of renewable electricity would reduce
our carbon emissions from electricity by 25% over the business-as-usual scenario, a saving of
around 5 million tonnes.
  This work was further underpinned by the new electricity grid development strategy which
was published by EirGrid last week. The Government will be conducting further analysis to
ensure that the higher renewable electricity target supports competitiveness, is delivered on
time and at least cost to consumers and businesses, while maximising sustainable socio-econ-
omic benefits.

  Deputy Damien English: Send it underground.

  Deputy John Gormley: The decision provides a clear and strong message from Government
on its commitment to ensure secure, competitive and sustainable energy sources.
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

  [Deputy John Gormley.]

  I was also pleased to launch last week the stakeholder consultation paper that sets out the
detailed implementation plan for the new energy efficiency standard for light bulbs and I want
to record my appreciation of the support received from the lighting industry in finalising the

  Deputy Fergus O’Dowd: It is a bright spark.

   Deputy John Gormley: Emission reductions in most sectors take time to achieve and trans-
port is a case in point. In the past, an over-emphasis was placed on road transport by Govern-
ments and the public, and the result is evident in our spiralling transport emissions. However,
the Government is shifting the emphasis towards public transport and is supporting and incen-
tivising the behavioural change that will deliver a more sustainable transport future for all of us.

  Deputy Fergus O’Dowd: The Government is cutting back on public transport.

  Deputy Damien English: Did the Minister read the budget?

  Deputy John Gormley: The new emphasis has been seen clearly in this year’s budget. Despite
the very difficult financial backdrop, key public transport projects are being continued to ensure
continued enhancement of rail services——

  Deputy Fergus O’Dowd: There is a \160 million cutback in services.

  Deputy John Gormley: ——particularly to support commuters, and increased priority is
being given to buses in Dublin and other cities. The critical strategic priorities in Transport 21,
such as metro north and the DART interconnector, will go ahead.
  The commuting experience will be significantly improved through: the removal of pinch
points on quality bus corridors and other bus routes, integrated ticketing using smart card
technology and real-time passenger information at bus stops and on mobile phones. Most
people who stand at a bus stop experience the frustration of not knowing when the bus will
come. Having this information available by mobile phone will make a difference to the attract-
iveness of public transport.
   However, capital investment on its own is not enough. The Government must also encourage
significant behavioural change by providing a clear vision of a more sustainable transport future
backed up by strong policies. That vision and those policies will be set out in the sustainable
travel and transport action plan, which will be published shortly by my colleague, the Minister
for Transport, who earlier this morning made announcements about this.
  In association with that plan, the Minister will also be developing national cycling and walk-
ing strategies to encourage emission-free modes of travel. The plan will set out to create a
culture of walking and cycling, in particular, by ensuring that streets in urban areas are managed
and designed so that we have safe and pleasant environments for pedestrians and cyclists.
Today I can confirm that the Minister and I will be providing a special cycling package for
Dublin to the tune of \5 million to include funding for work on the city centre portion of the
proposed Sutton to Sandycove cycle route. The Minister for Transport and I will also be provid-
ing funding to upgrade and maintain existing cycle routes in Dublin.

  Deputy Billy Timmins: What are the details of the tax relief package for cycling to work?

  Deputy John Gormley: In addition, my colleague the Minister for Communications, Energy
and Natural Resources, together with the Minister for Transport, will announce in the coming
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

weeks the development of a strategy to have up to 10% of our road transport fleet electrically
powered by 2020. The aim is that Ireland should be among the early movers in exploiting
recent international advances in electric vehicle technologies, moving from advanced plug-in
hybrid vehicles to full electric vehicles which have no direct CO2 emissions.
  A particular advantage of this technology is that the vehicles are typically recharged at night,
when the electricity system has its lowest load demand. As we move towards increasing our
renewable electricity generation, mainly by developing new wind capacity, electric vehicles
would provide a useful market for night-time wind generation.
  The first full year in which the major taxes on cars are based solely on their emissions will
be 2009. This follows the introduction in last year’s budget of CO2 based motor tax and VRT.
The early indications from the first three months of the new system are of a strong trend
towards lower-emission vehicles. Of the 42,000 cars which are now charged motor tax on the
basis of emissions, 85% are in the three lowest bands. The increases in motor tax, which I
introduced last night, maintain the strong incentive in the system to switch to lower emission
cars when purchasing new vehicles, with a higher rate of increase for cars above the 2.5 litre
threshold and CO2 bands E, F and G, and no increase for electric vehicles. I intend to keep
the motor tax system under review, in consultation with the motor industry, to ensure that it
meets the twin objectives of protecting local government funding while incentivising greener
motoring in future years.
  The Government’s vision for the transport sector involves major structural change. This will
take time to deliver and to make a significant impact on emissions. In the shorter time period
of our Kyoto target, my Department has estimated that the impact of the relevant fiscal and
other measures in this budget on transport emissions will average 200,000 tonnes per annum
over the 2008-12 period, and this is reflected in the carbon budget table.
  In terms of the role that we can expect from the residential sector in meeting our emissions
reduction targets, I am determined that the public sector leads the way. I am, therefore,
announcing a number of initiatives today that provide a platform for significant progress in
this area.
   Public housing in Ireland has a long record of achieving high quality by reference to the
standards prevailing at the time of construction, but energy efficiency standards are now far
higher than when much of our public housing stock was built. Remedial works and regeneration
programmes, undertaken by local authorities and funded by my Department, are delivering
significant energy efficiency improvements in various locations——

  Deputy Damien English: Fix the windows.

  Deputy John Gormley: ——but a more comprehensive programme of action is now required.
  A full audit of the public housing stock will begin in 2009 to lay the foundation for a prog-
ramme of retrofitting, where required——

  Deputy Damien English: Delaying tactics.

  Deputy John Gormley: ——to deliver modern standards of energy efficiency. In addition, in
parallel with this audit, \5 million will be provided next year to undertake a number of pilot
retrofitting projects; the learning derived from these will play a major part in informing our
approach to the wider roll-out of the programme, which will commence once the audit is
completed. Not only will the ultimate national roll-out of the programme contribute in a signifi-
cant way to the achievement of reductions in carbon emissions, it will also yield a vital fuel
poverty dividend.
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

  [Deputy John Gormley.]

  In addition to this essential need to deal with the legacy of the past, I am also determined
that we look to the future and explore ways in which we can make greater progress on designing
out the carbon impacts of new housing. Much has been achieved already with dwellings now
required to deliver 40% greater energy efficiency on the standards applicable in 2005 and we
intend to bring the improvement on the 2005 position to 60% in 2010. However, we now need
to plan beyond that. We need to push the boundaries of environmental performance of housing
further towards the goal of achieving zero carbon emissions.
   To show further clear leadership on the part of the public sector, I have invited local auth-
orities and voluntary/co-operative housing associations to submit proposals for the delivery of
a number of demonstration projects in this area. The aim of these will be to deliver sustainable
              energy efficient housing developments in which homes will reach a minimum A2
4 o’clock     building energy rating. Some \10 million will be provided next year, and again in
              2010, to support these demonstration projects, which will significantly advance
the knowledge and experience base in the design, construction and use of high performing
energy efficient housing and promote wider awareness of the technologies involved.
  I also very much welcome the additional funding provided in the budget for two schemes
which are the responsibility of my colleague, the Minister for Communications, Energy and
Natural Resources. The home energy saving scheme, introduced this year, provides grants to
householders to improve the energy performance of their homes, while the warmer homes
scheme provides energy efficiency improvements to lower-income households in the private

  Deputy Liz McManus: A Leas-Cheann Comhairle, perhaps the Minister will accept a

  An Leas-Cheann Comhairle: The Minister may, if he wishes.

  Deputy John Gormley: No, thank you.

  Deputy Fergus O’Dowd: Go on.

  Deputy Liz McManus: I wanted to comment on the fact that the Minister reduced funding
for the greener homes scheme by \15 million.

  Deputy John Gormley: Allocations of \20 million have been made to the home energy saving
scheme and \10 million to the warmer homes scheme.

   Deputy Damien English: The Minister, Deputy Gormley, has changed since he crossed the

  Deputy John Gormley: The measures I have outlined in the residential sector, which amount
to an investment of \45 million in the coming year, will support the achievement of the emission
reduction targets which have already been set out in the Government’s draft energy efficiency
action plan and are, therefore, already quantified in the carbon budget table.
   Similarly, I am not separately quantifying the impact of the expansion of accelerated capital
allowances for energy efficient equipment, which was announced by the Minister for Finance
yesterday, but this will reinforce the drive towards greater efficiency and reduced emissions in
the commercial and industrial sector.
  The importance of livestock-based agriculture and food production to Ireland’s economy is
unique within the EU. The scale of the sector is such that it will be impossible to meet our
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

long-term greenhouse gas targets without significant emission reductions in agriculture. We
must find ways of achieving this without undermining the economy, food security and rural
communities. The Government is investing heavily in wide-ranging research on the potential
for more efficient use of inputs, improved production systems and other emission-abatement
measures. The considerable effort we are now devoting to the promotion of organic farming
will also result in lower emissions. Similarly, promotion of biomass for energy will give multiple
climate benefits.
   As in other sectors, most of the benefit will come in the longer term and will be more
relevant to our 2020 target than to the Kyoto period. However, the Department of Agriculture
and Food has estimated emission reductions of 200,000 tonnes per annum on average in the
2008-12 period through new measures now being introduced, and this is reflected in the table
I have circulated to Members. These accrue mainly from organic farming and from increasing
the length of the grazing season.
  The final two columns of the table show the adjustment to the projections for the Kyoto
period as a result of the measures I have outlined. It is important to note that the economic
growth rates underlying the EPA projections are broadly similar to the ESRI’s “Benchmark”
forecast which was published in its Medium-Term Review: 2008-2015 last May. It may well be
the case that the projections now somewhat overstate the baseline trend for the Kyoto period,
given economic developments since May. They will be revised when new forecasts for medium-
term economic growth are firmed up, and I expect some further reduction in the distance to
target. This also means that the requirement to purchase credits is likely to be somewhat less
than the 4.6 million tonnes shown in column F of the table.
   I have made my position on carbon credits very clear on several occasions. I recognise that
the flexible mechanisms are an integral part of the Kyoto Protocol and I appreciate the value
of promoting green investment, particularly in developing countries. I do not have a difficulty
availing of the flexible mechanisms to help meet our obligations in the short term, but with
one major qualification. We must not under any circumstances allow the availability of carbon
credits to deflect us from taking the necessary actions to place us on a low carbon trajectory
in the longer term. Over-reliance on carbon credits in the future will be a millstone which will
hold back our economic development and deny us the advantages which will flow from early-
mover adoption of efficient technology in transport, energy production, agriculture and in our
homes and workplaces.
  This year’s carbon budget is a starting point but much more progress will be required in the
coming year. I particularly welcome confirmation by the Minister for Finance that an announce-
ment on the carbon levy will be included in next year’s budget, taking account of the recom-
mendations of the Commission on Taxation when it has reported. The principle of carbon
pricing is accepted by virtually all economists and analysts as the most effective way to secure
emission reductions. It is the basis of the EU’s emission trading scheme which applies to the
bigger emitters, such as power generators and industrial plants. The carbon levy will enable us
to harness its benefits in the rest of the economy and will deliver a further reduction which will
be reflected in next year’s carbon budget table. Over the next year the Government will
develop further measures to get to grips with the climate challenge, reduce our purchases of
carbon credits and bring us on track for the annual average 3% reduction in emissions to which
we are committed in the programme for Government.
  We must also ensure that Ireland’s economy adjusts to a low-carbon future. It is estimated
that the green technology sector is now worth \284 billion worldwide. The European Com-
mission estimates that eco-industry in Europe already employs more people than either car
manufacturing or chemicals, and various reports have projected huge employment growth in
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

  [Deputy John Gormley.]
the years ahead. Instead of merely taking technological developments from other countries, we
have an opportunity to play a leading role in developing a green economy. Some years ago we
harnessed the State’s industrial, educational, enterprise and development resources to develop
biopharmaceutical and ICT sectors in Ireland, leading to significant inward investment and
highly productive employment. The Government intends to take a similar approach to the
development of the green technology sector. We have already made significant steps towards
embracing this growth area but, to be effective, we must take a “whole-of-Government”
   In this regard, the Government’s Cabinet sub-committee on climate change and energy secur-
ity is examining how the green economy might best be fostered. In the coming weeks a number
of Ministers who have responsibility in the relevant areas will collectively announce the estab-
lishment of a high level action group to advise on the development of Ireland’s green economy.
The group will report to Government within four months, setting out an action plan for
developing green enterprise in Ireland with a view to contributing to economic growth and
providing new, quality employment opportunities in this growing sector. The group will be
tasked with identifying the potential for enterprise development, how education and training
might address skills deficits, necessary research and development and the potential for Irish
firms to bid for public procurement opportunities throughout the EU. We are determined to
guide our economic development and well-being on to a sustainable and low carbon path. By
successfully developing a thriving green technology sector, we can look forward to making a
significant contribution to emission reductions.
   The State already plays a direct role in the economic life of the country. It directly purchases
products and engages services through public procurement. The Government is currently con-
sidering how our public service can give greater consideration to environmental impacts in its
procurement arrangements. This has the potential to play a significant role in giving an incen-
tive to companies to improve their environmental performance, leading to reductions in emis-
sions, and in assisting Irish companies in successful international public procurement com-
  I do not under estimate the scale of the environmental challenges we face, nor am I under
any illusion about the uphill struggle we have in tackling our climate change emissions. The
modest steps we are taking, which are undoubtedly an improvement on what has gone before,
will not be enough to achieve the type of emission reductions we require. We must be much
more radical. The introduction of a carbon levy next year will be an important step, but it is only
one step in what has to be a fundamental multi-faceted approach, involving all Departments.
  I have been campaigning on environmental issues for all of my adult life and I know what
must be done. We have very little time to do it. It is worth making the effort even if it is at
times frustrating. I retain the hope that we can work together on these very important issues
on a non-partisan basis.

  Deputy Damien English: The problem is the Minister will have to listen to us as well.

  Deputy John Gormley: If the Deputies have any ideas on this subject, I will listen to them
any time.

  Deputy Kieran O’Donnell: Is the Minister open to questions?

  Deputy John Gormley: I will now comment on some specific aspects of my Department’s
Estimates. I will concentrate on the principal sectors within my Department’s broad remit. In
2009, my Department will continue to advance the protection of our environment and ensure
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

compliance with EU standards with regard to water, waste and species protection. My policies
and programmes will be framed against the background of the state of the environment report,
Ireland’s Environment, published last week. This is the most comprehensive and authoritative
assessment of our environment available.
   The provision of \560 million for 2009 is the highest ever for water services infrastructure,
representing an increase of 19% over 2008. Against the present economic backdrop this is the
clearest possible statement by the Government of the priority we are giving to preserving and
protecting our water resources as a key element of our environment——

  Deputy Damien English: The Government has no choice. It has been forced to do it by
the EU.

  Deputy John Gormley: ——to meeting EU standards for drinking water and waste water
treatment and to providing critical infrastructure that will ensure ongoing support for the econ-
omy. Good quality water and waste water services are vital for housing, industrial and commer-
cial development. A recent Forfas report helps to identify key locations where improved water
services will be needed to capitalise on potential investment in new jobs and services in the
future. The record 2009 allocation means that the resources will be available to meet these
challenges and to deal with the water services requirements of smaller towns and villages up
and down the country.
   This Exchequer support for water services is backed up by the greatly improved supervisory
structures I have put in place to ensure an optimum return from the investment, both in terms
of service to the consumer and environmental protection. I have provided the Environmental
Protection Agency with the resources to ensure it can effectively carry out the new supervisory
functions given to it under the drinking water regulations.

  Deputy Damien English: Will the Minister have money for the maintenance of these
schemes? That is the main issue.

  Deputy John Gormley: The agency and local authority response to recent lead excesses in
certain water supplies is evidence of the effectiveness of this new regime. It also reminds us of
the fundamental necessity to ensure that the quality of our drinking water supplies meets the
highest standards. In that context, I recently announced a wide range of additional measures
to secure universal compliance with drinking water standards, including accelerated progress
with key schemes and immediate remedial measures to respond to potential risks identified by
the Environmental Protection Agency. Drinking water quality data will also soon be available
on local authority websites for everyone to see, in line with the commitment in the programme
for Government. On the waste water side, discharges from municipal sewage treatment plants
are now subject to licensing by the Environmental Protection Agency to guarantee conformity
with effluent standards and to protect the quality of the receiving waters.
  The Environmental Protection Agency is central to our efforts to protect and enhance our
environment. The 2008 Exchequer provision for the agency of almost \35 million, together
with its income from licensing and the environment fund, positions it well to continue to carry
out its very important environmental functions on our behalf.
  This year has seen major advances in the development of our built heritage programme. In
addition to providing ongoing support for the civic structures and architectural conservation
grants schemes, I have also been in a position to progress new funding programmes such as
the places of public worship fund and the INSTAR archaeological research fund. The provision
of more than \25 million for built heritage in 2009 will consolidate the progress made during
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

  [Deputy John Gormley.]
2008. Next year’s allocation for the Heritage Council of more than \11 million will allow the
council to progress key initiatives such as the buildings-at-risk programme.
  The National Parks and Wildlife Service of my Department is responsible for the provision
of front-line services for the protection of nature. It enforces habitat and species protection, in
addition to providing expertise and advice to Departments——

  Deputy Fergus O’Dowd: They are endangered species.

  Deputy John Gormley: ——landowners, farmers, local authorities and other stakeholders in
regard to protecting sensitive sites and species.
  In 2008, I gave priority to work that will enable us to meet our obligations under the EU
birds and habitats directives, through measures such as the reallocation of resources to high-
priority areas and through putting in place pressing conservation initiatives. This will remain
my focus in 2009. Substantial funding will continue to be made available for the protection of
Ireland’s wildlife and habitats, necessary research, surveying and monitoring, the bog compen-
sation scheme and agri-environmental measures to protect specific habitats and species.
   However difficult the economic transition we are experiencing may be, there are certain
priorities that must always remain at the top of the political agenda. That is why, in the overall
financial provision for housing in 2009, our focus is on utilising the very significant resources
that will be available in a way that takes account of the needs of the most vulnerable and
disadvantaged groups in society.
   The total Exchequer provision for housing will be almost \1.66 billion in current and capital
finance. By any measure, this is a very significant sum. It will allow for the progress made in
2008, when the needs of almost 18,300 households were met through the broad range of social
and affordable housing programmes, to be further built on.
   The Minister of State at the Department of the Environment, Heritage and Local Govern-
ment, Deputy Finneran, will soon announce details of an expansion of the existing local auth-
ority mortgage scheme. It will be a targeted and time-limited initiative to reflect the fact that
access to mortgage finance has perhaps become an even greater obstacle to house purchase for
first-time buyers than affordability.
  The scheme has been carefully framed to offer a line of credit to households who have made
the decision to enter the market at this time but who are unable to do so because of the
credit crunch.

  Deputy Roisın Shortall: Is the Minister going into the sub-prime mortgage business?
          ´ ´

  Deputy John Gormley: The scheme will facilitate, and not incentivise, the home-ownership
aspirations of these households to avoid any distortional impact on the correction that is under
way in the housing market.

  Deputy Kieran O’Donnell: They are going into negative equity.

  Deputy John Gormley: Significant financial challenges face local government over the com-
ing years resulting from the downturn in the economic cycle.

  Deputy Kieran O’Donnell: I ask the Minister to yield to a very quick question. The Minister
for Defence, Deputy O’Dea, made a commitment to me today that the Minister for the Envir-
onment, Heritage and Local Government would deal with the regeneration project in Limerick.

  An Ceann Comhairle: The Minister did not yield.
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

  Deputy Kieran O’Donnell: Will he do so?

  Deputy John Gormley: I did not yield but the Minister of State, Deputy Finneran, will deal
with any such issues.

  Deputy Kieran O’Donnell: I was given a commitment by the Minister for Defence.

  An Ceann Comhairle: The Minister has not yielded at all.

  Deputy Kieran O’Donnell: It is a very important issue for Limerick.

  An Ceann Comhairle: The Minister has not yielded and Deputy O’Donnell is completely out
of order.

  Deputy John Gormley: There are significant financial challenges——

  Deputy Kieran O’Donnell: He will not deal with it.

  Deputy John Gormley: ——facing local government over the coming years resulting from
the downturn in the economic cycle. In working together at central and local levels to deal
responsibly with the current economic challenges, the same principles I outlined in regard to
the Government’s budgetary strategy apply. Local authorities will work to ensure that they are
in a good position to take advantage of the opportunities presented by the economy as it
recovers during the period ahead.
  Local government has benefited greatly from the additional resources devoted to it in recent
years and it is now on a considerably sounder financial footing. Local authorities will spend
well some \11.5 billion in 2008 in both capital and current expenditure. Even with the necessary
adjustments arising from this budget, local authorities will still be very significant economic
players locally and nationally.

  Deputy Damien English: With respect, they are being starved of cash. They are not on a
sound financial footing at all. The Minister should not mislead the House.

  Deputy Kieran O’Donnell: Another stealth tax.

  Deputy Damien English: Every county council is in debt——

  Deputy John Gormley: I will announce my local government fund allocations to local auth-
orities shortly to allow elected members and officials the time necessary to frame productive
and prudent budgets for 2009.
  This Government has had to make very difficult choices——

  Deputy Kieran O’Donnell: Not the right ones.

   Deputy John Gormley: ——in framing the national budget. Local authority members will
face some of the same challenges as they seek to cope with the less favourable economic and
financial position in their annual budget processes. It is important that local authority members
of all parties show leadership at local level and do not shy away from the difficult choices

  Deputy Kieran O’Donnell: We are not getting it at national level.
            Financial Resolution No. 15:   15 October 2008.      (General) Resumed

  Deputy John Gormley: The fiscal position of the Exchequer is extremely difficult. We have
had to examine carefully all spending lines and all potential revenue sources. Expanding the
revenue base of local authorities is a progressive step.

  Deputy Damien English: That is Fianna Fail speech.

  Deputy John Gormley: The announcement in yesterday’s budget that a new charge is to be
introduced for non-principal private residences represents a significant step in the expansion
of that base. What we have done is simple and equitable. It will share the burden more broadly
and serve us well for the future.

  Deputy Kieran O’Donnell: The Government will cripple small business.

  Deputy John Gormley: A charge of \200 per annum is being introduced for all non-principal
private residences. It will be levied and collected by local authorities and, on a conservative
estimate, will yield \40 million per annum. The revenue stream will be used to contribute to
the Exchequer funding to local authorities for operational costs. Liability for payment of the
charge will lie with property owners and not with the occupiers.
  I intend to ask the Government to approve legislation to give effect to this measure in the
near future so the charge can be applied from 2009 and the House will have an opportunity at
that date to discuss its details.
  On the wider issue of local government reform, I have just concluded a process of public
consultation on the reform options set out in the Green Paper. I am very pleased with the wide
range of responses received. I am now considering those responses and am working, as a key
priority, to finalise policy decisions in the Government’s White Paper.
  The measures I have outlined show the Government has responded well in these difficult
times by taking immediate action to protect the public finances while at the same time ensuring
environmental and economic sustainability and protecting the most vulnerable in society.

  Deputy Kieran O’Donnell: What is the Minister’s position on medical cards for the over-70s?

  Deputy Damien English: How does he keep a straight face?

                                                           ´     ´
  Deputy Roisın Shortall: I wish to share time with Deputy O Caolain.
          ´ ´

  An Ceann Comhairle: Is that agreed? Agreed.

  Deputy Roisın Shortall: In spite of all the spin in recent weeks about protecting the vulner-
            ´ ´
able — we heard a great deal about this today — the budget is a blatant attempt to ensure
that ordinary working people will bear the brunt of clearing up the mess the Government has
made of the economy.
   The comments of the Minister for Finance yesterday to the effect that people should pull
together and play their part according to their means are cynical in the extreme. The hallmark
of the economic boom of recent years has been inequality. The past decade has seen most
families working very hard just to survive. Welfare recipients were just about keeping their
heads above water while the elite and high rollers were facilitated in making millions of euro
hand over fist. These were the developers and landowners, bankers, financial institutions, auc-
tioneers and professionals associated with buying and selling houses and lending money to
people who could not afford to borrow it in many circumstances. I refer to all those vested
interests who are so close to Fianna Fail and who, when the going got tough, have been so well
protected by that party. In many ways, this is the real legacy of the former Taoiseach Bertie
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

Ahern and the former Minister, Charlie McCreevy. This structural inequality is so deep-rooted
that the junior partners in Government are either closing their eyes to its existence or have
become so used to it they are not seeing it for what it is.
  The people who are protected in this budget, far from being the vulnerable, are those who
have always been the friends of Fianna Fail and who have always done well out of budgets.
Over the past ten years, it has always been the rich who have got the lion’s share in budgets.
This is exactly what occurred yesterday. I refer to special protection, which has facilitated the
creation of so many millionaires, through ensuring there is as little Government interference
as possible, with the lightest kind of regulation possible and the lightest demands possible in
terms of taxation. That culture continues very clearly in the current budget.
  Far from everyone playing their part, the budget targets those on low and average incomes
and scandalously expects them to bail out the Government. Yet again, the rich, who have done
so well out of the boom, are getting away with it when it comes to contributing to the recovery.
The Minister, Deputy Brian Lenihan, has a downright cheek to call ordinary people to patriotic
action while he allows the rich to avoid all responsibility. What about those high rollers showing
some patriotism for a change? Yet again, they have got away with it.
  The Government had many options available in regard to how it would balance the budget.
The fair thing would have been to ensure that those who could afford it most and who have
done so well in the good times would contribute the lion’s share. The Taoiseach claimed this
morning that the Government had no choice but to do what it did. This is clearly untrue. The
Government had choices about where the axe would fall and it chose to spare the rich and
instead inflict the cuts and pain on ordinary people. Why should anybody be patriotic in the
face of blatant unfairness and inequality? Why did the Minister not seek patriotism from the
very people who contributed to the economy’s difficulties and who could afford to make
   There are many areas where significant savings could have been made which would not have
hurt the poor, if only there was the political will to do so, and my party leader, Deputy Eamon
Gilmore, has already referred to a number of these. Lies are being peddled by Government
representatives who say we had no choice but to do what we had to do because we had to
balance the books. There were clear choices for the Government but it opted to let better-off
people off the hook in respect of their responsibilities and instead targeted those who can least
afford to make the sacrifice.
   I wish to highlight a few of the areas where the Minister, Deputy Gormley, and his colleagues
could have directed their attention in preparation for this budget. For example, they could
have decided to do something about the high level of mortgage interest tax relief for landlords,
which currently stands at over \500 million. While these people have done very well, have a
steady income and in some cases own umpteen properties, the Government, through its poli-
cies, has decided to continue to facilitate them to become even better off. Although the econ-
omy is in difficulty, it has been decided to leave landlords alone, as untouchables in regard to
tax, and to allow them tax breaks of over \500 million a year.

  Deputy John Gormley: We are charging them \200 per property.

  Deputy Roisın Shortall: Contrast that with the treatment of people at the lower end of the
            ´ ´
scale — those in part-time jobs, in community employment or on training schemes — who the
Government will now tax. Almost 800,000 people who are currently outside the tax net will be
brought into it while landlords are left outside with their perks.
  Another example of what the Government could have done is to have abolished tax relief
for super private clinics. If this had been done, \1 billion would have been saved, which would
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

           ´ ´
  [Deputy Roisın Shortall.]
have removed the burden from people on welfare and low incomes, who the Government
sacrificed through its actions yesterday.
  The Government could have done something about the extraordinary pension situation
where extraordinarily generous tax reliefs are provided for those who have their own pension
schemes. I am not talking about ordinary workers on ordinary incomes but, again, about the
high rollers and those who have self-administered schemes, who are facilitated in putting
together funds of over \5.5 million. The high rollers are the untouchables when it comes to
  I acknowledge the Government made some move with regard to other pension products by
putting a cap on the level of tax relief allowed for PRSAs and RACs. However, why did the
Minister not go further? He could have reduced that cap to a level of \100,000 so people with
earnings of up to that amount, who are doing reasonably okay, could continue to make pension
contributions. However, there is no justification on any grounds for the State to subsidise
people earning in excess of \100,000 in their pension contributions. If the Government had
done this, if it had been bold in its decisions and if it had decided to be fair in the budget, it
could have raised an extra \287 million from that measure alone.
    There are of course other areas. For example, the Minister could have decided to close the
loophole that allows developers to avoid stamp duty on commercial property. This would have
brought in another \250 million if the Government had the courage to do it and if it was driven
by the principle of fairness. Unfortunately, this was not the way chosen. Clearly, the Govern-
ment shied away from the difficult choices it should have made. Instead of boasting about
being brave and not shying away from choices, it absolutely shied away from the choices facing
it. It could have decided to target those who were better off, who have done very well in recent
years and who could well afford to make sacrifices. Instead, those people were left to their
own devices. The Government decided that those who have done very well, the rich, would
become the untouchables and instead it took the soft option of targeting those on average
incomes and on welfare.
   I want to comment about the appearance of the Minister, Deputy Eamon Ryan, on the news
last night. I could not believe it when I listened to his comments on the budget. In that self-
satisfied manner and style he has cultivated over the past year or so, he told people he was
actually proud of this budget because it had protected welfare, education and health. The
Minister needs to wake up and see what is going on. I do not know whether he is too busy
pursuing his own agenda to see what other people have had to contend with in terms of the
provisions of this budget but he clearly does not understand the extent of the cuts that have
been introduced.
  For example, the social welfare budget is approximately \1.5 billion more than the projected
outturn for the current year. However, when one considers the likely significant increase in the
number of claims from those being made unemployed or redundant, and all of the additional
payments for the back to school allowance, MABS and the other extras which will undoubtedly
arise, far from there being an 8.3% increase in the social welfare budget, the real increase in
the Department’s budget is less than 5%. In real terms, this breaks down into increases of
between 3% and 3.3%. In the context where there is a current projected rate of inflation of
4.3%, far from welfare recipients making any progress, they will not even stand still. In real
terms, they will be worse off next year than they are this year. By any standards, that does not
represent protection for those dependent on social welfare.
  Equally, I would tell the Minister, Deputy Eamon Ryan, to wake up and see what is hap-
pening with regard to health, where there is the loss of the automatic entitlement to the medical
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

card for those over 70, increased accident and emergency charges, the halving of tax relief on
medical expenses, increases in hospital charges and long-stay charges and an increase in the
threshold for the drugs refund scheme. All of these measures will impose huge hardship on
people on low incomes who have health problems. There are many people in that category and
they are the ones who will bear the brunt of the cuts announced in the budget.
   The same is true in regard to education. What has happened on the education front is shame-
ful. At a time when we should recognise the importance of education and ensure people con-
tinue to receive good quality education so that we strive to reach European standards, the
Minister has decided to increase the pupil-teacher ratio. That is an extraordinary decision. In
the light of the campaigns that ran last year in that regard I hope the INTO will now give
Fianna Fail its answer.

  Deputy Fergus O’Dowd: Hear, hear.

   Deputy Roisın Shortall: Funding has been reduced to primary and secondary schools that
             ´ ´
are already struggling just to pay electricity and cleaning bills. School transport costs are up.
Registration fees are up by \600. On that front also I refer to the abolition of child benefit for
18 year old students because that will have a huge impact in terms of education. I do not know
if Ministers understand that some teenagers struggle to stay on in school because their families
are poor. The withdrawal of child benefit from 18 year old students who are in school would
put enormous pressure on them at a time when they are already finding it difficult. It is criminal
to abolish child benefit for people in those circumstances. We will reap the rewards of that
downstream in terms of a higher level of school drop out.
   The changes in the budget have all the hallmarks of a Minister for Social and Family Affairs
who has little interest in her portfolio and who cares even less. Let us examine some of the
things that are happening. The introduction of the new employment levy means a pensioner
with an occupational pension will be taxed on the part of his or her income that does not come
from social welfare. A pensioner with an income from an occupational pension of \10,000 will
have to pay \100 in tax. That claws back \100 of the extra \7 per week from his or her State
pension. The income of such pensioners will rise by a mere 1.2%. That will go nowhere in
terms of keeping abreast of the increases in the cost of living.
   A lone parent receiving a one-parent family payment and rent supplement who has a part-
time job earning \70 per week will lose from the budget. While such a person will gain \6.50
per week on his or her welfare payment, \2 per week for one child and a possible \2 on fuel
allowance, he or she will have to hand back immediately \5 in extra contributions to her rent
supplement. Out of a welfare increase of \6.50 there is an immediate clawback leaving a net
increase of \1.50. That is shameful. The overall increase for such a person is 1.5%, which is
nowhere near what is needed to keep pace with the cost of living. Things get worse for lone
parents with dependants aged over 18. The measures announced to compensate for the loss of
child benefit will not go anywhere near compensating such a person. If one does the sums on
that, one will see that those people, undoubtedly, will be worse off.
  Much of the detail of the budget did not come out yesterday. One had to read the small
print. Having gone through the Budget Statement, the Labour Party has identified 30 new
charges, stealth taxes, cuts and reductions in services that were included in the budget, which
were largely kept hidden away in the small print. We have called those the treacherous 30.
Those 30 treacherous cuts, individually and cumulatively, will have an extraordinarily negative
impact on ordinary working families, people on average incomes and those dependent on wel-
fare. Those cuts are a shameful indictment of the kind of inequality pursued by the Government
over many years and which continue in these hard times. All of the cuts were specifically
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

           ´ ´
  [Deputy Roisın Shortall.]
chosen by the Government to balance the budget. They are cuts that specifically target ordinary
people. They represent an extraordinary betrayal of trust and an abandonment of the weakest.
Far from protecting the vulnerable they force the vulnerable and those on average incomes to
carry the can and bear the brunt of the mistakes made by the Government to bail it out while
the rich get away with paying little in terms of contributing to sorting out the current mess. By
any standards this is a shameful budget and members of the Government should be ashamed
of it.

                      ´ ´
  Deputy Caoimhghın O Caolain: It is quite amazing how the Minister for Finance could keep
a straight face when he described the budget as a “call to patriotic action”. Where were the
calls to the wealthy to be patriotic during the Celtic tiger years? Many of the so-called patriots,
the tycoons and multi-millionaires who were pampered by the Government, are tax exiles who
pose as great Irishmen and women when they are in this country but who hide their riches
away in tax havens so they do not have to pay their fair share here. For those who were not
tax exiles there were massive tax breaks throughout the terms of office of Fianna Fail-led  ´
Governments over the past decade. The wealthy were allowed to avoid tax in a myriad of
different ways while ordinary PAYE workers bore the burden, as they always have. Property
was God and Charlie McCreevy was the high priest, followed closely by the present Taoiseach
in his years as Minister for Finance.
   The tent at the Galway races has been folded up, but the fat cats have not gone away you
know. As in all recessions, wealth will be less conspicuous but the wealthy will still prosper
while the mass of the people pay for the greed and mismanagement of the Ministers and their
friends who wined and dined in that famous tent. Fianna Fail-led Governments and their
friends, the property speculators and developers, the stock-brokers and the bankers, have
created this massive economic mess. Will they own up and pay the price? Not at all. It is the
people who will be made to pay the price. Yesterday the first instalments of that price were
extracted in what can only be described as a shameful and disgraceful budget. It is a budget of
savage cuts in public services and widespread new charges and taxes that will penalise those
on low to middle incomes. Yet, the Minister urges us to be patriotic. James Connolly wrote
about patriotism: “True patriotism seeks the welfare of each in the happiness of all, and is
inconsistent with the selfish desire for worldly wealth which can only be gained by the exploi-
tation of less favoured fellow-mortals.”
   The levy of 1% on incomes below \100,000 per annum represents a significant increase in
tax for the lowest paid. Even those on incomes below the tax threshold, those who pay no
income tax at present, will be hit with this levy. It is totally regressive and inequitable. The
Government trumpeted the miserly half of 1% pay rise for the low paid in the recent social
partnership agreement. Now they have wiped it out and taken money away from the low paid.
The same low paid families will suffer disproportionately from VAT increases, health charge
increases, the cut in child benefit for 18-year old children, the cut-off of child care supplement
at five and half years of age and the whole range of other hidden charges and taxes arising
from the budget. That is on top of rising prices for food that are hitting poorer families hardest.
  On the very day of the budget one of the largest hospitals in the country, Our Lady of
Lourdes in Drogheda, turned away emergency medical and surgical cases because its accident
and emergency department could not cope. Then we saw the minimal increase in the health
budget for 2009, which is well below inflation and will lead to massive cutbacks across the
health services. I have no doubt people will suffer and die avoidable deaths as a result.
  Means testing for medical cards for older people are being reintroduced, another example
of the totally incoherent health policy of the Government. The automatic entitlement for the
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

over-70s was introduced with great fanfare and now it is being taken away, causing huge con-
fusion, anger and distress to older people. My Dail office and those of my colleagues and our
party ard oifig have been receiving telephone calls all day from older people who are incensed
by this decision. Sinn Fein said when this scheme was introduced that if the principle of univer-
sal entitlement was accepted for the over 70s, it should be accepted for all, but now the Govern-
ment has taken a further step away from the type of universal public health care that we
desperately need. At the same time people are being forced to pay higher charges for accident
and emergency visits and for medicines.
  Even before this budget, the public health system was being hit hard by cuts. Hospital
services are being closed for weeks on end at the end of the year to stay within HSE budgets.
Home help hours have been cut. In the north-east region there have been cuts in orthopaedic
services and dermatology. I learned yesterday that there is a five year waiting list for derma-
tology in Tallaght hospital. Surgical beds at Dundalk are to be reduced from 32 to eight from
next Monday. The axe continues to fall on services at Monaghan General Hospital where all
acute medical services are scheduled to transfer to Cavan General Hospital by the end of
next month.
  During the summer two senior doctors were let go from Dundalk hospital, in Crumlin chil-
dren’s hospital there was a ward closure affecting children with cystic fibrosis, in Letterkenny
General Hospital a 20-bed ward was closed for the summer and there was a scaling back of
day services. These are only some of the cuts. I shudder to think of what awaits us in the public
health services in 2009. What now of the 2007 Green Party manifesto which said “Access to
appropriate health care is a basic human right”?
  Of course the fat cats will not be effected by these health cuts. They will be able to avail of
the private hospitals provided for them by the Government at taxpayers’ expense. The cost to
the Exchequer of tax breaks to developers of private hospitals rose from \1.9 million in 2004
to \10.6 million in 2006, which is information provided by the Minister for Health and Children.
The cost in 2006 alone would have funded more than 6,000 extra full medical cards for a year.
  The story is the same in education. The rise in class sizes and the cut in teacher numbers is
a disgrace. Once again schools in less well-off areas will suffer most.
  There are no measures to address the massive child care deficit in this country. As a result
of the budget there will be fewer child care places and child care services here, already the
most expensive in Europe, will rise even higher. To rub salt in the wound, the Minister has cut
off the early child care supplement at five and half years of age.
   It is a myth that spending on public services has been too high, a myth I want to blow out
of the water. Cutbacks in public services are totally unacceptable. Before the budget we were
already spending the third least on public services in the European Union, followed only by
Estonia and Lithuania.
  We said in our budget submission in 2004 that public goods are worth financing. They should
not be treated as expendable and thus the most convenient place to cut. Well managed short
to medium-term investment will often yield medium to long-term savings as other direct and
indirect costs are reduced. The health service is the prime example of how cuts and underfund-
ing, which were seen as short term, have had the unintended consequence of driving up costs
and significantly reducing efficiency in the longer term. Thus, value for money is complex, can
only be accurately gauged in the medium to long term and cannot always be equated with
spending less. That is a lesson the Government refuses to learn and it is leaving a terrible
legacy for the future.
  The budget is very bad news for the Border region also, apart from all the other issues,
including the fact that we will suffer most from the cuts in health spending. There is a major
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

                  ´ ´      ´
  [Deputy Caoimhghın O Caolain.]
question mark over the completion of the N2-A5 route realignment from Monaghan town to
the Border, which includes the proposed bypass of Emyvale, and Monaghan military barracks
is to close, removing another local source of social and economic activity.
  In the past decade the inequalities in this economy have been repeatedly identified and
analysed and positive policies have been promoted by the Combat Poverty Agency. The
budget, which will foster further inequality and poverty, is also the budget that has tried to gag
the Combat Poverty Agency, a move I can only describe as breathtaking in its arrogance. The
future of the money advice and budgeting service has also been put in doubt, a service that
will be needed more than ever after this budget.
   I emphasise what I said outside this Chamber. This budget is a recipe for emigration and the
Minister, Deputy Brian Lenihan, will be standing at the airport to take \10 flight tax out of
the emigrants’ pockets as they queue up to leave. Sinn Fein rejects this budget as we reject the
policies which fostered inequality, which led directly to this recession and which have now
spawned this monstrous budget. We will oppose the Government, defend public services and
promote policies that will create employment and revive our economy based on sound found-
ations. We will be here to challenge the Government to the end.

  Minister for Health and Children (Deputy Mary Harney): The backdrop to the budget is the
serious financial situation that Ireland, like many countries, finds itself in. The events of recent
times are, to use a phrase used in a different context, quite bizarre. Household names in bank-
ing have gone under.

  Deputy Fergus O’Dowd: The Government should go under.

  Deputy Mary Harney: In the first instance, the Government had to secure the stability of the
banking system, which is fundamental to the operation of the country. Against the economic
backdrop that the Government faced, its priority was to secure the economic and social future
of the country. This was foremost in our minds in all we did in framing the budget. The
Government wished to ensure that where choices were made it protected, as far as it could,
those most vulnerable in society.
  I heard reference to health spending, which has increased in Ireland in the past ten years by,
on average, 8.8%, the second highest among OECD countries. Health spending in Ireland
today accounts for 9% of national income, which is on a par with OECD countries, even though
11% of the population is over 65 years, whereas in the UK the figure is 18% and in some other
European countries it is more than 20%.
   We have a substantial base of funding of the public health system. The challenge is not
merely to invest more funds as they become available, but to reform the manner in which we
provide services, which has been the focus of much of what we have done in recent years. In
particular, we must ensure we provide services that are quality assured and driven by patient
safety. Nowhere is that more important than the area of cancer care. The outcomes for cancer
treatment in Ireland are not as good as in other European countries, with the exception of the
treatment of children’s cancer, in which we are top of the class worldwide. The reason we do
so well in the treatment of children’s cancer is that we have centralised the treatment in one
hospital, even though patients can receive services in 16 different places throughout the coun-
try. The diagnosis, initial surgery and treatment are planned at one designated centre. We see
significant benefits from this system with the outcomes and we seek the same for the treatment
of other cancers.
            Financial Resolution No. 15:   15 October 2008.          (General) Resumed

   The Government faced spending choices between, for example, more investment in cancer
services to ensure the eight designated centres will be in place as quickly as possible and other
choices. All breast cancer services will be moved into the new centres by March of next year.
During next year, Professor Tom Keane will be involved in moving prostate and lung cancer,
the next two priority areas, into the eight centres. Professor Keane sought funding to assist
with the transition of the services and to recruit the expertise we need to provide multi-dis-
ciplinary teams of physicians in the eight cancer treatment centres, including pathologists, radi-
ologists, surgeons, medical oncologists and so on.
   The Government has approximately \454 million available in extra funding for health next
year. This amounts to 3.2% year on year and when the once off payments during 2008 are
factored out, such as the long-stay repayments, the figure is 4.2%. Inflation is forecast to be
2.5% next year. The position is not the same as it was in 1987 and 1988 when the Government
reduced spending on health by 3.5%. Faced with these choices, the Government decided to
invest in the eight cancer treatment centres for next year and to invest in the fair deal. There
is more than 20,000 older people in long-term care. Approximately half of those are in publicly
funded facilities and have 90% of their care costs met by the State. Those not in that situation
have approximately 40% of their costs paid for by the State. That is unfair and inequitable and
places a heavy burden on the older person and his or her family. It causes great distress to
many older people who have had to sell their houses or whose children have had to remortgage
their houses to pay for their parents’ care. That is why the fair deal is so important. It will
ensure, for the first time, that those in publicly funded long-stay facilities and those in privately
funded facilities are treated equally. It will greatly relieve the stress older people and their
families associate with going into long-term care.
  There has been a great deal of debate about medical cards. There are 350,000 people over
the age of 70 in Ireland. Approximately 215,000, or 60%, of them have a medical card based
on an assessment of means. They will not be affected by the decision that was announced
yesterday. The other 40% of this country’s over-70s — some 140,000 people — have a medical
card not on the basis of their means but on the basis of their age. We estimate that 14,000 or
15,000 people from within this group will get a full medical card when means tests are carried
out. A further 30,000 or 35,000 people will get a doctor-only medical card. That will mean that
80% of people over the age of 70 will not have to pay to go to the doctor. Of the approximately
70,000 people not in this category, those who earn less than \650 a week, or \1,300 a week for
a couple, will be able to avail of a health support payment of \400 for an individual, or \800
for a couple, to meet the cost of going to the doctor. Approximately 5% of those over the age
of 70 will be outside the limit threshold and will not get any support.
   When we considered our options, we decided to prioritise the need to invest in cancer care
and the fair deal. We are focusing on the recruitment of approximately 120 speech and language
therapists for children with special needs who have been assessed as being in need of such
services. We are helping the 53,000 families at the bottom of our society that avail of home
help services. We are assisting the 10,000 older people who receive home care packages and
medical support in their own homes. Such packages prevent them from having to go into long-
term care. The decisions we had to make were not easy. I believe we made appropriate choices,
in light of the resources available.
  I remind those over the age of 70 who do not get a full medical card, or a doctor-only card,
that they are eligible to apply for a hardship medical card. Some 70,000 people currently receive
the benefit of that card. It is given to individuals on the basis of their circumstances. The
hardship medical card helps people with particular illnesses or ongoing health requirements,
for example. As a result of this flexible approach, 70,000 people currently avail of the hardship
medical card. It will continue to be available to people over the age of 70.
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

  [Deputy Mary Harney.]

   Reference was made in the House this morning to the VHI. The VHI has informed me that
contrary to what Deputy Gilmore said, there is no evidence that people over the age of 70
stopped subscribing to the VHI, to any great extent, when the over-70s medical card was
introduced. The VHI has said that the proportion of its clients who are over the age of 70 has
increased from 5.5% to 6.5% in recent years. The fact that a higher percentage of older people
now have health insurance contradicts what Deputy Gilmore said in the House. There is no
cross-over between the services available under the medical card and those offered by the VHI
in 2001 and 2002. As the Taoiseach said this morning, the services in question were hospital-
based. The only expense covered by both the VHI and the medical card was the inpatient
charge, which one pays for a maximum of ten days when one is in hospital. If one has a medical
card, one does not pay that charge. The VHI has told me that if anyone wishes to return to its
plan P, to which approximately 25,000 people currently subscribe, they will not be subject to
any kind of waiting period. It is important to clarify that the suggestion made by Deputy
Gilmore this morning was incorrect.
  The increase in the accident and emergency charge is one of the other health service issues
mentioned during the course of today’s debate. The increase will raise about \10 million per
annum, which is a small amount when compared to the overall level of expenditure. It is
obvious that medical card holders do not pay the charge. The purpose of the increase is to
encourage many of those who come to accident and emergency departments for relatively
minor matters to contact their general practitioners in the first instance. Those who are treated
by GPs do not have to pay the accident and emergency charge. As I have said previously,
Ireland enjoys very good working-day and out-of-hours general practitioner services. There is
evidence in Ireland, unlike many other countries, to suggest that many of those who attend
accident and emergency units would be better served by first going to general practitioners,
who can deal with between 90% and 95% of our health needs.
  I wish to speak about the charge for private beds in public facilities. It has long been Govern-
ment policy that the taxpayer should not have to fund, or subsidise heavily, private beds in
publicly funded facilities. Such facilities were paid for by the public purse and their staff are
paid from the public purse. As insured patients have preferential access to private beds in
public facilities, it is not unreasonable that the taxpayer should not be asked to subsidise such
beds heavily. That is why we have been increasing the charge for such beds to private insurers
over recent years. The charge is being increased by 20% this year. That will add 4% to the
cost of private health insurance. Beds that are not available to everybody on the same basis
cannot be heavily subsidised by the taxpayer. I do not believe anybody would regard that as
being fair. The increase in the charge for long-stay care, which was mentioned in the House
earlier, is in line with the increase in pensions over recent years.
  The fundamental challenges this country faces are to restore the public finances and to
protect employment as quickly as possible. If we do not succeed, this country’s future challenges
will be much greater than those we currently face. We need to prioritise the challenges I have
mentioned. Fine Gael has suggested the Government did not go far enough with its proposals
to reduce public spending. Deputy Bruton suggested health spending should be cut by a further
\700 million next year. Quite honestly, I do not see how we could take such a level of funding
away from the public health services in 2009.

  Deputy Finian McGrath: Hear, hear.

  Deputy Mary Harney: The option of firing 10,000, 12,000 or 14,000 public servants is not
open to us. I have said previously that I favour a redundancy plan that is based on a full
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

analysis and assessment. In the past, we have had redundancy plans which were not based on
a full analysis. If people are superfluous to requirements in one area, while shortages exist in
another area, of course that will be dealt with in the context of the announcement made yester-
day by the Minister for Finance. That has to be done on a planned voluntary basis. That is what
will happen. Contrary to the myth that most of the new employees who have been recruited by
the health service over the last three years are administrators, managers and other bureaucratic
officials, over 80% of them are clinical personnel, such as doctors, nurses, physiotherapists,
occupational therapists and medical social workers.
   I said at the outset I wanted to share time with the Minister, Deputy Dermot Ahern. Before
I give way to him, I wish to repeat that difficult decisions have to be made in the circumstances
we currently face. When we make difficult choices, we have to ensure we stay in contact with
those who are most affected by them. A helpline is available to the 140,000 people over the
age of 70 who have an age-based medical card.

  Deputy James Reilly: It is not in existence.

  Deputy Mary Harney: It is.

  Deputy James Reilly: It was not working when I rang it earlier today.

  Deputy Finian McGrath: The people in question are too busy ringing Joe Duffy.

  Deputy Mary Harney: They will receive communication within the next fortnight. By the end
of the 2008 calendar year, all of them will have been assessed to determine whether they get
the full card, the doctor-only card or the cash payment.

  Deputy Fergus O’Dowd: Do they lose the card in the meantime?

  Deputy Mary Harney: That commitment will be honoured.

  Deputy James Reilly: What about the health levy?

  Deputy Mary Harney: They will not pay the health levy, as I said yesterday. I think the
Deputy was at the press conference at which I made that clear. The Minister for Finance,
Deputy Brian Lenihan, has indicated that the health levy will not apply to people over the age
of 70.
   I wish to make clear that the higher tax benefit at the marginal rate of tax, 41%, will apply
to nursing home charges. That benefit will not be eliminated until the fair deal is in operation.
When the fair deal is in operation, it would not be unreasonable to bring the tax benefit down
              to the standard rate of tax, in line with all other medical expenses, voluntary
5 o’clock     health insurance and mortgage interest relief etc. Those who have examined the
              Irish tax system from an equity point of view have said all citizens should be
treated equally. Those who earn the most money should not get preferential treatment in the
tax system, as far as benefits of this nature are concerned.
            ´       ´
   Deputy O Caolain said the fat cats are getting too much. He went on to say everybody
should be able to avail of universal benefits. That does not make sense. At a time when tough
choices have to be made, we need to ensure we protect those most in need. That is what we
sought to do in the health Estimates adopted by the Government for 2009.

  Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): It is hard to listen
           ´      ´                                               ´
to Deputy O Caolain. I read in the newspapers recently that Sinn Fein has \250 million stashed
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

  [Deputy Dermot Ahern.]
away in US banks. That has not been denied, so I suppose it is true. Perhaps the Deputy and
his party could give us a bit of a hand and repatriate some of that money.

  Deputy Fergus O’Dowd: The Minister should ask Frank Dunlop to give him a hand in getting
his house in order.

  Deputy Dermot Ahern: I could not believe my ears when listening to Deputy Flanagan
earlier. He said that we need additional resources in the area of justice. At the time I had in
front of me the pre-budget document Fine Gael published. On page 19 the party advocated
freezing the voted Exchequer current spending for 2009 at 2008 levels, and then looked for 3%
savings in every Department. How could we deal with the situation by introducing cuts as
drastic as those advocated by Fine Gael? My Department has to live with a cut of 2%, yet
Fine Gael is asking for more than 3%, even though it wants Exchequer spending frozen at
2008 levels.

  Deputy Seymour Crawford: It all depends on where the cuts are made.

  Deputy Fergus O’Dowd: What about abolishing those new junior Ministries?

   Deputy Dermot Ahern: As the Minister for Finance has underlined, there has been substan-
tial investment in public services over the past ten years. This has made possible the very real
improvements which have occurred in communities throughout the country. In facing up to the
changed fiscal circumstances, we should not lose sight of the strong base from which we are
operating. The range and depth of our public services would be the envy of many societies and
contrasts dramatically with where we stood ten years ago. In the justice and equality sector,
we have been able to increase resources by 8 to 10% per annum over the past four to five
years. By any yardstick, this has been an unprecedented increase in the resources devoted to
combating crime and addressing inequality.
  The changed financial circumstances are such that this level of increase is simply no longer
possible across the board. Against that backdrop, we need to renew our focus on driving value
for money throughout the system, to pare back unnecessary administration or duplication and
to focus on areas of greatest priority. That is what I have tried to do. Our greatest priority is
the fight against crime. We need to secure the effective capacity of the organisations at the
heart of that effort. That is why I have put the money where it should be. That is the choice I
made, and I make no apology for it. I firmly believe that the communities we serve would
expect nothing less. To govern is to make choices, to identity priorities and to implement those
rational choices. In short, the funding is following the priorities.
                                            ´    ´
   The resources provided for the Garda Sıochana in 2009 will make possible an increase in the
attested strength of the force to almost 14,900, which is a full increase of 2,500 since the end
of 2004. It is an increase of about 700 on this year. Notwithstanding the necessary restriction
in public sector numbers generally, it is our intention to take on 400 new garda recruits during
2009, in addition to the almost 1,100 already in training. An easy option would have been to
freeze recruitment, as Fine Gael did when last in Government with the Labour Party, and to
compensate by increasing overtime expenditure. I rejected that option. Instead, the Govern-
ment has taken a strategic view that a more desirable and sustainable approach is to build up
the basic capacity and strength of the force. I am convinced that this is the right option and
will be seen as such by communities who rightly demand an increase in visible policing in their
neighbourhood areas.
                                    ´   ´
  While we have reduced the Garda Sıochana overtime budget, a substantial allocation of \80
million — or 4.6 million overtime hours — is being retained. Crucially, \21 million is being
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

ring-fenced for Operation Anvil. This will make it possible to continue with a wide range of
intensive policing activity, with a particular emphasis on tackling organised gangland crime.
There is no question of the Government going soft on the godfathers of crime and this level
of ring-fenced funding is a clear indication of our steely resolve.
   These are number of Garda ICT projects to be rolled out, including the national digital radio
service and a new major case investigations system. We are also providing \10 million to begin
outsourcing the safety and speed cameras in line with the road safety strategy, and 600 of these
cameras will be rolled out by the middle of next year. The budget for the Criminal Assets
Bureau is up 20% and an overall allocation of \18 million is being made for State forensic and
pathology services. The best possible technical and forensic insight to detect and prosecute
crime is essential. This funding package supports the new legislation that I will be bringing
forward in the not too distant future.
  As I am sharing time, I will leave it at that. Now that Deputy Flanagan is here, I must ask
how he can ask for a 3% cut in spending on top of freezing Exchequer funding at 2008 levels
and then ask for more resources for the Garda out of the other side of his mouth? That is what
he is at.

  Deputy Charles Flanagan: The Minister took \20 million away.

  Deputy Fergus O’Dowd: The Minister is so arrogant.

  Deputy Dermot Ahern: Deputy Bruton is in here every day calling for less spending, yet his
colleagues are now calling for more spending. They are talking out both sides of their mouths.
They are hypocrites.

  Minister for Communications, Energy and Natural Resources (Deputy Eamon Ryan): In
what was undoubtedly going to be a very difficult budget, one of the priorities was to make
sure that spending increases would be possible in social welfare, health and education. While
the increases may not have been what the Minister, Deputy Harney, and the Minister, Deputy
Batt O’Keeffe, had hoped for in their Departments, it was important for the Government to
give a signal that those were the areas in which we wanted to prioritise any spending increases.
Other Ministers, including myself, have to do whatever we can to make cuts in spending to try
to facilitate that protection of crucial social services for our people.
   Our Department exceeded our targeted cut in the administrative area. The overall current
and capital spending reduction was around 7%. While that is not something we welcome, we
now have the opportunity to provide economic development and good fiscal management. It
was right for the Department to manage that reduction and to look for efficiencies in order to
deliver the same level of service, while cutting our overall Vote at the same time. Around \366
million has been provided for the current side, although much of that includes money which is
being transferred through the account, such as television licence fees. On the capital side, \134
million has been provided for. This still allows us to provide an important stimulus package to
several crucial industrial areas in the development of our economy. I would hope that the
capital amount would be augmented by a certain amount of carryover from budget overruns
in sections that do not use their full allocation. That will help us in meeting our key projections
for 2009.
  Our own payroll budget is slightly out of line, but this is because we have had a transfer of
resources from other Departments. We have taken on responsibilities that were previously in
the Department of the Taoiseach. The overall administrative budget decreases by 8%. This
will put pressure on the Department to manage its affairs in a way that delivers real efficiencies.
The State agencies that are tasked with delivering many of the projects will find it difficult
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

  [Deputy Eamon Ryan.]
because of the tightness on the current expenditure side. However, I believe they can do it. In
this respect, the Government made a strategic decision that it was better to proceed with a
development of a single national fisheries authority, maintaining our regional offices and struc-
tures, but not the regional boards as they currently exist. That strategic decision is one for
which I will have to legislate in the establishment of a new national fisheries authority.
   One of the areas in which our Department has real potential to help us all through these
difficult times is to stimulate new economic development and create new jobs. We concentrate
on the contraction or management of financial resources alone. We must develop a new econ-
omy which delivers new jobs and new revenue to pay for the social services that will be needed
in future years. This is our central role. I regard my Ministry as a crucial economic development
Ministry and I see a potential to develop new economies, particularly in the area of energy and
broadband services. In that regard I was pleased that the Minister for the Environment, Heri-
tage and Local Government, Deputy Gormley, was able to announce the Cabinet decision to
increase the target we are setting for development of renewable electricity as outlined in this
year’s publication of the all-island grid study. It behoves all State agencies, the regulator, the
sustainable energy office and other Departments to row in on a co-ordinated approach to meet
those targets. The difficult economic climate and credit crisis will make it difficult to allow for
capital allocations and capital spending in this area. We are facing difficulties and a significant
challenge but I am committed to rising to this challenge to create new jobs in the energy
industries and to provide cheaper and cleaner electricity to power our economy.
   I am pleased that funding of \71 million has been made available to fund sustainable energy
and energy research programmes. Sustainable Energy Ireland will be the key agency. I hope
to strengthen its resources and its operational structures to allow it to deliver an ever-expanding
budget. The agency has been in existence for five or six years but it needs to have strengthened
structures in recognition of its increased workload. The home energy savings scheme was
launched last year on a pilot basis and it appears to be proving very successful. It is very
popular in the areas of the country where it has been introduced. It has been very successful in
economic terms as the analysis shows that energy efficiency, in particular insulation of existing
buildings, gives the quickest and best economic return. There is a return to the State in terms
of lower emissions and lower fuel use but also a return to the householder in terms of cutting
back household bills at a time when gas and electricity prices are very high. I am looking
forward to expanding that programme and to running it in conjunction with a rapidly expanding
warmer homes scheme.
   We will seek an innovative approach from the public utilities to assist in the delivery of
energy saving measures to low income households so that they can cut back on their bills. This
has to be taken in tandem with the work being carried out by the Department of Social and
Family Affairs and the Minister at that Department, Deputy Mary Hanafin, in the area of fuel
poverty. We wish to help people not only in fiscal terms but also to reduce their use of elec-
tricity which is the best long-term solution to the issue of fuel poverty.
  My Department’s other key development in the energy area will be publication of and action
taken on the national energy efficiency action plan. Particular attention will be focused by my
Department, with my colleagues in other Departments, on how the State can achieve real
savings in our classrooms, hospitals, prisons and Garda stations. We must lead in the efforts to
save money for the State. The investment in energy insulation and efficiencies within our offices
and Departments is one of the best ways of delivering efficiencies. This public sector prog-
ramme, in which I hope Sustainable Energy Ireland will take a lead role, will be crucial. I will
be working with my Government colleagues to see what real programmes can be delivered
collectively to reduce our energy use.
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

  I refer to continuing investment in expansion in new areas. The ocean energy unit was
successfully established in Sustainable Energy Ireland this year. As part of the ten-year plan
set up a number of years ago, this unit must move into the launch of prototype devices and we
must expand into new areas. I appreciate the Minister for Finance has seen the sense of the
capital tax supports available for businesses to help them in that regard.
  The key developments in the communications area will be the delivery of our national broad-
band scheme and of high speed broadband to secondary schools to allow students in those
schools to avail of the fastest broadband speed. I refer to the continuing work of the national
digital research agency in developing Ireland as a real centre for the global knowledge
  Given the current spending restrictions, it will be difficult to deliver in other core areas of
my responsibility. However, key projects such as the remediation of existing mine sites, the
seabed survey, the provision of TG4 and the fisheries boards will continue to be provided for
and are a crucial part of the work to be undertaken.

  Deputy Fergus O’Dowd: I wish to share my time with Deputy Simon Coveney.
   This is a very important debate on the budget which has placed the most difficult tax burden
on the people of Ireland since the foundation of the State. The Fianna Fail part of the Govern-
ment and what is left of the Progressive Democrats part of it have been in power for more
than 11 years. They have been managing the affairs of the State for many years and they had
prior knowledge of our economic situation but refused to act earlier. They went into a massive
post-election spend which continued despite the gathering of economic storm clouds. They
cannot escape the fact that under their leadership the economy has become less competitive and
less efficient and that jobs are being lost left, right and centre as a result of Government policy.
   There should have been no cutback on capital expenditure on transport. A well functioning,
efficient and competitive transport system is the key to Ireland’s economic recovery. The World
Economic Forum competitiveness report published last week listed inadequate infrastructure
as the most problematic factor for those doing business in Ireland. It does not make sense to
cut back on expenditure on transport infrastructure. The quality of our transport infrastructure
has dropped a number of places over the past year. Ireland dropped from 55th place in 2007
to 64th in 2008 out of 134 nations in the quality of overall infrastructure. The quality of roads
has dropped ten places to 70,air transport infrastructure has dropped to 46th place and port
infrastructure has remained unchanged at 64th place. If we want to make an economic recovery
we must continue to invest in transport infrastructure. The cutbacks in this transport prog-
ramme are unacceptable to everyone.
   A number of significant key Transport 21 projects will be delayed. The target of 2015 for
the delivery of these programmes is in doubt. We know that some of them will not be con-
structed. The Government must ensure that the objectives of increasing our competitiveness
can only be met by an improvement in transport infrastructure.
  I wish to respond to some of the issues raised in today’s debate. The Minister for Health and
Children, Deputy Harney, stated that Deputy Bruton has been making a claim which I know
he never made. I refer to the words of Deputy Bruton when he dismissed absolutely and utterly
the claims by the Minister for Health and Children. It seems the Minister has neither mandate
nor party at this stage and she is lecturing us about our economic policies. The Minister for
Health and Children has repeatedly claimed that Deputy Bruton wants to cut the health budget
by \700 million and she equates this to the closure of three hospitals or the sacking of 10,000
people. However, that is false. What Deputy Bruton said, and Fine Gael repeats, is that we
would not have sanctioned the increases of \224 million in the HSE pay bill, including the
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

  [Deputy Fergus O’Dowd.]
massive bonuses and perks for the underperforming HSE managers. Unlike the Government,
Fine Gael would have delivered savings in the national drugs and pharmacy Bill by allowing
pharmacists to substitute generic drugs for their branded equivalents. Fine Gael would have
set out a concrete and specific plan to cut the number of administrators in the HSE who have
been effectively redundant for four years since the amalgamation of the old health boards. Fine
Gael reforms would not impact on front line services.
  The Minister, Deputy Harney and the rest of the motley crew in Government have visited
on the elderly of this country a most disgraceful and shameful withdrawal of rights they were
given. Some years ago I was walking down a street in New York and noticed a number of
senior citizens in ragged clothes begging on the streets. I thanked God that would not happen
in our country because we value our senior citizens and give them a place of honour in our
society which we will not take from them. That is not the case today under the Minister, Deputy
Harney, Fianna Fail and the Green Party in coalition.
  What price has the Green Party paid for its carbon budget? What price are the elderly
paying? Some 125,000 senior citizens aged over 70 will have their medical cards reviewed. Some
125,000 visits to homes, hospitals or nursing homes will have to be made by community welfare
officers who will ask the sick and elderly what income and property they have and determine
whether they are entitled to the benefit of the medical card, which most of them have had for
at least seven years. That means the youngest of those who received the medical card seven
years ago are aged 77. People in their late 70s, 80s, 90s and, please God, some who have lived
to 100 years of age will be means tested. Many are seriously ill, extremely worried, suffer from
Alzheimer’s or cannot even talk. This is what the Government is doing to them and it is an
appalling, shameful and disgraceful way to act.
  The mark of a just and caring society is how it treats those who are coming into the world
— the young — and those who are leaving it — our elderly who are seriously ill or are,
unfortunately, heading that way, as we all, eventually, will. This is an important milestone in
our society, that the Government is targeting the most vulnerable for these cuts. It is inexcus-
able. The older people who are ringing my office, and those of the Minister, Deputy Harney,
and the Minister of State, Deputy Devins — if the Minister, Deputy Harney, has any staff left
— are saying they will not wear it, they do not want it and that it is unacceptable. The Minister
can say what she likes about the numbers of people, the 15,000 here and 20,000 there, but
every old person is angry and extremely concerned about their future when we should be giving
them the place of honour in our society to which they are entitled. They have paid their dues
and taxes, reared their families, and the Government is robbing them. I do not know how to
describe the Government. It is like Scrooge, taking money from the pockets of the poor elderly
people of our society. It is an unacceptable, disgraceful and shameful situation.
   That leaves us with this budget which takes \2 billion from the pockets of our taxpayers and
the people over 70 who have pensions. It is easy for the Minister of State, Deputy Devins, to
smirk and smile, but those people are sitting in their homes saying they were not paying tax
last week but from 1 January they will pay the 1% levy. The Government is taxing those
incomes again. Elderly people tend to worry a lot. We all know that, and the Minister of State,
Deputy Devins, has a medical background. Elderly people would be very concerned about this
and worry disproportionately. The impact on them will be much more severe than on younger
and more able people. This must be reconsidered.
  One of the points made about this benefit was that it was done in such a way that the medical
doctors put a gun to taxpayers’ heads and charged \600 per medical card for over 70s. A far
better way of tackling this issue would have been to tell the doctors this is not good enough
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

and it is costing too much, demand a reduction and negotiate those fees back down. That would
have been an acceptable starting point. What the Government has done is unacceptable.
   The rhetoric from the Green Party is sad because its proposal contained many good points,
but also many poor elements, with which Deputy Coveney will deal in a moment. I will deal
with the transport issues to which the Minister for the Environment, Heritage and Local
Government, Deputy Gormley, referred. He spoke about what they will do in transport, specifi-
cally the removal of pinch points on the quality bus corridors, integrated ticketing and real
time passenger information at bus stops and mobile telephones. He said: “Most people who
stand at a bus stop know the frustration of not knowing when the bus will come.” Dozens of
buses were on the road between Dublin and Lucan and Celbridge for many years but are not
coming any more. They were run by the private Circle Line. There was a very good system in
place but unfair competition from the taxpayer-subsidised Dublin Bus put Circle Line out
of business.
  Under the Green Minister we had convoys of buses, three Dublin Bus buses in front of a
Circle Line bus, three after it and three waiting at the bus stop, all by virtue of the wealth we
give Dublin Bus to run an inefficient and dominant system. The quotes in the Minister’s office
make it clear that it has abused it dominant position in the marketplace to put out of business
decent and honourable people who ran a very good bus service. It does not matter whether a
Dublin Bus or a Circle Line bus comes as long as a bus comes, but if the Government does
not open the bus market in Dublin to competition, the buses for which people wait will not
be provided because of the Minister for the Environment, Heritage and Local Government,
Deputy Gormley.
  All the big ideas are there. If we have buses on the streets of Dublin we can provide people
with the routes, but the Minister and the Government are prisoners of Dublin Bus and the
unions. They are afraid to open the market, afraid to have competition, and the commuter
suffers most of all. I challenge the Green Party to provide the buses. I challenge it to have the
guts to stand up to Fianna Fail, Dublin Bus and all the vested interests that are stopping people
having a real choice.
  The cuts in transport are severe and serious. Public transport is down 5% and roads are
down 7%. Road safety is a critical issue but by way of thanks for the good work done by the
Road Safety Authority, its budget is being cut by 9%. Regional airports are being cut by \13
million. Rural roads are being cut. It goes on and on. This is a shameful, disgraceful Govern-
ment that has no guts and did not tell the truth when it could have, before the last election
and immediately after it, and did not act when it could have and when it knew it had to during
the summer. The Government has acted too late, tackled the wrong people and focused on
those who are weakest and least able to fight. Even their health is being taken from them. As
was said about former Minister Ernest Blythe in the 1930s, people will remember this budget
for a long time.

  Deputy Simon Coveney: I am glad of this opportunity to speak and I thank my colleague for
a few extra minutes. I want first to make some general comments on the budget. I struggle to
understand the Government’s logic in what it is trying to do in this budget. Surely the primary
objective in a budget in a time of real difficulty and crisis is to try to address the cause of that
crisis. Surely the primary objective in a budget is to try to address the problem which has led
us into this position. Despite the fact that Minister after Minister stands up and makes the
direct link between the credit crunch, the banking crisis, world economic woes and the recession
in Ireland, other European countries which face the same conditions are not in recession and
are certainly not in the kind of debt to which we are signing up this year. We are borrowing
\13 billion to stay afloat this year, for a country that spends just over \50 billion per year on
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

  [Deputy Simon Coveney.]
current expenditure. The Government is far too expensive and we can no longer afford it.
What did the Government do to address that issue? It increased current expenditure by 3.5%
and slashed key capital expenditure that could have ensured future prosperity in Ireland in
terms of driving innovation and competitiveness and stimulating economic activity. The
Government is going to pay for the excess expenditure by taxing people at every turn. Whether
one is a parent putting one’s child on a school bus, a worker parking at one’s place of work,
buying petrol or going to hospital, one is charged at every turn.
  We have heard a lot of nonsense from the Government that this budget is primarily about
protecting the weak, that is, those on low incomes. Can the Government explain how increasing
the VAT rate or introducing a 1% levy on all income, no matter how small, except social
welfare payments, protects people on low incomes and those who are struggling? How does
imposing an air travel tax on families who save up to go on holidays protect families on low
  This is a budget that has no new thinking behind it. It is about a Government bailing itself
out for its irresponsible over-spending on the back of a construction boom that could not last
forever. Where is the new thinking in this so-called radical budget?

  Deputy Michael Creed: It is a patriotic budget.

  Deputy Simon Coveney: The Government built it up for weeks beforehand. It was brought
forward by seven or eight weeks. We were expecting some new initiatives or ideas yesterday
that would give people hope that the Government was doing something definite to create jobs
and slow down the unemployment snowball that is growing by the week. However, none of
that is here. Instead, the Government is damaging economic activity. This budget will reduce
what people spend. They will have less money in their pockets because they are paying more
taxes. The Government is damaging the potential future for many small businesses and is
adding to inflation and the overall cost of living in Ireland.
   How does the Government think our marketplace looks to a foreign company considering
Ireland as a potential place in which to invest and create employment? Does the Government
think Ireland is more attractive in the wake of this budget? I do not think so. Ireland’s success
in the past two decades has been based primarily on competitiveness, a high quality education
system and low tax rates but all of those elements are now being undermined by a budget
which is purely a money-grabbing exercise. Families across the country are being asked to bail
out the Government for its disastrous economic management in the past three years in part-
icular, if not before then.
   I am particularly interested in the carbon budget, of which the Government makes a big
play. It is held up as an example of the green side of Government, about which we have heard
from the Ministers, Deputies John Gormley and Eamon Ryan, today. However, if one com-
pares last year’s carbon budget figures to this year’s figures, one sees immediately that the
numbers do not tally. In both carbon budgets, the figures provided for 2006 are different,
despite the fact that 2006 was a year for which we had hard and fast figures. In areas such as
carbon sinks, which includes, for example, the contribution of forestry to reducing our green-
house gas emissions, the figures do not tally. I seek an explanation from the Government on
that issue.
   What is blatantly obvious from the carbon budget is that the country is going in the wrong
direction, and dramatically so. The projections in last year’s carbon budget indicated that by
the end of 2012 we would have net carbon emissions of just over 65 million tonnes. That figure
is now over 69 million tonnes. The whole point of setting up a carbon budget was to examine
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

directional trends in terms of us meeting our climate change and emissions commitments.
Unfortunately for the Government, the structure it set up is proof that the national climate
change strategy is not working. The Government’s commitment to reducing greenhouse gas
emissions by 3% per year is a joke at the moment.
   The Minister said there has been press coverage to the effect that Ireland’s greenhouse gas
emissions have increased in the past year. Our emissions have increased but the Minister tries
to massage the figures by introducing increases in forestry in Ireland, which do not even count
yet in terms of the targets we face under our Kyoto Protocol commitments and those made to
the European Union. Let us be honest with people. We are failing the climate change challenge
at the moment.
   I agree with much of what the Minister said earlier. He outlined the longer term strategy for
meeting the challenge of reducing our emissions. It is important to say, at this point, that this
is not a voluntary exercise. We are obliged to meet the commitments we make in Brussels and
elsewhere. If we do not meet those commitments, we are fined. In this budget, the Government
has set aside \50 million next year to pay fines for not meeting our emissions targets. That
equates to almost \1 million per week from taxpayers because we are not meeting our targets.
This is not just about a green agenda or something about which only environmentalists should
be concerned. The fact that our climate change strategy is not working is costing every taxpayer
in the country money. This is despite the fact that we supposedly have a green tinge to Govern-
ment, with two key Ministries held by Green Party Deputies.
  I wish to focus on a number of areas to which the carbon budget refers, particularly energy.
I have a lot of time for the vision of the Minister for Communications, Energy and Natural
Resources, Deputy Eamon Ryan, in terms of where he wants to take Ireland from an energy
point of view. I welcome the fact that the Government has made a new commitment to 40%
of our energy coming from renewable resources by 2020. It will be a tough task to achieve, but
I welcome the ambitious thinking. The ESB is providing real leadership in this area, which
should be acknowledged.
   However, progress in the energy sector alone will not enable us to meet our international
commitments because this is the traded sector in the European Union in terms of emissions
targets. That sector has nothing to do with the Government vis-a-vis the commitments it makes.
Post 2012, the large energy generators will have to purchase carbon allowances, which is what
will drive their change in behaviour. In that context, we do not need to worry about the energy
sector, apart from our overall responsibility to encourage change. That sector is not relevant
in terms of meeting our commitments and avoiding fines. Even if 80% of our energy was
generated from renewable sources, that would not solve our fundamental problems. It is the
non-traded sector for which the Government has responsibility. Transport, residential, small
industry and agriculture are the major areas where we need big ideas and those ideas are not
coming forward. Let us not kid ourselves that the big idea from Government, led by the Mini-
ster for Communications, Marine and Natural Resources, Deputy Eamon Ryan, in terms of
building turbines onshore and off-shore and creating energy and emissions efficient generation
solves our climate change commitment problem although it is a good thing. We need to hammer
this home and make it much clearer in our carbon budget. The carbon budget is about measur-
ing the Government’s performance as well as the country’s performance in terms of emissions.
We need far greater focus on the non-traded sector.
  Transport is a major problem area, but it is a big area of opportunity if we had really
ambitious thinking from Government on it. A target was set in the carbon budget this year
that by 2020 10% of our road fleet would be made up of electric vehicles. Will the Government
examine what other countries are doing? A target of 10% by 2020 is miserable in terms of
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

  [Deputy Simon Coveney.]
making the switch from petrol, diesel and biodiesel run vehicles to electric vehicles. Let us get
serious about promoting electric vehicles in Ireland.
   Look at what they are doing in Israel. They are trying to switch an entire transportation
system from carbon based fuels to electricity. They are doing it for political reasons as well as
economic reasons because they do not want to rely on oil. Israel is not the only country doing
this. Denmark is also doing it. Because Ireland is an island, it is an ideal place for this. For the
first time, companies are offering viable solutions. Let us embrace these ideas and technology
and make it happen. Whether it is a 5% or a 7% biofuel mix will not make the dramatic change
we need in the transport sector to meet the commitments we have made. We need far more
radical thinking in terms of our responsibilities, merging the transport and energy areas.
  The energy by-product, if one wants to call it that, of a transport sector heavily reliant on
electric vehicles is that if everyone in the entire country plugs a car in at 12 o’clock at night to
recharge it we will have significant demand for electricity at 4 o’clock in the morning which we
do not have at present. The big problem for energy generators in Ireland at present is the huge
spike early in the morning when people get up and have showers. It then dies down, picks up
again at lunch time, dies down and picks up again when people go home after work.
   It is difficult to integrate inconsistent wind energy, and wind energy is inconsistent because
it only blows approximately 40% of the time, often when we do not need the power. We need
to find a way of storing electricity we can use later in the day or in the evening. One way to
do so is to link transportation to electricity so people plug their vehicles in at night, in the
afternoon or late in the morning when there is not a high demand for electricity. This would
balance the curve of electricity demand which would be of major benefit to EirGrid which has
responsibility to manage the electricity grid and to everybody proposing to build a wind farm,
a tidal turbine or wave bob. Let us have more ambitious thinking which is what we need but
which is not at all evident in the carbon budget or in yesterday’s budget.
   I agree with a great deal of what my ministerial counterpart has to say on energy. However,
I am hugely critical of his and his Government’s performance in terms of the IT sector. How
many times have we heard Ministers state that they want to create a knowledge economy
in Ireland on the back of a world class information technology infrastructure? What is the
Government’s response? A 25% cut in the money it plans to spend on information and
communications technology programmes. This is a reduction from \53 million to \40 million.
The Minister expects us to take him seriously when he states he will put high speed broadband
into schools throughout the country. He has no credibility on this issue.
  We are cutting back in the most crucial infrastructural area for IT and knowledge economy
development in Ireland in a dramatic way in this budget. This is a major mistake in terms of
the type of jobs we want to create over the next one, two or five years. We will regret it. It
reflects the lack of priority, broad thinking and understanding of what the economy needs
to reignite.

 Minister for Social and Family Affairs (Deputy Mary Hanafin): I wish to share time with
Deputy Brendan Smith.
  Social welfare has been prioritised in this budget because next year total funding for the
Department of Social and Family Affairs will be \19.6 billion. This represents an increase of
\2.6 billion or 15.5% over the Estimates allocation for 2008. More than 1.7 million people and
their dependents will benefit from this expenditure, including 440,000 pensioners, 345,000 ill
and disabled people, more than 80,000 carers, 30,000 low income working families availing of
the family income supplement and more than 580,000 families that receive child benefit
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

  The budget includes provision for an average live register figure of, unfortunately, 290,000
next year. This compares with an average of just under 210,000 in the nine months to the end
of September this year and an expected average of 220,000 for 2008 as a whole. The Govern-
ment is doing everything it can to keep unemployment as low as possible but it is prudent in
the current economic environment to set aside funding in case it continues to rise.
  Providing for the expected increase in the live register alone accounts for \1.25 billion of the
planned increase in spending next year. In addition to this, provision has been made for \515
million worth of improvements in social welfare rates and qualifying conditions. At a time
when it is essential that public expenditure be strictly controlled in the national interest, this
increased provision for social welfare is an unambiguous statement of the Government’s intent
to protect the vulnerable and less well-off in society.

  Deputy Michael Creed: It is an ambition of defeat.

  Deputy Mary Hanafin: Unfortunately, it has been necessary to take some steps to reduce
expenditure but these have been kept to the absolute minimum and applied in a careful

  Deputy Olwyn Enright: That is not what was stated in June.

  Deputy Mary Hanafin: As Deputies will appreciate, there was no easy way to achieve the
required savings. Consideration had to be given to a wide range of changes and very difficult
decisions had to be made. Neither I nor the Government have taken these decisions lightly. In
total, the new expenditure control measures contained in the social welfare budget will amount
to net savings——

  Deputy Michael Creed: Cutbacks.

  Deputy Mary Hanafin: ——of \124.9 million next year when compensatory measures are
taken into account. Of this , \72.7 million is accounted for by changes to the social insurance
  As Members know, Ireland’s social welfare system is based on two quite different types of
entitlement, a social insurance system for people who have paid sufficient PRSI contributions
and a social assistance system for people without adequate contributions who have little or no
household means of their own.
  Social insurance is intended both to enable people to insure themselves against adverse life
events such as illness or unemployment and to provide for their State pensions and other
benefits, through contributions to the national social insurance fund. Social insurance benefits
are not means-tested. Instead, entitlement depends on having paid the required number of
PRSI contributions relevant to the benefit one wishes to claim.
   For the past 11 years, the social insurance fund has been in surplus, with more than sufficient
income to the fund to cover the payments being made from it each year, without the State
having to provide a subsidy. However, that is changing. As a result of further increases in the
live register, expenditure is expected to exceed income to the fund by over \200 million this
year and approximately \900 million next year. Although these current deficits can be met
from the accumulated surplus, it looks likely that the Exchequer may yet again have to subsidise
expenditure from the social insurance fund within a few several years. In that context, it is
appropriate to look at some of the instances where people with a very limited or distant contri-
bution record have been able to qualify for very significant benefits, regardless of their house-
hold income.
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

  [Deputy Mary Hanafin.]

  Currently, people who have paid just 52 contributions in total can qualify for jobseeker’s
benefit, illness benefit and health and safety benefit. This means, for example, that migrants or
young workers who have only worked here for one year are entitled to claim jobseeker’s
payments for 12 months, without having to satisfy a means test. This will change from next
January, when the number of required paid contributions will be doubled to 104 contributions
for new claimants.

  Deputy Olwyn Enright: Why has the Minister added migrants to that?

  Deputy Mary Hanafin: A further anomaly that exists at present is that some people, who
were previously working part-time, can receive a higher rate of payment from these schemes
than what they were actually earning while at work. Again, this is considered to be inap-
propriate and a disincentive to employment. Therefore, from next January, this situation will
be addressed by increasing the earnings thresholds which apply to the reduced or graduated
rates of payment from \150 to \300 per week.

  Deputy Michael Creed: She is playing the race card.

  Deputy Olwyn Enright: That is the Kevin Myers solution.

   Deputy Mary Hanafin: At present, it is necessary to have made 13 paid contributions in the
relevant tax year to qualify for illness benefit. However, this condition does not exist for job-
seeker’s benefit, with the result that people who may not have paid PRSI contributions in the
past number of years can qualify. Again, it is considered that this position does not adequately
reflect the contribution-based rationale for social insurance. Therefore, from next January, new
claimants for jobseeker’s benefit will be required to satisfy the same conditions as those on
illness benefit and must have paid 13 contributions in the relevant tax year.
   The other two changes being made to jobseeker’s benefit relate to the duration of the pay-
ment. At present, people who have 260 or more paid social insurance contributions can receive
jobseeker’s benefit for up to 15 months. As of today, this is being limited to 12 months for
current claimants with less than six months duration on the scheme, as well as for all new

  Deputy Olwyn Enright: The Minister means cuts.

  Deputy Mary Hanafin: Where the claimant has less than 260 paid contributions, the
maximum duration of jobseeker’s benefit will be nine months, instead of 12 months, if the
claimant currently has been in receipt of benefit for less than three months and in respect of
all new claimants.
  New claimants for jobseeker’s benefit will in future have to have paid a total of at least 104
contributions to the social insurance fund, with at least 13 of these paid in the relevant tax
year. The rate of payment will more closely reflect what the individual was earning prior to
becoming unemployed and the duration of the payment will be either 12 or nine months
depending on the number of social insurance contributions they have made in the past. Taken
together, these changes to jobseeker’s, illness and health and safety benefits are expected to
generate \72.7 million in savings next year and \119 million a year from 2010 on.
  Those who will be affected by these changes will be able to claim jobseeker’s allowance or
supplementary welfare allowance instead if they have limited means.

  Deputy Olwyn Enright: Not if they are living at home with their parents.
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

  Deputy Mary Hanafin: The maximum rate of these two schemes is paid at the same rate as
jobseeker’s benefit.
   The final social insurance change involves a new limit on the duration of illness benefit
payments. Illness benefit was intended to provide income replacement for insured persons
during short spells of incapacity or illness, while other payments are available to people who
cannot work long term because of a disability or a medical condition. However, there is no
limit on the amount of time for which illness benefit can be paid to people who have more
than 260 social insurance contributions. Over 28,000 persons have been receiving the payment
for more than two years. As a forthcoming OECD review notes,“paying sickness benefit with-
out time limitation is very unusual across the OECD, for good reasons”. The report points out
that there is a great risk that people in such circumstances will never return to the labour
  Accordingly, the Government has decided to confine entitlement to illness benefit to two
years’, 624 days, duration for claims arising after 5 January 2009. Persons currently in receipt
of illness benefit will not be affected by the change. Some 8,500 persons on illness benefit pass
the threshold of two years’ duration on illness benefit each year and such persons are likely to
be affected by the proposed ceiling on duration.
  Approximately two thirds of these will satisfy the medical criteria to access either invalidity
pension or, subject to a means test, disability allowance. Medical criteria for both of these
schemes require certification that the condition is likely to last for a further 12 months. This
measure will not result in any savings in 2009 or 2010, but should save up to \101 million in a
full year after the two-year rule has fully come into effect, which will not be for a number
of years.
  Changes will also be made to the disability allowance. Currently this can be paid from age
16 to young people with a disability and is worth approximately \200 per week. Domiciliary
care allowance is a payment to the parents of children who have a severe disability requiring
continuous care and attention which is substantially in excess of that normally required by a
child of the same age. It is worth approximately \300 per month.
  The National Federation of Voluntary Bodies is an umbrella organisation for 63 voluntary
agencies who provide direct services to people with intellectual disabilities. Its members
account for in excess of 85% of the country’s direct service provision to people with intellectual
disabilities. Its submission to the Department’s review of the disability allowance argued:

    At present the age for receipt of disability allowance is 16 years. We deem this to be too
  young. This does not give an incentive for a child to pursue work or education options.
  Subsequently a child may fall into the dependency trap too early. Instead parents should
  receive the domiciliary care allowance for the child until they are 18 years old.

The Government has decided to implement this change. The age of eligibility for entitlement
to disability allowance is being increased from 16 years to 18 years for new claimants. This
change will not affect existing 16 and 17 year olds on disability allowance.

  Deputy Olwyn Enright: If the Minister feels so strongly about it, why not?

  Deputy Mary Hanafin: As an alleviating measure, the age for entitlement to the domiciliary
care allowance is being increased from 16 years to 18 years. It is estimated that a weekly
average of 539 persons will be affected by this measure in 2009 and 2,115 in a full year. These
changes are expected to save \5.6 million in 2009 and \16.6 million a year from 2010.
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

  [Deputy Mary Hanafin.]

  The changes being made this year to illness benefit and disability allowance are intended as
only the first steps in the modernisation of the illness and disability schemes. A comprehensive
approach will be developed when the reports of the current review of the disability allowance
scheme and the OECD review are finalised and the Department has had the opportunity to
assess them fully.
   The final expenditure control measure relates to the rent and mortgage interest supplements.
All recipients of these payments are expected to make a personal contribution towards their
accommodation costs from their own resources. The minimum level of this contribution is
currently set at \13 per week. This rate has not been increased since January 2004, despite the
fact the lowest rate of social welfare payment has risen by nearly \70 per week since then. It
is also significantly less than the minimum rent paid by local authority tenants which, for
example, is \24.87 in Dublin city and \26 in County Limerick.
  As of 1 January 2009, the minimum personal contribution to rent and mortgage interest
supplement is being increased by \5 to \18 per week. With some 72,000 people in receipt of
rent and mortgage interest supplements, this measure is expected to generate \19 million per
annum from 2009 onwards.

  Deputy Olwyn Enright: The Minister would be better off taking on the developers.

  Deputy Mary Hanafin: Yesterday, the Minister for Finance announced the Government
decided that from now on child benefit will no longer be paid in respect of those who are 18
years old. At that age they are effectively treated as adults in most respects. This change will
be phased in gradually. A half payment will be made in respect of existing and future qualifying
children from January 2009. From January 2010, the payment will cease from the 18th birthday.
  Special alleviating measures are being introduced for young people in social welfare depen-
dent and low-income families, with a special increase of \15 per week in the qualified child
payment for those aged 18 years. It is expected that some 10,000 young people will benefit
from this measure. In addition, the back to school clothing and footwear allowance will be
increased by \215 to \520 per annum for eligible 18 year olds. Recipients of family income
supplement will receive additional payments of up to \15 per week for each dependant aged
18 years where they are not otherwise being compensated. These transitional measures will
cease in January 2011. The net savings from this change to child benefit entitlements is expected
to be \27.6 million in 2009, \67.2 million in 2010 and \79 million per annum from 2011 onwards.
  Even in these difficult economic times, the Government has prioritised delivering real
increases in social welfare payments. Some Opposition spokespersons have referred to the fact
that the 2009 social welfare increases are below this year’s inflation rate. That is not the point.

  Deputy Olwyn Enright: That is the point.

  Deputy Michael Creed: What is the point?

  Deputy Mary Hanafin: The 2008 social welfare increases far exceeded the increase in the
consumer price index in the current year. As the Minister for Finance announced yesterday,
the projected rate of inflation for 2009 is 2.5%.

  Deputy Olwyn Enright: He did not add in other factors that might influence that figure.

  Deputy Olivia Mitchell: That is just a trajectory figure.
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

  Deputy Mary Hanafin: The budget provides for increases of between 3% and 3.8% in the
basic payment rates next year. These increases are also in line with the wage rises agreed by
the social partners in the second phase of the national pay agreement.
  The maximum personal rates of payment for the State contributory and non-contributory
pensions and State pension transition are being increased by \7 per week from the start of
January 2009. State pensioners will also receive an extra \6.30 per week for a qualified adult
dependant such as spouse aged over 66 years and an extra \4.70 per week for contributory
qualified adults under 66 years.
   The price of fuel is an issue of major concern for many people, but especially the elderly and
the ill. I am pleased to announce the value of the fuel allowance is being increased by \2 to
\20 per week, an 11% increase, with effect from January. The duration of the fuel season is
also being extended — which is what many people asked for — by another two weeks from
April 2009, bringing it to 32 weeks in total.

  Deputy Olwyn Enright: We asked for more than that.

  Deputy Mary Hanafin: These improvements to the fuel scheme will cost almost \30 million
extra in 2009 and will benefit nearly 300,000 households.

  Deputy Olwyn Enright: It is going out the window.

   Deputy Mary Hanafin: The maximum personal rate of payment for all working age schemes
is being increased by \6.50 per week with effect from the first week of January 2009, with
proportionate increases applying to people on reduced rates. The rates of qualified adult pay-
ments are also being increased on all schemes by \4.30 except for the invalidity pension scheme
where a \4.60 increase will apply.
  Social welfare-dependent parents currently receive an extra \24 per week for each child on
top of their basic social welfare payments, through what is termed the “qualified child increase”.
This is being increased by \2 to \26, or 8.3%, per child with effect from January 2009. In the
case of qualifying children of 18 years of age, the total rate will come to \41 per week, including
the special payment in lieu of child benefit.

  Deputy Olwyn Enright: The Minister took the allowance from them.

  Deputy Mary Hanafin: Improvements are also being made to the family income supplement,
which is paid to low income working families. Income limits for the FIS are being increased by
\10 per week in respect of each child, giving an average extra payment of \6 per child per week.
  The income thresholds for entitlement to back-to-school clothing and footwear allowance
are also being increased to enable 18,000 more families to benefit from the scheme. These
increases are in addition to the special measures already mentioned for 18 year old children.
In addition to these improvements in social welfare schemes, the budget also provides an
extra \500,000 for the Family Support Agency to support programmes to promote positive
parenting skills.
  I now want to address the future of the Combat Poverty Agency and the Money Advice and
Budgeting Service. A review of the Combat Poverty Agency was undertaken on foot of a
Government decision on 6 June 2007. The purpose of the review was to examine the role of the
agency in light of the emergence, since 1986, of comprehensive strategies and new institutional
arrangements to promote social inclusion. These include the Cabinet committee on social
inclusion, the Office for Social Inclusion and the voluntary pillar in social partnership.
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

  [Deputy Mary Hanafin.]

  Having considered the review report, the Government has decided to integrate the Combat
Poverty Agency with the Office for Social Inclusion. I do not intend that the Combat Poverty
Agency will simply be absorbed into the Office for Social Inclusion in its existing form. Rather,
a new strengthened division will be created, which will make the best use of the considerable
experience and expertise of the staff of both existing bodies and will seek to address the weak-
nesses identified by the review in relation to both.

  Deputy Olwyn Enright: Where will that take it then?

   Deputy Mary Hanafin: This new division can provide a stronger voice for those affected by
poverty and social inclusion issues. I am conscious of the concerns about the need for indepen-
dent scrutiny of public policy that have been expressed by some interest groups. I agree that
               independent critique is very important and this move is not intended to reduce
6 o’clock      the scope for such work. As the review report notes, the function of independent
               reporting on poverty is no longer as dependent on the Combat Poverty Agency
as it was in earlier years. This is due, for example, to the emergence of other independent data
sources, such as the statistics on poverty reported by the CSO, and independent analyses by
bodies such as the ESRI and NESC, and on the international front by the EU and OECD.
  Ireland is well served by the social partners and a wide range of NGOs and other groups
who have a strong voice in public debate about poverty and related issues. I intend to prioritise
putting in place procedures to ensure that the views of these and other stakeholders, including
people experiencing poverty, continue to be available to Government in developing and moni-
toring the social inclusion strategies. The Department is currently finalising proposals as to
how this might be achieved.
   Another body the Government examined as part of the review of State agencies was the
Money Advice and Budgeting Service. MABS staff provide a highly valued service to people
who are over-indebted and need help and advice in coping with debt problems. However, it has
been recognised for some time that the service needs a proper legislative basis and structure. It
has been decided that this can best be achieved by placing MABS with the Citizens Information
Board. The MABS and citizens information centres complement each other as both are
involved in providing information, advice and advocacy services to the public. In addition, the
CIB has a long association with the MABS at both national and local level and was involved
in establishing some of the original MABS pilot projects. I stress that there will be no change
in the status of the 53 independent MABS companies, nor in the employment status of their
240 employees.
  These are the main elements of the financial and other changes incorporated in the social
and family affairs part of budget 2009. With extra funding of \2.6 billion next year, a range of
improvements will be made in social welfare schemes, including \7 extra per week for State
pensioners; \6.50 extra per week for welfare recipients of working age, such as jobseekers and
those on illness benefit; an extra \2 per week on the fuel allowance, with payment also being
made for an additional two weeks; increases in child-related payments to those dependent on
social welfare and improvements in the family income supplement for low income working
families; and 18,000 more families becoming eligible for the back-to-school clothing and foot-
wear allowance.
  To fund these improvements along with making payments to increasing numbers of people
on the live register, it has been necessary to make savings in some areas.

  Deputy Olwyn Enright: That is not what the Minister said a few months ago.
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

  Deputy Mary Hanafin: However, we have kept these expenditure control measures to an
absolute minimum. I have confidence that, given the circumstances, we have done our best to
protect those on social welfare who are most in need.

   Minister for Agriculture, Fisheries and Food (Deputy Brendan Smith): In preparing the 2009
Estimates for the Department of Agriculture, Fisheries and Food, my approach has been to
focus available resources on measures that allow us to maintain and grow the productive capa-
city of the agri-food sector. That involved making choices, some of them difficult, but the
choices I have made will facilitate the continued strategic development of the agri-food sector.
   Notwithstanding the current economic difficulties, the total expenditure by the Department
in 2009, in support of the agriculture, fisheries, food and forestry sectors will be more than \3.2
billion. This high level of investment reflects my commitment and that of the Government to
the bio-sector and our recognition of it as one of the most important indigenous manufacturing
elements in our economy, both from an employment point of view and as a major contributor
to regional development.
  In addition to the significant amounts of money that are continuing to be invested in agri-
culture by the Government in 2009, I am particularly pleased that the Minister for Finance has
recognised the value of several tax reliefs to the sector and that he has renewed these measures,
notwithstanding the pressures on him. The renewal of these measures is further evidence of
the Government’s commitment to the development of a competitive agri-food sector at a time
when it can play a pivotal role in helping to address global food security concerns.
   It is perhaps ironic that at this time of global economic downturn, the prospects for agricul-
tural commodities on world markets are good. Currently, prices for a wide range of commodi-
ties, particularly dairy and some cereals, are higher than they have been for many years and
there is general agreement that in the medium term, at least, prices are unlikely to return to
their historically low levels.

  Deputy Michael Creed: Try telling that to dairy farmers.

   Deputy Brendan Smith: As Ireland is a major food producing and exporting economy, this
is good news for the agriculture and food sector and presents us with opportunities into the
future. It is precisely for this reason that I have targeted my Department’s resources in 2009 at
the most productive elements of the sector to ensure that it continues to prosper and continues
towards achievement of its full potential.
   The Department operates a wide range of schemes and services, all of which came under
scrutiny in the preparation of next year’s Estimates. I undertook a thorough review of all such
schemes before choosing those for which I could prioritise funding. The Department’s single
biggest and, perhaps, flagship scheme is the Rural Environmental Protection Scheme, REPS,
which has some 60,000 participants. I place a particular value on this scheme that meets
environmental imperatives and consumer demands. Accordingly, I decided to maintain the
scheme in full and have provided additional funding that brings next year’s expenditure to \355
million, an increase of 7%. Between 2000 and 2009, the Department will have invested \2.25
billion in funding to REPS participants. This additional funding ensures full payment to those
already contracted under both REPS 2 and 3, who opt to see out their existing contracts, as
well as those new applicants to REPS 4, who undertake new five-year commitments, and those
transferring from REPS 2 and 3. REPS 4 payments include a 17% increase in payment rates.
  I have also ensured that commitment entered into in partnership to spend \250 million on a
suckler welfare scheme is fully honoured. Such was the success of the scheme that the levels
of participation exceeded all expectation. This year’s level of participation, at a premium rate
            Financial Resolution No. 15:   15 October 2008.          (General) Resumed

  [Deputy Brendan Smith.]
of \80 per head, will cost the Department \77 million. It will be necessary to correct the
premium rate over the remaining four years of the scheme, but I am committed to the payment
of the remaining \173 million over the remaining life of the scheme. The premium rate in the
remaining years will depend on the participation rate and at current levels, the premium may
have to be reduced by up to half. In respect of 2009, all payments that would ordinarily fall to
be paid in late November 2009 will be delayed slightly until early January 2010.
   Forestry is a particularly important sector, not least in providing important income to farmers
and employment in rural areas as well as contributing significantly to meeting the challenge of
climate change. The 2009 Estimate provides \127.7 million for the sector. While, more than
\80 million will be directed to payments of premia, mostly to farmers, there will also be gen-
erous support for planting and support schemes. The level of funding provided should allow
planting to be maintained close to this year’s level.
  I have also restated my commitment and that of the Government to support the Irish fishing
sector through the provision of \30 million, which does not include the funding provided to
Bord lascaigh Mhara, with particular prioritised investment in fish processing, aquaculture
development and fishery harbours.
  Unfortunately, my commitment to the schemes to which I have referred must come at some
price and I have, therefore, reluctantly decided to reduce expenditure under the scheme of
area-based compensatory payments. The provision for that scheme next year is being reduced
to \220.4 million. However, this reduction will be targeted through reducing the maximum
hectarage limit on which payments are to be made from 45 to 34 hectares and through a modest
increase in the stocking density requirement, a requirement which has been advocated by some
farm representatives for some time. Based simply on the reduction in the maximum hectarage
to 34 hectares, some 67,000 of the 102,000 participants will experience no reduction in their
payments. The modest increase in the stocking density requirement will have an impact on a
further small number of scheme participants.
  I have also chosen to temporarily suspend entry to both the early retirement and young
farmer installation schemes with immediate effect.

  Deputy Michael Creed: Shameful.

  Deputy Brendan Smith: While there have been a healthy number of applications under the
installation scheme this year, applications for the early retirement scheme are relatively modest.
However, it is worth making the point that all current participants in the scheme will be paid
and applications received to date will be processed and next year almost \57 million is being
provided to meet current commitments.
  In his budget speech yesterday, the Minister for Finance specifically referred to the renewal
of several tax reliefs of benefit to the farming sector. Several reliefs specifically targeted at new
entrants are particularly welcome, especially given the notable increase in the number of young
people entering agricultural college over the past two years and renewed optimism in the sector.
Of particular value is the extension of young trained farmers’ stamp duty relief for four years
until the end of 2012. This was a significant component of Macra na Feirme’s pre-budget
submission and is aimed at bringing about a level of stability and security to families planning
and organising early farm transfers. This relief is estimated to be worth \53 million in a full
  The top rate of stamp duty on agricultural land transactions has been reduced from 9% to
6% on agricultural land transactions above \80,000. This should help reduce the purchase cost
for buyers and make transactions more affordable.
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

  Also of benefit to young farmers is the renewal of the 100% rate of stock relief which is
useful for young farmers building up the value of their herds. The general 25% rate of stock
relief for all farmers was also renewed. Both these reliefs were renewed for a period of two
years until 31 December 2010 at an estimated cost of \2 million per year.
  Stamp duty relief for farm consolidation is renewed for a two-year period until the end of
June 2011. The relief is aimed at farmers reducing their farm fragmentation through the pur-
chase and sale of parcels of land in accordance with the appropriate guidelines. The accelerated
rate of capital allowances has also been renewed for a further two years allowing a write-off
period of three years and a floating allowance of the lesser of 50% of qualifying expenditure
or \31,750 in any one year. This measure is estimated to be worth \10 million in a full year.
This broad range of budget measures are aimed at supporting improvements in farm structures
by encouraging new entrants, farm consolidation and mobility. Combined, these cost-efficient
measures are estimated to be worth more than \65 million in total in a full year.
   There has been much comment over the past 24 hours on public service reform, much of it
uninformed and incorrect. The public service is not immune from the decisions that have to be
taken at this time. The grants-in-aid to the State bodies under the Department’s aegis, namely
Teagasc, Bord Bia, Bord Iascaigh Mhara, Marine Institute and the SFPA, are being reduced
to take account, in particular, of the need to achieve payroll and other efficiency savings. These
savings must be seen against what was a significant increase in funding to these organisations
in recent years. Next year, I will provide \235 million to them to support agricultural, fisheries,
food and forestry activities and I will ask them to prioritise their activities in the light of the
current budgetary position and having regard to overall policy for the sector.
  In addition, the salaries provision for my Department will require a further fall in staff
numbers of 150 by the end of next year. This is in addition to a reduction of almost 500 in
recent years and my Department is engaged actively in a programme of reviews aimed at
improving the efficiency and effectiveness with which we provide such a wide range of services
to all our stakeholders. It is no more than the taxpayer deserves.
  The agri-food sector is of central importance to our economy. Success will be achieved by
reliance on quality, innovative and sustainable food production. We have many natural advan-
tages in food production and have developed a sophisticated food industry. The opportunities
now emerging for us as a food producing country are there to be grasped. I assure the House
that, for its part, the Government realises the potential of the sector.
   Notwithstanding the severe budgetary pressures, through Exchequer and EU funding, the
Department of Agriculture, Fisheries and Food will invest \3.2 billion in support of the agri-
culture, fisheries, food and forestry sectors next year. In addition, the Minister for Finance has
also committed to the renewal of tax relief worth \65 million for a further period of two years
in most cases and four years in one case to which I earlier referred which was made at the
request of Macra na Feirme. I am also particularly pleased that the Minister has confirmed
that the possibility of further measures specifically targeted at young farmers will be considered
in the context of the forthcoming Finance Bill.
  Despite suggestions to the contrary, the Government’s level of commitment to and invest-
ment in agriculture is significant and recognises the role the sector has to play and the enormous
contribution it makes to the Irish economy. My approach is targeted at the specific intention
of protecting the sector’s most productive elements and ensuring that it continues to prosper.
That approach requires choices to be made and a balance to be struck. I am satisfied that the
choices I have made are the right ones and in the best interests of the Irish agri-food sector at
this time.
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

  Deputy Olivia Mitchell: I welcome the opportunity to speak on this budget. I speak for most
people in the country, certainly for this side of the House, when I say there was readiness to
take some bad news and hardship if we felt it was to some purpose. What has been most
disappointing is that such will not be the case. We, and most commentators expect us to be
back here with cuts at least as bad this time next year, if not sooner.
   The truth is what was needed was not done. We cut capital spending and borrowed to
continue with current spending. Some \4.7 billion is to be borrowed, and God knows to what
that will grow as the year progresses. Far from correcting a nose-dive in the economy, this can
only make matters worse. Where there was spending, there was no attempt to produce long-
term reform to deal with the problems so that we could be in a position to capitalise on any
later upturn in the global economy.
   FAS is a case in point. Never will it be more important to be able to up-skill and retrain our
workforce, and yet there is a budget of almost \1 billion, largely money contributed by the
private sector, that is completely unfocused, hardly relevant and inefficiently spent, and there
has been no attempt to reform that organisation.
  The investment in infrastructure, particularly in public transport, has been tragically cut
again. That means Transport 21 is out the door, probably for another generation or maybe
even two. The history of this Government has been a failure of planning and of delivery. There
has been no mention of metro. I heard last night that it will remain in the planning stage. It
has been in planning for ten years. It will probably be another ten, maybe 20, years before we
hear any more about it. The result of all this is that people are even more dependent on their
cars, and the Government’s solution is to introduce a car parking tax. One could understand
this tax if it would make people use public transport, but the reality is it will end up only as a
tax on work.
  The Government failed to make difficult decisions. It made things difficult for people, but
the difficult decisions which only the Government can make were not made.
  I will speak about my area of my responsibility, arts, sports and tourism, but I am conscious
I must say something about the sick, the disabled and the elderly, the easy targets who undoubt-
edly will be the really big suffers as a result of this budget. These are easy targets because they
are not a cohesive group. In any battle for scarce resources they will be the ones the Govern-
ment can pick off one by one, and it could not resist the opportunity to do so.
   Many of my colleagues have spoken eloquently about the removal of entitlement to medical
cards from the over 70s. I do not want to go into it, except to state it is the most mean-minded
and damaging economy I have ever heard of a government attempting to introduce. It was
despicable to hear the Minister for Health and Children try to defend it on the grounds that it
was costing a great deal of money, with the money going to doctors. The reason for that is the
Government did a bad deal with the doctors. The Government announced the measure before
it reached a deal with the doctors, and taxpayers ended up paying more than they should. The
Government’s solution is to ask old and sick people, who have worked all their lives, contrib-
uted to the economy and made the Celtic tiger, to pay for the Government’s mistake by the
withdrawal of their medical cards.
  Thousands of middle income families in my constituency and throughout the country are
being targeted in the budget, specifically in the area of health. One measure which has not
received a great deal of attention, except in respect of nursing homes, is the decision to reduce
tax relief from the marginal rate to the standard rate for medical expenses. This measure is
aimed specifically at families who have always paid their own way. They pay for their general
practitioner, medicines — for which they will now pay \100 per month — health insurance, the
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

dentist, hospital tests, scans, physiotherapists and every other medical expense. Overnight, the
cost of medicine for those families has increased by 20%.
  When there are children in a family it is impossible to avoid medical expenses. For most
families there are sometimes exceptional medical expenses in respect of at least one member
of the family. A number of families contacted me about this measure today, particularly families
whose children require orthodontic treatment. For them, the cost of that treatment has
increased by 20%. Everybody knows that State-provided orthodontic treatment scarcely exists.
The treatment is hugely expensive so a 20% increase will run to thousands of euro. For many
families it will no longer be an option. I am not talking about orthodontic treatment for cos-
metic purposes but treatment that is essential for psychological or medical reasons. That will
no longer be an option. This is one of the measures that has slipped under the carpet but it
will emerge as the months pass.
   The Taoiseach spoke about the relief for medical expenses this morning as if it was only
relevant to nursing homes. All medical expenses will be affected for middle income earners
who do not have a medical card. Everybody will be affected. Indeed, the Taoiseach suggested
that when the fair deal is introduced it will not be relevant because it will not be required by
people going into nursing homes. Nothing could be further from the truth. The reality is that
if one has been prudent and saved for one’s old age, if one has savings in the bank or under
the mattress or if one has dividends, shares or a painting on the wall, everything must be spent
before one will even become eligible for the fair deal. The fair deal is only relevant to some
people, and it is clear that it will not be fair to everybody.
   These are the hidden costs of the budget. The Ministers glibly spoke last night about a
percentage here and a percentage there but each of these percentages is bitterly felt by families.
They will be bitterly felt over the coming months, particularly when added to other taxes,
charges and cuts. I warn the Government, and I hope it acts before it happens, that people will
die as a result of this. They will forgo medicine and visiting the doctor. It will not be a saving
in the long run.
   I congratulate the Minister for Arts, Sport and Tourism, Deputy Martin Cullen. He dis-
tinguished himself as the only Minister who saw a reduction in every budget line for his Depart-
ment. He is not long in the Department but he has become extremely creative. His press
statement yesterday would warrant a prize for creativity. He managed to be the only Minister
who compared his Department’s allocations for 2009 to those for 2000 to show that somehow
there was an increase when, in fact, there was a decrease in each of his Department’s budget
  Yes, these are hard times and we understood there would be a reduction in spending, but
why an all-out assault on the tourism industry? This is incomprehensible. We will require this
industry to provide growth in employment and income in the future. It is a service industry.
We will not see growth in many other industries such as manufacturing and so forth, which are
dying industries to an extent. The service industry is where we must generate growth and
foreign exchange. However, a departure tax is purely a revenue raising tax. It has zero policy
content. It will not just apply to Irish people leaving the country but people who come to this
country, who will be charged when they leave. We should be incentivising people to come to
this country, not picking their pockets as they leave.
  This will also impact on the aviation sector, which is already a marginal industry with oper-
ators barely keeping their heads above water. Ryanair has threatened to pull out of Shannon
Airport because its fares will effectively double as a result of this charge. It is the whammy
Aer Lingus certainly did not need. The Government is trying to persuade people to vote for
the EU and says the Union is based on the fundamental tenet of free movement of people, but
             Financial Resolution No. 15:   15 October 2008.          (General) Resumed

  [Deputy Olivia Mitchell.]
I do not know if this tax is legal within the EU. When one combines transport costs, VAT,
holiday home taxes and 50 cent on a bottle of wine with reduced marketing, it is hard to believe
the Government has an appreciation of the importance of the tourism industry. Watch the
holiday home tax. This year it is \200, next year it will be \400 and, mark my words, the year
after it will be on all homes.
   The Minister tried to tell us there is a minuscule reduction in funding for the Arts Council,
scarcely 1%. In fact, the reduction is 12%. Jobs will be lost. Jobs in the arts are marginal
anyway and they will go. This will impact not only on the indigenous industry, but also on
tourism as festivals and performances are hit. Sport is affected in every budget line and crucial
funding for the Sports Council has also been savaged. In the area of capital spending, all the
investment in the cultural institutions, which are already on the bread line, has been cut to
ribbons. Many of these institutions are in such a condition that we will be lucky if they do not
burn to the ground in the next couple of years.
  Funding for the national sports campus has been reduced by one third, despite the massive
expansion that was announced by successive Ministers. That appears to have evaporated into
the ether, along with the former Taoiseach whose legacy and monument it was to be. All one
can see out there is a couple of offices. This has been a budget of cuts, taxes and charges, with
no strategy, tactic or policy content. It is just a holding exercise until the next swingeing budget.

  Deputy Michael Creed: I welcome the opportunity to comment on the budget. Lest the public
consider our contributions unjustified criticism from a party that has not nailed its colours to
the mast, Fine Gael has published its alternative policy approach to the difficult financial time
the country faces. We have identified, for example, that there is a price worth paying in respect
of the security that civil and public service employment provides by proposing a pay pause for
that sector. We have identified savings across all Departments and sought the elimination of
the multiplicity of quangos that have been created. We have presented an alternative view.
  Today we have an opportunity to provide a critique of the Government’s policy and
approach. While there is an international dimension to what is happening in this country, by
international comparison the situation here is far worse due to the successive policy decisions
of the current Taoiseach when he was Minister for Finance over the last four budgets. The
infatuation with the construction industry at the expense of the exposed trading sector of the
economy, which was the original driver of the Celtic tiger economy, has cost an enormous
price. Alone among EU countries, Ireland has rapidly rising unemployment, the single greatest
barometer of economic failure.
   I will deal with several issues concerning my area of responsibility, that is, agriculture, fisher-
ies and food. I am disappointed the Minister has left the Chamber because it is obvious he is
now clearly the weakest link in Cabinet. He has sacrificed the industry with the potential to
drive the economic recovery. It is not an option for farmers to relocate to eastern Europe or
Asia as their future is rooted in the Irish economy. There are more than 100,000 employed
directly in the industry and perhaps as many more employed indirectly in the food and associ-
ated service industries.
  The agriculture industry has considerable untapped potential but it has been betrayed. One
of the main structural problems facing the industry is that 92% of farms are run by farmers
over 35. In recent years, there has been a three-pronged approach to encouraging mobility such
that highly qualified, young trained farmers could have access to the means of food production,
thereby driving the agriculture and food industries. The three prongs are the early retirement
scheme, the installation aid scheme and the stamp duty exemption scheme.
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

  The Minister lauds the fact that the stamp duty exemption scheme has not been abolished
but the reality is that, in 12 months, there will be a significant decline in the number availing
of the stamp duty exemption for young qualified farmers simply because their parents will not
hand over their land-holdings because of the abolition of the early retirement scheme. Young
farmers will not be encouraged to take the batons from their parents because the \15,000
installation aid grant, traditionally paid directly into the pockets of young qualified farmers,
will not be available. Shame on the Minister. It is a vote of “no confidence” by the Minister in
the new generation that the industry desperately requires to be involved. It is unforgivable of
the Minister to behave in this fashion.
  There has been a significant reduction in payments in two other areas under the agriculture
budget, the suckler cow welfare scheme and the disadvantaged areas scheme. In this regard, I
refer to a press release of 14 December 2007 by the former Minister for Agriculture, Fisheries
and Food, Deputy Mary Coughlan, when announcing the suckler cow welfare scheme, which
was to run until 2012 and result in an annual payment of \80 per cow, or \82 for every cow if
an application was made on-line. She stated, “Ireland is a food trading country, and our beef
industry which has a self-sufficiency of 820%, serves a huge number of customers throughout
Europe and the world.” She added, “we have adopted a structured approach to the beef sector,
the overall aim of which is to equip it to meet the challenges and exploit the opportunities
available in the coming years.” She concluded by stating, “I am confident the scheme will be a
success, and will contribute over the next five years and beyond to the continued improvement
in the quality of Irish beef, so vital if we are to improve our share of the lucrative European
market.” This statement was made less than 12 months ago, yet the scheme is now being
butchered significantly.
   This is a variation on a theme that is becoming quite common under the Government and
the Department of Agriculture, Fisheries and Food. Only last October, the farm investment
scheme was suspended. It was launched the previous July and was expected to run for five
years. What is clearly is emerging is a form of political leadership in the Department that makes
decisions on the hoof and has no strategic long-term plan for the industry. It betrays the new
generation that is committed to agriculture and attending agriculture colleges throughout the
country to obtain the young farmer qualification known as the “green certificate”. This gener-
ation wishes to take the baton but now finds the door to the industry has been closed by the
abolition of the early retirement scheme and installation aid. It is unforgivable.
  In addition to these cuts, one must consider the cuts affecting Bord Bia, Teagasc and Bord
Iascaigh Mhara. I will not criticise these cuts excessively until I know their exact impact. I do
not believe any organisation is beyond becoming more efficient but the percentages across the
bodies in question — 8%, 9% and 10% — are on the high side. The research and development
potential of Teagasc should not be compromised. It is by innovation that we will make progress
and develop new products that will give the industry opportunities for the future.
  I am particularly concerned about the transfer of the marketing role of Bord Iascaigh Mhara
to Bord Bia. Within Bord Bia, which does a fine job promoting Irish food, the budget for the
seafood sector should be ring-fenced. I am concerned that the seafood industry will lose its
identity. It is extremely important that it have ring-fenced funds within Bord Bia comparable
to those made available to it to date under Bord Iascaigh Mhara. I am concerned because I
have been unable to trace any line in the budget following up on the commitment the Minister
made last year that the funding for decommissioning the whitefish fleet would be made avail-
able again this year. It is unavailable.
  The abolition of installation aid and the early retirement scheme, the butchering of the
suckler cow scheme, which will probably result in the promised payment of \82 being reduced
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

  [Deputy Michael Creed.]
to approximately \40, and the significant curtailment of disadvantaged area payments for claim-
ants with more than 35 hectares constitute a real betrayal of the agriculture sector, which has
the potential to lead us out of the difficulties we face.
  I will comment on aspects of the budget that do not pertain to agriculture. Many speakers
referred to the most unkind cut of all, that is, the withdrawal of the medical card from those
over 70. Despite the best efforts of the Government to spin this issue, 125,000 of the 139,000
who hold a medical card today will not retain one after the new means test. This, allied with
hospital charges, general practitioner visits, accident and emergency charges and drug refund
scheme changes, will have an enormous impact on their financial well-being. Their mental well-
being will also be affected because they will fear becoming sick and not being able to afford to
see a general practitioner.
  Added to this is the fact that in recent years many elderly people, because of the security of
having a medical card, surrendered their medical insurance policies. Such people may now be
obliged to pay for medical insurance again but will find they will have to wait a defined period
before being covered by any health insurance company. This, allied to the fact that many of
them will be liable not only to the Lenihan levy of 1% on their incomes but also to a 2% health
levy, is alarming. Losing the medical card may constitute a single whammy but all the other
charges result in a multiple whammy for the elderly. The Government should reconsider these
cuts in the health sector.
  Let me consider two other issues. Great political capital was derived in my constituency
because of the proposed decentralisation of some 100 laboratory jobs in the Department of
Agriculture, Fisheries and Food to Macroom and of 80 jobs in the Office of Public Works to
Kanturk. This proves to have been a political charade played out at the expense not only of
those employed in those offices but also of those locals who legitimately expected secure
employment to be delivered to their towns. This is particularly the case because the towns are
reeling at present due to increases in unemployment rates of more than 50% in the past 12
months. The Government has a considerable case to answer regarding these commitments and
how it misled people over a prolonged period.
  I will now address the education cuts. Solemn commitments with regard to class sizes were
given at public meetings I attended in the lead-up to the last general election. Now we will
have the largest class sizes in the OECD. We must take into account that many of the OECD
countries are not nearly as wealthy as this country, yet we are failing to provide the passport
for young people into secure employment by virtue of education provision, which is unforgiv-
able. Added to this is the cowardice of the Minister for Education and Science, who during the
summer flew the kite to reintroduce college fees by the back door but who has not got the
political bottle to stand up and announce that it is effectively college fees by another name.

   Deputy Michael D’Arcy: There is an overall assumption in the budget that the worst of the
downturn has become apparent and that there will be an upturn in a year or two. The problem
is that while there may be an improvement, it cannot be assumed that the conditions of recent
years will return. However, the Government in its budget is content that reducing the deficit a
little and pencilling in a 7% deficit for next year is fine as the economy will improve thereafter
and there is little need for further action. This is very optimistic.
   The budget is optimistic in assuming that inflation will fall to 2.5%, which may happen but
is towards the lower end of expectations. As a result, while capital expenditure is not cut too
much in nominal terms, if inflation is high then there will be real cuts in this area. Also, the
current expenditure assumptions will come under severe strain. Forecasts for current expendi-
            Financial Resolution No. 15:   15 October 2008.          (General) Resumed

ture of 4.5% in 2010 and 2.8% in 2011 which are contained in the tables in the appendix on
the Department’s website also look optimistic.
  The result is that this must be seen as a stopgap enabling budget. It is action of a sort in
response to the greatly changed circumstances but the assumption that an upturn will be highly
beneficial in the near future means that another tough budget is on the cards within a year.
We must not forget this is the second budget in ten months.

  Deputy Michael Creed: That will be after the local elections.

  Deputy Michael D’Arcy: Most likely. If this is not the case, next year’s budget will have to
be much harder than the current year’s.
  While I do not have much time, I wish to address several issues. The 1% employment levy
can only be described as the most inequitable in the history of the State. We are taxing students
earning a few euro to try to get through college and pensioners trying to boost existing pensions
which have fallen significantly. Such people may be adding \5,000 or \10,000 to their annual
income but we are taxing them at the same rate as those earning \95,000. It has never happened
before that we have taken such an incredibly retrograde step.
   The issue of medical cards has been dealt with so I will address the issue of business. There
is nothing in the budget that could be characterised as providing anything in the way of a long-
term impetus for business in this State. The Government seems to be clapping itself on the
back because corporation tax remains at the current rate. However, it did not have an option
to raise it. If it had done so, it would have benefited the countries throughout Europe who are
currently wiping our eye, such as Switzerland, which offers zero corporation tax if one locates
in certain cantons. Other countries have 3% to 5% corporation tax for one reason only, namely,
they are happy to get business into their country to earn social insurance levies and income tax
from the people employed.
  The corporation tax rate was set by the rainbow Government of which the Leas-Cheann
Comhairle and Deputy Quinn were members. From what I am told, many of the mandarins in
the Department of Finance almost had nosebleeds at the idea of reducing and rationalising the
rates, but Deputy Quinn did it. Another man who took bolder steps than we have seen for
many years is the former Minister, Mr. McCreevy, who reduced capital gains tax from 40% to
20%. What does this Government do but reverse that trend and bring it up to 22%, a 10%
increase, which is large by any standard? To advise the Government Members opposite, per-
haps they should bringing back Mr. McCreevy in the way Gordon Brown brought back Peter
Mandelson. Dublin South has a by-election in a few months. He could be bunged in there to
see how he does and perhaps he could then be bunged back into the Department of Finance.
   VAT will increase from 21% to 21.5%, which is another tax on business. Capital spending
cuts are widespread. Overall, capital expenditure falls by 9% and if we assume inflation remains
close to 5%, this is a very large reduction. Much of this, however, is taken up by cuts in agencies
and quangos. If waste is eliminated, that is fine, but it is far more likely that front line delivery
will be cut to balance budgets in these agencies.
   The figures presented last year by the Taoiseach, Deputy Cowen, the then Minister for
Finance, showed that our national debt ratio versus GDP stood at 25% at that time. Today,
we are predicting a deficit of approximately 0.9% of GDP, which translates as \11 billion. How
can the Government have got these figures so wrong? I have a major concern with regard to
this year’s GDP ratio, which the Department of Finance is pitching at 43%, a colossal 18%
increase which almost doubles the national debt in a very short period without factoring in
billions of euros that will be needed down the line to bail out the banks. We are in dire straits
and in perhaps the worst economic crisis in the history of the State.
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

 Minister for Arts, Sport and Tourism (Deputy Martin Cullen): I wish to share time with the
Minister of State, Deputy Sean Haughey, and the Minister of State, Deputy John Moloney.

  An Leas-Cheann Comhairle: Is that agreed? Agreed.

  Deputy Martin Cullen: A total of \551 million has been allocated to the Department of Arts,
Sport and Tourism for 2009, which includes \405 million for current spending and \146 million
for capital projects. This figure represents a substantial investment by the Government in the
arts, sport and tourism sectors and must be seen against the background of significant expendi-
ture that has taken place in recent years.
   While there has been a substantial reduction in the allocation for capital expenditure from
\277 million in 2008 to \146 million this year, this relates to the fact that the 2008 budget made
provision for large once-off projects in the sports and arts areas, including Lansdowne Road,
which received \93 million last year, the Gate Theatre, the new Opera House in Wexford —
which I have seen and look forward to seeing again tomorrow, and which is one of the most
fabulous opera houses anywhere in the world — the new Lighthouse Cinema in Smithfield, the
Carlow Arts Centre and the Everyman Theatre. The Government commitment to these pro-
jects is now almost complete and they account for \113 million in the Department’s capital
allocation in 2009. When those once-off projects are taken into account, the underlying upward
trend in the capital available to the Department of Arts, Sport and Tourism is maintained.
   I will deal now with the individual sectors under my responsibility. The maintenance of a
significant allocation for tourism services in 2009 reflects the Government’s continuing commit-
ment to the development of tourism as an important economic sector which contributes some
\5 billion in foreign revenue earnings, 250,000 jobs and \2.3 billion in estimated tax receipts.
The tourism sector has made major progress over the past ten years, with overseas visitor
numbers doubling to 8 million and foreign revenue earnings increasing by a factor of 2.5 to \5
billion. This impressive performance was driven by a clear Government development strategy,
in partnership with the industry, and by a range of supporting programmes and initiatives in
the areas of marketing, product development and training.
  There is no doubt that the current domestic and international environment is very challeng-
ing for tourism worldwide and in Ireland. Increased fuel costs and a global economic downturn,
with adverse trends in exchange rates, are affecting business. Current indications are that
Ireland is maintaining its market share in Europe and many competitors are faring less well.
Latest figures from the Central Statistics Office show that, notwithstanding the difficult global
environment, the number of overseas visitors for the first six months of 2008 was up by 2.6%
on the same period in 2007. The strongest growth was in the mainland European and long-
haul markets, reflecting the broader economic trends.
   There was a 1.3% increase in revenue from overseas visitors in the first half of this year. In
actual terms, expenditure from overseas visitors for the first six months was more than \2
billion. Figures since July are less positive and mirror trends across Europe, where the year
started positively but saw a downturn in monthly figures from May onwards. However, the
strategic approach taken to tourism in recent years by both the public and private sectors
has given the sector the capacity to withstand such cyclical external challenges and sustain its
performance in coming years. The Irish Tourist Industry Confederation has stated that the
fundamentals of the industry remain strong and Irish tourism is better positioned to withstand
any downturn than in the past. As our overseas tourism business has diversified across a wider
range of markets in recent years, that has given it the capacity to better withstand pressures
on particular markets. The total allocation for tourism in 2009 is approximately \160.5 million.
The amount secured is a very positive outcome in the challenging circumstances facing the
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

country and is recognition of the importance of tourism as an economic sector. Our investment
in front-line international tourism marketing is being maintained. The allocation for the tourism
marketing fund, TMF, for 2009 is \48.5 million. Although that is a reduction of \1.5 million
there will be no reduction in the amount available for front-line marketing activities. That is
because, in 2008, Tourism Ireland invested on a once-off basis on renewing the Ireland tourism
brand, including the development of new promotional material. In the five years from 2004 to
2009, the tourism marketing fund will have increased by more than 50% from \31 million in
2004 to \48.5 million in 2009.
  Within the overall tourism marketing fund, the allocation for 2009 will enable the tourism
agencies, in partnership with industry interests, to maintain the super regions campaign — for
which an identical amount to 2008, \3.15 million, is being provided. As in 2008, \3 million has
been provided also to allow for the continuation of Discover Ireland’s wonderful west cam-
paign, for the wider Shannon Airport catchment area, in line with the commitment given in
the Shannon Airport catchment area economic and tourism development plan.
   Given the overall economic situation, the tourism agencies should also be in a position to
negotiate better value in terms of advertising and marketing space, because there is a real
reduction in available spend across the business world in terms of accessing media. A total of
approximately \19.4 million has been provided for the administration and general expenses of
Tourism Ireland. The slight reduction on the 2008 figure will be achieved through reductions
in administrative expenditure, non-programme advertising and consultancy spending. That rep-
resents a very positive outcome and demonstrates the Government’s commitment, in co-oper-
ation with the Northern Ireland Executive, to marketing the island of Ireland overseas. While
we are obviously in a particularly difficult time, maintaining the front-line overseas marketing
allocation, as I have done, will allow Tourism Ireland to play its part in helping the sector to
manage the current challenges and to return to sustainable growth in the medium term.
  The budget provided to Failte Ireland is \80.791 million, a reduction of just 2.5% over the
2008 provision. Failte Ireland should be able to achieve these savings without any impact on
front-line services to the industry. It is expected that the bulk of the savings can be made in
administration, non-programme advertising and consultancy spending. That figure includes our
commitment to the Irish stop-over in Galway of the Volvo Ocean Yacht Race 2008-2009, which
will provide an economic bonus of \44 million to the west of Ireland region and for Ireland as
a whole. It also includes contributions to Ireland’s hosting of the Solheim Cup — the ladies
Ryder Cup equivalent — in Meath in 2011, and the contribution towards hosting the World
Rally Championship in the north west in January 2009. Both of those events will have signifi-
cant spin-off economic benefits for their regions.
    In 2009 capital funding of \11 million is being provided to support investment in key tourism
infrastructure, attractions and visitor activity facilities that are in need of upgrading and
development, and to bring on-stream new products and experiences to meet the sophisticated
needs of a more discerning international visitor. Although lower than the 2008 figure, the
allocation in 2009 reflects a careful assessment of the range and quality of applications under
Failte Ireland’s tourism capital investment programme as well as the anticipated drawdown of
funds in 2009.
  Following the Government decision regarding State agencies, my officials are in discussion
with the affected agencies to ensure that the transition and necessary changes are achieved in
the most efficient manner possible.
  The huge social and economic benefits of sport are acknowledged by the Government and
are reflected in the unprecedented level of Government funding for sport in recent years. As
a result of our investment in sporting facilities in the past ten years people now have more
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

  [Deputy Martin Cullen.]
opportunities to play and compete in a vast array of sports than ever before. The provision of
approximately \204 million for sport in budget 2009 is a significant investment and will enable
the Department to meet its commitments in 2009.
   A total of \56 million has been provided for the sports capital programme to meet costs
from existing allocations in 2009. That will bring to \780 million Government expenditure on
sports facilities at local, regional and national level in the past ten years and underlines the
Government’s ongoing commitment to the provision of sports facilities. The allocation for the
local authority swimming pool programme next year is \18 million. The current round of the
programme provides for 57 swimming pool projects. Of those, 37 projects have been completed
and opened to the public, eight other pools are under construction and another 12 are at
various stages of development. The total amount invested by Government in this programme
in the past eight years is approximately \123 million.
   The Irish Sports Council, ISC, will receive an allocation of just over \53 million for 2009.
While the 2008 allocation was \57.6 million, the 2009 funding is still significant and represents
an increase of more than 300% on the 2000 funding level of \13 million. I am confident that
allocation will be sufficient to support the work of the ISC in maintaining existing programmes
and to build on recent significant progress in all areas including local sports partnerships,
Buntus, women in sport, older people and sport, youth field sports and the high performance
  I am pleased to confirm the Lansdowne Road stadium project continues to be on target to
open in 2010 and that at the end of this year, the Government will have delivered on its
commitment to make a contribution of \191 million towards the project. Lansdowne will be a
world-class stadium and a suitable national venue for major rugby and soccer games.
   Under the legislatively-based funding arrangements for the horse racing and greyhound sec-
tors, the horse and greyhound fund would have expected an amount of approximately \80
million for 2009. However taking into account budgetary difficulties, an amount of almost \70
million is being provided. A review of the fund is currently under way in my Department. The
rationale of the fund has been that the horse and greyhound racing industries needed certainty
in their funding support on a multi-annual basis and that such funding to develop the industries
should be derived from the duty generated from off-course betting. The increase in off-course
betting tax from 1% to 2% will serve to significantly reduce, if not virtually eliminate in 2009,
the amount of direct Exchequer subvention required.
   The arts are a vibrant and vital sector of our economy, an important part of our community
and the wellspring of many of our creative and innovative enterprises. The arts are primary
economic contributors, real businesses and enduring employers of more than 45,000 people.
               Next year alone, my Department will invest approximately \200 million in the
7 o’clock      arts and culture sector and creative industries. In 2008 and 2009, combined invest-
               ment by the Government in those sectors will be approximately \450 million. It
is not too long ago since the Arts Council’s annual allocation was one tenth of that sum. That
is real, tangible investment in the real economy, in real people and in real jobs. It is also
investment that enhances the productive and creative capacity of our country.
   The arts, cultural and creative sectors have achieved much in recent years. Many museums
and the National Library have won awards in recent years. I will continue to allocate funds
under the existing ACCESS programmes. I hope to complete them in the next year. Notwith-
standing the difficult circumstances in which we find ourselves, we can still look forward to
continued substantial investment, rightly so, in the tourism, arts and sport area.
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

  Minister of State at the Department of Health and Children (Deputy John Moloney): I am
pleased to have an opportunity to speak on the budget debate. I do so from the perspective of
my position as Minister of State at the Department of Health and Children with responsibility
for equality, disability issues and mental health.
  I reassure people that even though we are in a tight budgetary situation the commitments
given by the Government under the programme for Government and the multi-annual invest-
ment programme will be honoured. While it is not relevant to recall what commitments have
been delivered to date, nevertheless, it is important to remind the House of what has been
achieved under the disability strategy in the multi-annual programme and to reaffirm the
Government’s commitment to continue that strategy.
  I refer to the multi-annual investment programme in terms of the services provided to date
and more importantly the funding for the future. I will also deal with the EPSEN programme
and clarify the matter contained in the budget statement regarding the efficiency saving of the
1% reduction in funding towards voluntary groups.
   To date, under the multi-annual programme 980 residential places have been secured, and
313 new respite places and 2,500 new day places were created. I am the first to acknowledge
that speaking about what happened in the past is not good enough in terms of what will happen
in the future. I reassure the House that I am not trying to make a big deal of the fact that we
are announcing a \20 million investment programme, \10 million to the Department of Health
and Children and \10 million to the Department of Education and Science. I recognise the
huge demand on existing services.
  I reassure the House, as this issue has cropped up in recent debates, that the funding to
which I refer will be ring-fenced specifically for use by the Department of Health and Children
in the area of disability and mental health services. There has been some negative comment
suggesting funding approved by the Government for these services goes into what is often
referred to as the HSE black hole. I assure the House and those interested in this area that the
\10 million allocations for health and education will be used specifically to fund new posts. Not
alone is the funding ring-fenced but, more importantly, the positions agreed have been agreed
with the HSE. Unlike what happened last year, the advertisements for the recruitment of 125
additional therapy posts in the disability and mental health areas will begin immediately. I do
not say this to gloat over the \20 million that has been allocated. I am reasonably assured on
this matter, but obviously the funding for the multi-annual programme is not in the package
this year.
  The funding agreed will take into account the commitments made for education for persons
with special needs. Within the present budgetary constraints education for persons with special
educational needs, EPSEN, cannot be funded. However, the \20 million allocated for therapy
positions represent EPSEN under another name. The benefit of this additional funding will
include much needed therapy posts which will be allocated within the disability sector and
will include speech and language therapists, occupational therapists and physiotherapists for
children’s disability services.
  I refer to the 35 additional posts for child and adolescent mental health services. This will
include clinical psychologists, occupational therapists, speech and language therapists and social
workers. There will be some new additions to the existing multidisciplinary teams and rather
than have groups worrying about the commitment to ring-fencing funding, as was the case last
year, staffing levels will remain intact.
  I refer to additional funding under the mental health budget allocation. Some \1.75 million
has been allocated for suicide prevention. Regrettably, the incidence of suicide is on the
increase and the figures for this year will demonstrate this. It is opportune, timely and proper
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

  [Deputy John Moloney.]
to further invest in suicide prevention and I look forward to an early meeting with Mr. Geoff
Day of the National Suicide Prevention Office to discuss how we can optimise the level of
spending in this area.
   The commitments under A Vision for Change must be speeded up. We are moving from the
old structure to the new community-based structures in psychiatric services. This is typified by
what is happening throughout the State with the new acute psychiatric units. I commit, as I
have previously, to beginning the process of meeting with the 12 psychiatric hospitals in the
State. We expect to have closure plans in place before the end of this year. The funding secured
from the sale of these properties will be ring-fenced.
   The efficiency saving of 1% in funding of non-statutory services requires clarification and I
wish to allay fears that may exist concerning this funding. Some \1 billion goes towards the
voluntary sector and non-statutory groups each year. I have met with some of these groups in
recent weeks. I have assured them that I do not wish to force an amalgamation. The proposal
is an efficiency measure made in the hope that we can discuss the matter with these groups in
the coming weeks and arrive at a conclusion where groups may share front-of-office facilities,
back-up facilities or whatever else. The important point is that we will, hopefully, secure the
services of an independent chairperson who will examine the process of seeking the efficiency
measure. We will invite people from the disability and mental health services sectors to sit on
the commission that will seek the efficiencies. I have no difficulty backing up the statement
that the process is about efficiency, not about reducing the level of commitment in that sector.
More important, it is not about forced amalgamations. This will not be a dead of night process,
it will be an open, transparent campaign where all the people involved will have the opportunity
to provide input. The relevant groups will receive support as they investigate the process of
   I refer to the estimated cost of implementing the recommendations in A Vision for Change.
I do so not in the context of taking funding from the disability sector or other support services
in that area. A Vision for Change proposed funding amounting to \150 million for a seven to
ten year programme. It is dependent to a great extent on the re-modelling of the existing
resources. There is some doubt outside the House about how we can, on the one hand, commit
to a change in the delivery of mental health services and, on the other hand, divide scarce
resources in the budget. I make the commitment that at present the HSE is preparing an audit
value of the existing properties. The process will be transparent. The resulting figure will be
completed by the end of this year. The closure plans have now begun. I called to the constitu-
ency of the Leas-Cheann Comhairle a fortnight ago and met with the staff of St. Senan’s
Hospital. I am pleased to say to the House it has moved far more quickly than any other facility
and has its closure plan agreed. I intend with all the energy I possess to deliver similar closure
plans with the help of the hospitals involved, as was the case with St. Senan’s Hospital, and to
return to the House early in the new year to explain how A Vision for Change can become a
reality with the use of the assets.

  Minister of State at the Department of Education and Science (Deputy Sean Haughey): In
working with the Minister for Education and Science, Deputy Batt O’Keeffe, and the Tanaiste
and Minister for Enterprise, Trade and Employment, Deputy Mary Coughlan, there have been
many challenges in the finalisation of the 2009 Estimates process in the areas for which I have
responsibility. Difficult choices on priorities for investment had to be made to control public
expenditure and to ensure sustainability in the long run.
  My areas of responsibility are lifelong learning across the Department of Education and
Science and the Department of Enterprise, Trade and Employment, and social inclusion and
            Financial Resolution No. 15:   15 October 2008.          (General) Resumed

school transport in the Department of Education and Science. I have responsibility for oversee-
ing the effective co-ordination of lifelong learning across the two Departments. In this capacity,
I am the chair of the interdepartmental committee on the implementation of the national skills
strategy. This committee has responsibility for drafting and implementing a plan to realise the
targets and objectives contained in the national skills strategy. It is my intention that this plan
will examine the existing provision of education and training to ensure a co-ordinated and
efficient provision between the respective education and training sectors. The implementation
plan will also determine the key areas and initiatives that will require continued priority focus
to achieve the objectives of the national skills strategy. It is my intention that this implemen-
tation plan will be completed by early next year.
   It has been necessary to have a prioritised approach to the 2009 Estimates. While the pro-
vision for further and adult education in 2009 shows a small increase on the outturn for 2008,
nevertheless it will involve very careful management of the available resources and a reduction
in the number of places being funded. This reduction is of approximately 500 places in the
back to education initiative, BTEI, and 100 places in senior traveller training centres and will
mean the number of places in the BTEI returns to 2007 levels. I shall endeavour in the context
of the 2009 provision to safeguard the position of adult literacy, the vocational training oppor-
tunities scheme and Youthreach. Allowances to participants in the vocational training oppor-
tunities scheme, the Youthreach scheme and the senior Traveller training centres will be
increased in line with the appropriate social welfare rates or FAS trainee allowances. We will
continue to provide over 30,000 places in the post-leaving certificate sector.
   FAS and Skillnets, which are the Department of Enterprise, Trade and Employment’s two
key training providers, have increased their focus on the provision of training to the low skilled
in response to the national skills strategy. As a result of the current economic difficulties,
particularly the rising unemployment rate, the Government has prioritised the provision of the
necessary support services to assist people who have been made redundant and are unem-
ployed. This focus, which will continue in 2009, will be a central part of the delivery of the
vision outlined in the national skills strategy. This lifelong learning objective is important. I am
pleased to note the three qualifications agencies are to merge as a single body. This was one
of the rationalisations of agencies announced in the budget.
   Since I was appointed as Minister of State in the Department of Education and Science, I
have worked closely with the Further Education and Training Awards Council. The council
has been effective in developing a broad range of awards for all learners across further edu-
cation and training. It is responsible for levels 1 to 6 of the national framework of qualifications.
Progression arrangements are being enhanced by this set of new awards, together with the
work of the Further Education and Training Awards Council. The merging of the three organis-
ations as a single agency will enhance the lifelong learning approach and ensure the benefits
of the councils’ work over the past seven years will be realised. The new organisation will build
on the leading quality assurance role Ireland has played throughout Europe in the further
education and training and higher education sectors. Ireland has made a real difference on the
international stage in this regard. The qualifications bodies have ensured we play a lead role
in policy development and implementation. I am delighted the lifelong learning approach to
qualifications and quality assurance, which is embodied in the national framework of qualifi-
cations, is fully reflected in a single strong agency that prioritises the needs of learners.
  The Delivering Equality of Opportunity in Schools, DEIS, action plan is the central element
of the Department’s social inclusion strategy, which promotes equality of educational oppor-
tunity for all. A key part of the strategy involves focusing the additional resources which are
available on the areas of greatest need. Schools which have been identified as disadvantaged
will continue to be fully supported. When the DEIS initiative commenced, it provided for
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

  [Deputy Sean Haughey.]
concessionary measures, to last for the duration of the programme, whereby continuing funding
would be provided to schools which were no longer classified as disadvantaged. In prioritising
expenditure in 2009, it is necessary to cease such concessionary measures. This means that
additional posts will be withdrawn from schools which were included in previous disadvantaged
schemes but are not included in the DEIS initiative. Similarly, the top-up capitation funding
provided to such schools, as well as the dispersed disadvantage funding given to schools not
included in DEIS, will be withdrawn. This withdrawal is in line with the broad thrust of the
recommendations of the Office of the Comptroller and Auditor General in its 2006 report on
primary disadvantage. The office suggested a more focused approach to prioritising expenditure
should be put in place.
   The 2009 Estimates recognise the importance of the school transport scheme in supporting
school access and attendance, particularly in rural communities. The Estimates provide for an
increase of 12% in the 2009 allocation, when compared to the initial allocation for 2008. This
will enable the provision of school transport for over 136,000 children, including approximately
9,000 children with special needs. The additional funding is particularly important in light of
the increase in the number of children in schools, the establishment of new schools and the
expanding number of children identified as having special educational needs. I have prioritised
funding for school transport to ensure their needs are met. The increase also reflects some of
the cost pressures which are relevant to school transport. In particular, the allocation allows
for a compensatory allowance to be paid to private contractors who can avail of a fuel rebate
scheme until the end of this month.
  To meet current demands, payments of post-primary transport charges are being increased
with effect from next summer. A single payment of \300 will be payable for each child. The
maximum individual family charge payable will increase to \650. Eligible children in families
that have a medical card, or children with special needs, will continue to be exempt from the
charges. The single payment system is a new departure. It will mean that planning can be
undertaken more efficiently for a full school year by Bus Eireann. It will ensure that concession-
ary transport will be confirmed on the basis of a full school year, rather than on a term-to-term
basis. I am aware the term-by-term allocation has caused difficulties for many children and
their families. Post-primary transport charges will meet approximately 20% of the cost of post-
primary transport in 2009.
  Many difficult decisions have had to be made in considering the 2009 Estimates for my areas
of responsibility. A commitment has been demonstrated to prioritising investment in difficult
economic circumstances. I am confident the steps being taken will ensure the available
resources are appropriately used to have the most effective impact in these areas. They will
provide for sustainability in the long run.

  Deputy Jan O’Sullivan: I would like to share time with Deputies Sherlock and Ciaran Lynch.

  An Leas-Cheann Comhairle: Is that agreed? Agreed.

  Deputy Jan O’Sullivan: My office, like the offices of all my colleagues in this House, has
been inundated today with calls from people concerned about the impact of this budget on the
over 70s. Such people previously qualified for a medical card automatically, without a means
test, but they are now subject to such a test. As this day has gone on, we have learned more
and more about the nasty aspects of this budget. Perhaps the nastiest development was the
posting this afternoon of a notice on the HSE website about the means testing for medical
cards of people over the age of 70. Up to now, such people were not means tested unless they
had a spouse under the age of 70. In such cases, the threshold for eligibility for a medical card
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

was set at \596.50 for a couple. That threshold has been halved for all people over the age of
70. All couples over that age are now subject to a means test threshold of \298 per couple. The
threshold for couples over the age of 70 has been halved, in effect. The means test threshold for
a single person over the age of 70 has been set at \201.50. If a single person of that age wants
to get a full medical card, he or she must not have an income in excess of \201.50. The relevant
threshold for a married couple is \298. That means, in effect, that a person with a relatively
small occupational pension will be ineligible for a medical card. This development is shocking
and worrying for those in the over-70 age category. I cannot emphasise enough the number of
people who are concerned about this. There is a real fear among elderly people that they will
not be able to pay for their health charges.
   We got a lecture from the Minister for Finance, Deputy Brian Lenihan, yesterday. He told
us we should be patriotic. The elderly people of this country, who have paid their taxes and
worked hard over their lifetimes, often on small incomes, do not need a lecture on patriotism.
They need fair play and an opportunity to have their health care needs looked after at this
stage in their lives. It seems the opportunity they were given in that regard is to be taken from
them, which is absolutely shocking. The manner in which the means test for medical cards
operated before now was relatively progressive. The threshold for a single person under the
age of 65 was \164 and the threshold for a single person between the ages of 66 and 69 was
\173.50. The threshold for a couple under the age of 65 was \266.50 and the threshold for a
couple between the ages of 65 and 69 was \298. The threshold for a couple between the ages
of 70 and 79 was \598.50 and the threshold for a couple over the age of 80 was \627. That
progression has gone completely. The threshold for those over the age of 70 has been reduced
to the level applying to those between the ages of 66 and 69. This nasty little piece of work has
been revealed on the HSE website. It was not announced in this Chamber by the Minister for
Health and Children when she spoke earlier in this debate. It is a huge cause for worry among
elderly people throughout the community.
   People are concerned that they will not be able to pay for their medical treatment. Deputy
Hoctor is the Minister of State with responsibility for the elderly, but I am not sure if she is
aware that the means test has been slashed in this way. The threshold has been halved, where
previously it was \596.50 for a couple. This puts fear into the hearts of people who are con-
cerned for their health and it makes them wonder whether they will be able to get the kind of
treatment they need. We know that elderly people need to go to the doctor regularly and that
it was a great comfort to them when the free medical card was introduced. There were argu-
ments about it at the time, and our party expressed concerns about introducing for everybody,
regardless of income. However, it was introduced a year before a general election in order to
win that election, but was taken away a year after another general election. That is highly
cynical and damaging to the people concerned.

  Deputy Sean Sherlock: It is very patriotic.

   Deputy Jan O’Sullivan: My party leader raised a point this morning about people who gave
up their voluntary health insurance because they felt they did not need it following the introduc-
tion of free medical cards. Those people are now trying to go back into an insurance system in
order to cover health costs. The point made this morning was that if people had an existing
condition, then they would not be covered for a number of years if they went back into a
voluntary health insurance scheme. Since risk equalisation has been struck down by the courts,
elderly people who broke their insurance cover and who wish to go back are in a very uncer-
tain situation.
  I want to address some of the other issues that relate to health in this budget, especially the
charges that have been introduced. The increase from \66 to \100 for a visit to an accident
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

  [Deputy Jan O’Sullivan.]
and emergency department is a huge burden on people who are sick. When Fianna Fail went
into Government back in 1997, that charge was £12, so there has been an 800% increase. There
have been increases in charges for hospital beds. The threshold for the drug repayment scheme
has been raised to \100 per month per family, which is up from \90. These charges impose
huge hardship on families.
  The reason the health sector is suffering these increased charges, which are estimated to
come to \100 million, is largely due to the complete failure to reform the health services. When
the HSE was formed in January 2005, the Minister stated that it would provide efficiencies,
save money, cut down on administration and provide funds for the patient at the coal face. It
has done precisely the opposite and the Minister for Finance admitted yesterday that there has
been an increase of 1,900 administrative staff since it was set up. That is hardly a reduction in
the burden of administration. The formation of the HSE was rushed for political reasons so
that it could be put in place by 1 January 2005, but it was destined to fail. It was designed
simply to stick 11 health boards together and put another layer on top. It was designed to be
a centralised dinosaur, with very little power to make decisions at the patient level. As a result
of that, it has understandably failed to work. There has been an increase in the budget, but the
money has not produced any better results for patients. Bureaucracy has been increased and
has made it difficult for people who are directly looking after patients to make decisions in the
interests of those patients.
  The Labour Party put forward a plan on how the HSE should be reformed. I am glad to see
that a little bit of it is being taken on board, as there is an effort to thin out the layers of
administration at the higher levels. However, we really need more power for those who are
directly working with the patients so that they can control their budgets and decide how those
budgets are spent. That has not happened. As a result of the lack of reform, there has instead
been a chopping at the edge of the budgets, which will only hurt the patients. It has been
admitted that services to patients will be affected by this. The 2% increase given to the HSE
will not enable it to cope with the extra demand or with wage agreements that have already
been signed. Nor will it enable the HSE to cope with consultants’ payments, which have also
been increased by agreement. It will not deal with medical inflation, which is probably higher
than general inflation.
   This winter, we will see more people on trolleys and waiting lists. The Taoiseach made the
point this morning that those over 70 who are to lose their medical cards will be all right
because they are entitled to free care in the hospitals. They will be so entitled, but how long
will they have to wait? We all remember Susie Long, who died on a waiting list because she
was a public patient. Are the people who are now losing their medical cards going to have to
wait on lists that will grow longer? I understand that health workers in the north east have
already been told that their budgets will be cut back by 10-12% in hospitals, and we all know
what is going on in Drogheda at the moment.
  The health sector has been deeply damaged by this budget, and the vulnerable people in our
society, the old, the sick and the disabled are those who will suffer most. They are taking the
brunt of it and that is not how it should be. We were told in this budget that the Government
was going to protect the vulnerable, but it has done everything except protect the vulnerable.
The Government has exposed people to worries that they might not be able to look after
themselves when sick.
  The leader of Fine Gael raised the issue of the “fair deal” and the ability for someone to
offset health expenses against tax. The reply was that it would not come in at the lower rate
until the fair deal was in place, so things were fine because people would be covered by it.
However, we need to read the small print of the fair deal. To qualify for the fair deal, one has
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

to be assessed as being in a state of maximum dependancy. There are many elderly people who
have to leave acute hospitals and go to nursing homes because they do not have enough support
to go home, but who are classified as being of medium dependency. From reading the legis-
lation on the fair deal, I believe that such people will not qualify on the basis of the medical
assessment. I accept that there is a social assessment as well, but I have no doubt that many in
nursing homes will not qualify for this new scheme. Therefore, the families of those people will
be affected by the change in the rate of tax that can be written off against medical expenses
and expenses for long-term care.
   There are many aspects to the budget that will affect sick people. It is a very sorry day for
the health services. It will take a long time to recover, yet we still do not know what allocation
the HSE will get next year. I have no doubt those figures will have a serious impact on health
services in hospitals and in the community. I support the Government’s wish that where pos-
sible people should be cared for in their own community. I predict we will see cuts in home
help hours and in the many other kinds of home supports needed if people are to stay out
of hospital.
  This is a sorry day for the health services. I wished to highlight the manner in which the
over-70s have been treated and how they will now be means tested for medical cards. Many of
them are very worried tonight.

  Deputy Sean Sherlock: Most of the points about the health effects of this budget have been
well covered by my colleagues. They highlighted how the budget has imposed numerous stealth
taxes and cuts. Deputy Shortall has outlined the so-called treacherous 30. A rational analysis
of this budget would leave one in no doubt but that every single citizen will be adversely
affected. The Taoiseach yesterday called the nation to patriotic action. In a later deposition,
for want of a better word, the Taoiseach stated this Government is predicated on a philosophy
of republican egalitarianism. When the Minister for Finance finished his speech yesterday and
the backbenchers rose to applaud him, I thought they were going to spontaneously burst into
a rendition of “Wrap the Green Flag Round Me”. From where I stand as a republican and as
somebody who subscribes to those republican ideals and those ideals of egalitarianism, this
budget is far from that. If I was an elderly person today, or if I was somebody who was surviving
on a low income or if I was unemployed and I was seeking some solace from this budget, none
would be found. There is nothing in this budget that covers those people who would subscribe
to those same ideals, namely, every single citizen.
  If it was an egalitarian budget, it would not have introduced a levy of 1% on all income. If
we subscribe to the notion that taxation must be equitable and fair and it must abide by the
canons of taxation, then the tax rates would have been increased and the Minister would not
have increased taxation on all income. I wish to nail the lie that this is somehow a progressive
measure. What it seeks to do is further decrease take-home pay and real income. The people
most affected will be those on the margins or in the low-income bracket. If this is coupled with
the increases in stamp duty, the increased charges for third level registration, increases in VAT
and in DIRT, no matter what way, such people will be caught on all sides. These are not the
actions of a Government that cares about levelling taxation in a truly egalitarian manner.
   I had a call today from a lady from Cloyne in my constituency of Cork East. This lady is
married, there are two incomes coming into the family and she has four children. This is a
person who is rational in her assessment of the current climate. She and her husband have
lived through the 1970s and 1980s and had begun to raise a family in those times when her
husband and herself were paying 50 pence in the pound and possibly more in taxation. She has
a 22-year old son and she is now actively encouraging him to emigrate. She told me she can
see no hope for him in the present climate in this country. She is telling him his best chance of
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

  [Deputy Sean Sherlock.]
getting a good job and surviving in this world would be to get out of here. There is nothing
that she could see in the current climate that would give her or her family any hope. She told
me that her husband is near retirement age and that they both worked hard for every single
penny they earned. They never asked for anything from the State. They never had medical
cards. They paid the high rates of tax in the 1970s and 1980s. They sent their kids to college
but they never qualified for third level grants. That family is representative of thousands of
families who today will have to pay the price of the profligacy of the past seven or eight years.
They will have to pay the cost of that deficit of approximately \12 billion, if the figures are to
be believed. As her public representative, what am I to say to her to give her any hope for the
future? I do not blame her for the cynicism that she expresses about the political system. When
I hear the Government wrapping the language of this budget in patriotic fervour and republican
egalitarianism, it sticks in my craw a little bit. The Government, notwithstanding the external
forces we hear so much about, must take some level of political responsibility. If we were on
that side of the House, we would have to take political responsibility if the cards were stacked
in the same way. This is what the people want, particularly those who are on low to middle
incomes. They do not want always to be forced to pay the price of Government profligacy.
This is not what they have subscribed to. They are, by their nature, always PAYE workers and
they are the people that work the hardest, put their children through college and do not expect
a lot from the State but they do not expect to be punished by the State either and that is what
this budget has done to those people. If we are talking about egalitarianism and about equity
in the system, then I call on the Government to reverse some of those measures to at least
release the real income or let them claw back some of that real income they have lost through
these measures. This would be equitable and fair and there would be a greater share of the
burden of responsibility. As a high-income earner, I would be happy to take on a greater
burden if necessary.
  It is often said that the true mark of an egalitarian society is how older people are treated.
This budget has clawed back the medical card for the over-70s and this is nothing short of a
disgrace. I will not use superlatives or come out with a soundbite but it is unfair on those
people. We had created expectations and put in place a system that people had become familiar
with. When they came to the autumn years of their lives they had the peace of mind of knowing
they could go to the GP when they wanted to and had that little entitlement when inflation
and the cost of living were increasing. They no longer have that little cushion. I call on the
Government to reverse that as an egalitarian and truly republican measure. If the Government
subscribes to those ideals it will reverse this measure.

  Deputy Ciaran Lynch: Listening to Deputy Sherlock speak and recalling how the Govern-
ment tried to wrap the green flag around itself one is reminded that “patriotism is the last
refuge of a scoundrel.” This Government has behaved like a scoundrel. Over the past couple
of days we have had an example of what happens when the entire future of a country is invested
in a pyramid scheme. The Government invested everybody’s hopes, aspirations and financial
future in a housing bubble. Like every other pyramid scheme, that bubble collapsed, leaving
ordinary people, as with every financial rip-off, carrying the can. I would like to talk about
some of those people, but before I do that I will digress.
   A couple of years ago I heard an old Chinese fable and I could not make sense of it until
the past couple of days. It is about a scorpion during a flood seeking a lift across a river from
a frog. The frog refuses, saying if he lets the scorpion on to his back the scorpion will sting and
kill him. The scorpion replies that if he does that they will both drown in the river. The frog
sees the logic, allows the scorpion on to his back and sets off across the river. Half way across
the scorpion stings the frog and they both begin to drown. When the frog asks the scorpion
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

why he did it, the scorpion replies that it is in his nature and he cannot help it. Such is the type
of Government we get from Fianna Fail. It is in the party’s nature and it cannot help it. Fianna
Fail cannot help ripping off the small guy and looking after the developers. While the Galway
Races tent is packed up in a Barna shed somewhere, the mentality is still alive.
   The Government told the public it was mending the roof and the country. That is easy to do
when the sun is shining. When it started to rain we found out it was doing nothing. I looked at
the Visitors Gallery today and saw 18 year old children. For the past 18 years those children
have been coming here and they would have seen a remarkable change in our country. Where
are they? A child born in 1989 is no better off in 2008 because, as Deputy Shortall pointed out
today, developments such as third level education are being undermined. The children’s allow-
ance that allows children to continue in the education system has been taken away. Even illness
benefit for a child is not paid until he or she is 18 years old. Undermining, undermining,
undermining. One must ask why, when there is a downturn in the economy, one which was
signalled for a number of years, the most vulnerable and the weakest are the first to be hit.
How does it make sense that taking a medical card from a 70 year old or an 80 year old will
give somebody a job sooner? It will not provide a single job.
   Before the budget, the Labour Party gave the Government a road map because this budget
has no strategy. We needed a budget that would create a job strategy with managing public
finances. This budget has done neither. We should have got a very clear strategy that would
have given the public confidence that there is a way out of the morass it caused. The Govern-
ment can blame international finances until the cows come home, but with its buddies it created
this property bubble, and it has fallen on top of all of us. The Government could have
redirected or restimulated the housing sector and the Labour Party put forward many options.
It could have provided educational and training options for people who are losing their jobs.
It could have made the social welfare system more flexible so that people are not waiting for
12 or 18 months to requalify to return to employment options.
  Last Saturday morning I heard the Minister, Deputy Brian Lenihan, trying to pretend he is
Roosevelt, talking about a “new deal” and saying we have nothing to fear but fear itself. To
use a Roosevelt term, he has pulled the social contract out from under people in this country.
People who have been paying social welfare contributions find from this morning they have to
pay twice the contributions they paid yesterday and they are entitled to only half the benefit.
For the past ten years we have had developer-led Government. What we need is Government-
led development. That is an entirely different concept. Like the scorpion on the frog’s back,
we will never get Government-led development from Fianna Fail. ´

                                                                   ´       ´           ´
   Minister for Community, Rural and Gaeltacht Affairs (Deputy Eamon O Cuıv): Ta mise ag
roinnt mo chuid ama leis an Aire Stait, an Teachta Curran. Time and again the Opposition
states the money was wasted in the past ten years, but the record is very different. In the past
ten years we reduced the national debt, which was extraordinarily high after the 1983-87 coali-
tion of Fine Gael and Labour. We dramatically reduced that until we had the lowest debt to
GDP ratio among Europe 15, other than Luxembourg. We went further. We put a huge amount
of money into the pension reserve fund, putting money aside for the future because we were
aware that the rate at which money was coming into the Exchequer could not continue indefin-
itely. We put money aside for the rainy day. We spent money on improving services. In every
school in the country one can find a large number of staff who would not have been there five,
ten, 15 or 20 years ago. I remember when a three-teacher school was literally a three-teacher
school. There was no support or ancillary staff. That has all changed dramatically.

  Deputy Jan O’Sullivan: Now the Government is setting it back.
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

            ´      ´
   Deputy Eamon O Cuıv: We are involved in the greatest ever investment in infrastructure in
this country. When we came to power \320 million was being spent on national roads. The
budget for 2009 is \1.9 billion. We were spending something paltry like \12 million on railways,
but now we are making major investment in light and heavy rail throughout the country. We
have provided our citizens with one of the best social welfare systems and pension rates any-
where in the developed world. Anybody who is used to dealing with people from other juris-
dictions, when he or she examines what people get, realises how good our social welfare system
is. That is where the money was spent and if that is what the Opposition Members consider
wasting money, let them stand on their record. We were right to invest the money in these
different ways and it was prudent.
  I also recognise this budget was difficult for people. In the past ten years we have had the
luxury of unprecedented economic growth. Year after year on budget day we could give more
and more and were always able to give more than we took away. However, no matter how
high the mountain, people want to go one step higher. It is a human desire. Therefore, I fully
accept it was a shock to people this year that in the difficult budget we had to announce
yesterday we had to ask the taxpayer for more than we could give. That was necessary to
protect into the long-term, distant future the quality of the services we have developed and,
particularly, to protect the vulnerable.

  Deputy Jan O’Sullivan: I see little evidence of protecting the vulnerable.

         ´       ´
  Deputy Eamon O Cuıv: It is amazing that for the Labour Party the vulnerable are not the
70% of people over 70 who need the medical card, it is the 6% with the high incomes.

  Deputy Jan O’Sullivan: Not at all.

          ´      ´
 Deputy Eamon O Cuıv: That is what worries the Labour Party because that is where the
Labour vote comes from. However, we will park that.

  Deputy Jan O’Sullivan: People with less than \300 will lose their medical cards.

         ´     ´
  Deputy Eamon O Cuıv: The Deputy is trying to create a fear factor.
   Virtually all reputable economists agree it was necessary for us to take the steps we took to
consolidate the gains we have made and to make sure they last into the future. However, when
one examines all the decisions made collectively, it is clear there were a number of basic aims.
The first was to protect those on social welfare, with a \500 million package. The second was
to protect those on lower incomes by putting a greater proportion of the burden on those
with higher incomes while at the same time not creating a disincentive for employment and
development. The third aim was to continue with the vast majority of the investment outlined
in the national development plan, including in schools and our road and rail networks.
   There are those who believe all our problems can be solved by reductions in cost of the
public service. Indeed, the Government has built in significant savings in the cost of the public
service for next year. However, it is insulting and grossly inaccurate for people to infer that
most public service workers are either unproductive or underemployed. Having worked with
public servants for many years I wish to state that my experience has been that many of them
go way beyond the call of duty. Any time I have asked public servants to attend meetings at
night, they have done so without question and with no additional remuneration. Of course
there are people in the public service who do not deliver but that is true in all situations where
thousands are employed. There will always be a few who are not pulling their weight. However,
I have met many public servants who go way beyond the call of duty and who more than make
up for those who might be less than productive.
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

  The Government is making radical changes and I have announced a number in my own
Department. There is no question that all of us can create efficiencies. In the past three years
I have set about amalgamating the Leader and partnership companies. It was a slow process
and I thank some Opposition Deputies for their enormous support in this regard. The amalga-
mation was necessary because there was duplication of effort between the two organisations.
Likewise, I amalgamated Bord na Gaeilge with Foras na Gaeilge because there was no need
for a free-standing board in that case.
  I have no doubt that in the coming months, however, as decisions are made by the Govern-
ment and put into action in the wider public service, that despite present calls for even more
radical action, we will be inundated with representations from Opposition Deputies to preserve
the jobs and conditions of employment of those in the public service. I hope I am wrong and
that the Opposition shows consistency in this case and supports the necessary measures we will
take to ensure we have the best public service in the world.
  There has been a well-orchestrated campaign in the last few weeks to convince people that
decentralisation is at an end, with references by the Labour Party to phantom civil servants
and so forth. Even last night, certain media headlines were claiming the programme had been
abandoned. Like Mark Twain, the rumours of the demise of decentralisation were greatly
exaggerated and the facts speak for themselves. To date, 2,500 people have already
decentralised and progress will be made immediately with the decentralisation of another 3,500
people, making this by far the most ambitious decentralisation programme ever, with the head-
quarters of numerous Departments relocating to various parts of the country.
   I recognise we have deferred the relocation of the final 4,000 posts for reconsideration in
2011. In the current circumstances, this was a wise decision. However, this should not detract
from what has been achieved and the benefits it has brought to many communities around the
country. It is interesting to note that one of the happiest campers in the Dail yesterday evening
was an Opposition Deputy who has seen at first hand the benefits of decentralisation, not too
far from Deputy Devins’s part of the world. He said to me “Fair play — you are providing the
jobs”, and I am.

  Deputy Michael Noonan: The Minister is transferring the jobs.

         ´     ´
  Deputy Eamon O Cuıv: I am transferring them from Dublin.

  Deputy Michael Noonan: Yes. The Minister is not providing the jobs, he is simply transfer-
ring them.

          ´        ´
  Deputy Eamon O Cuıv: I am providing jobs in Counties Mayo, Sligo and other places where
they did not exist before.

  Deputy Leo Varadkar: There are better ways to spend the Department’s capital budget.

          ´       ´
 Deputy Eamon O Cuıv: If Fine Gael was in power, according to what its members say, it
would abolish the whole public service.

  Deputy Leo Varadkar: We would certainly abolish the Minister’s Department.

            ´        ´
  Deputy Eamon O Cuıv: Based on the realities, my Department could not have expected to
receive the same money in 2009 as it received in 2008, and therefore, I had to make some
difficult decisions. That was inevitable.
                              ´             ´                       ´´ ´       ´          ´
  I gcoinne na cinnithe sin, ta cinneadh deanta againn na seirbhısı ata ar fail don ghnath-
                                        ´       ´         ´       ´        ´
phobail a chosaint, chomh fada agus is feidir. Deanfaimid e sin trı chinntiu, chomh fada agus
            Financial Resolution No. 15:   15 October 2008.          (General) Resumed

          ´     ´   ´
  [Deputy Eamon O Cuıv.]
    ´            ´          ´ ´      ´        ´   ´                           ´
is feidir, go ndeanfar an tsabhail trı laghdu a dheanamh ar na costais, no forchostais, a bhaine-
               ´                       ´ ´ ´               ´             ´
ann leis na sceimeanna a riaradh. Ta se raite agam le la anuas go ndeanfaimid gearradh siar ar
                      ´                                                    ´´        ´
na forchostais sin. Deanfaimid cinnte de go leanfaimid ag chur seirbhısı idirghabhalacha ar fail´
                                 ´          ´       ´     ´    ´             ´   ´            ´
do chuid de na pobail is leochailı agus is tabhachtaı sa tır. Deanfar laghdu iomlan de 6% ar Vota
                          ´                     ´                   ´                    ´
na Roinne. Beidh laghdu de 5% ar mhaoiniu reatha agus laghdu de 8.5% ar mhaoiniu caipitil.
                   ´      ´         ´                         ´       ´ ´ ´
    Ainneoin sin, ta na prıomh-chlair ag dul ar aghaidh go laidir i gconaı. Nı bheidh aon laghdu´
        ´                       ´                                     ´      ´
ar an lıon daoine — 2,600 i lathair na huaire — fostaithe faoin sceim shoisialta tuaithe, mar
             ´      ´        ´                            ´              ´                ´ ´
shampla. Ta an sceim ag deanamh an-leas don dream ata ag glacadh pairt inti. Freisin, ta se ag
  ´                                          ´                                       ´
deanamh an-leas dos na pobail tuaithe. Deanfar a thuilleadh forbartha ar an gclar sheirbhısı   ´´
               ´       ´                ´        ´          ´
pobail. Faoi lathair, ta 355 tionscadal a maoiniu faoin gclar, agus thart ar 1,800 duine ag obair
          ´ ´            ´ ´          ´                                           ´          ´
iontu. Meadofar na figiurı sin go dtı thart ar 2,100 duine agus 440 tionscadal. Deanfaimid e sin
  ´        ´         ´            ´                             ´                 ´
trı bainistıocht churamach a dheanamh ar an airgead. Ar ndoigh, beidh na sceimeanna sin a       ´
riaradh an bhliain seo chugainn.
                                     ´                           ´
   Cuireann mo Roinn airgead ar fail le haghaidh infreastruchtur i gcuid de na ceantair is mo    ´
       ´      ´        ´       ´                             ´       ´      ´   ´
faoi mıbhuntaiste sa tır. Taimid ag caint mar gheall ar mıbhuntaiste tıreolaıochta i gcas na´
                             ´   ´              ´            ´            ´
gceantair tuaithe, agus mıbhuntaiste eacnamaıochta agus soisialta i gcas na ceantair RAPID.
  ´        ´    ´    ´                        ´            ´       ´                           ´
Ta maoiniu ar fail arıs i 2009. Mar shampla, ta \24.5 milliun ar fail le haghaidh infreastruchtur
faoi CLA ´ R agus RAPID. Ar ndoigh, bıonn na sceimeanna sin in ann an-chuid airgead eile a
                                   ´    ´          ´
                           ´                          ´                     ´     ´
tharraingt chucu chun deanamh cinnte de go gcuirfı bun-infreastruchtur ar fail sna ceantair
´    ´
                     ´                      ´     ´          ´        ´       ´
   Idir infreastruchtur Gaeltachta agus oileain, ta \35 milliun — an meid is mo airgead a chuire-
          ´              ´  ´               ´                                          ´
adh ar fail le bliain no dho anuas — ar fail. Leanfar le chuid dos na tionscadail mora ata ar ´
                   ´          ´     ´                ´           ´          ´
bun. I mbliana, taimid ag crıochnu an obair ollmhor, idir aerstraiceanna, ceanna agus dreideail,´
     ´                  ´        ´     ´          ´                 ´                       ´
a bhı ar bun ar Inis Bo Finne. Ta an ce nua a thogadh ar Inis Meain le n-oscailt i gceann mıosa.
  ´                    ´                      ´                    ´    ´              ´ ´
Ta an tionscadal is mo Gaeltachta agus oileanda riamh — leathnu na ceibhe ar Inis Mor Arainn
                                  ´           ´ ´
— tosnaithe. Is tionscadal gur fiu \40 milliun e.

                                             ´ ´
  Deputy Dinny McGinley: Cad mar gheall ar Thoraı?

           ´        ´        ´ ´
  Deputy Eamon O Cuıv: Ta se sin go h-ard ar na buaiceanna againn, a luaithe agus go mbeidh
              ´            ´       ´ ´ ´              ´          ´              ´   ´ ´
an ceannacht eigeantach deanta. Ta se raite agam arıs agus arıs eile, agus duirt me e ar Raidio   ´
                                   ´     ´ ´                ´        ´   ´
na Gaeltachta inniu, go bhfuil Oilean Thoraı agus Inis Oırr ar an da chead rud eile ar an gclar.´
  ´           ´                             ´            ´                   ´          ´ ´
Ta \25 mhilliun de chaipitil d’airgead oileanda an chead bhliain eile. Bhı siad i gconaı chun
dul ag titim i mbliana mar go bhfuil cuid mhaith de na tionscadail mora curtha i gcrıoch.     ´
                      ´              ´             ´      ´ ´      ´           ´            ´
Aisteach go leor, nı hiad na haerstraice is costaisı le togail. Togann aerstraice \4 mhilliun no  ´
         ´        ´      ´                  ´
\5 mhilliun, ach ta na ceibheanna i bhfad nıos daoire mar is eol don Teachta.

                                    ´ ´          ´              ´
  Deputy Dinny McGinley: An mbeidh se a chur ar fail i mbliana no an bhliain seo chugainn?

         ´       ´        ´ ´                            ´            ´
 Deputy Eamon O Cuıv: Ta suil agam go mbeidh, agus taim ag cur bru an t-am ar fad ar
                    ´                                             ´              ´
Chomhairle Contae Thır Chonaill dul ar aghaidh agus an cheannacht eigeantach a dheanamh.
                                                                     ´  ´                     ´
   Ba mhaith liom a lua freisin nach mbainfidh an dleacht \2 a fograıodh do thurais eitlean leis
             ´´           ´        ´                ´                               ´´
na seirbhısı aeir go dtı na h-oileain, mar ar ndoigh, is riachtanais iad na seirbhısı sin, seachas
  ´ ´ ´ ´
solaistı. Sılim go bhfuil sin cothrom.
                  ´   ´                                                               ´
   Maidir le hUdaras na Gaeltachta agus an Ghaeilge sa Ghaeltacht, beidh laghdu substaintiul      ´
         ´            ´      ´   ´                            ´    ´
i mbuisead riarachain an udarais. Creidim go mbeidh an udaras in ann sin a sheasamh. Beidh
                    ´ ´ ´      ´                  ´
cinnithe agus sabhailtı le deanamh acu, ach ma chuireann siad chuige, beidh siad in ann iad a
                        ´              ´                                               ´
sheasamh. Beidh me ag casadh le prıomh fheidhmeannach agus cathaoirleach an udarais len e   ´       ´
           ´    ´                       ´             ´    ´              ´   ´           ´
sin a phle amarach. Maidir leis an gclar caipitil, seard ata gheallta don udaras thar an da bhliain,
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

  ´          ´     ´ ´                        ´                                                ´
na \45 milliun. Ta se i gceist anois \2 mhilliun breise a chur le hairgead na bliana seo agus ta
       ´          ´                                   ´                            ´   ´
laghdu \1.5 milliun don bhliain seo chugainn. Ciallaıonn sin go mbeidh \0.5 milliun nıos mo a´ ´
 ´         ´   ´           ´
fail ag an udaras thar an da bhliain le haghaidh caiteachas reatha.
                ´              ´                           ´ ´                     ´ ´
   Baineann gne shubstaintiuil d’obair mo Roinne le cursaı Thuaidh-Theas. Ta athas orm a
   ´              ´   ´      ´
fhogairt anseo trathnona, o thaobh An Foras Teanga agus Uiscebhealaı E     ´ ´ ireann, go mbeidh
       ´  ´              ´        ´                                     ´     ´
an meid ceanna airgid a chur ar fail an bhliain seo chugainn agus a bhı ar fail i mbliana. Nuair
                    ´                                                    ´
              a thainig mise isteach sa Roinn sa bhliain 2003, an chead bhliain iomlan don´
8 o’clock                  ´   ´                                   ´
              Roinn Gnothaı Pobail, Tuaithe agus Gaeltachta, mas buan mo chuimhne thart ar
                           ´   ´         ´       ´               ´         ´
              \230 milliun no \240 milliun a bhı ag an Roinn. Seard a bheas ann an bhliain seo
            ´           ´      ´  ´ ´                  ´              ´                ´
chugainn na \520 milliun. Fiu ag togail boilscithe san aireamh, taispeanann sin an meid ollmhor´
ata tagtha ar chaiteachas na Roinne.
   It is amazing how people forget the way it was in the past. When I came into the Department
in 1997, the total capital allocation for the islands was \1 million. This year, despite a slight
decrease, it is \25 million. In 2003, the budget of the Department was less than half of what it
is today. There will not be as much money available next year and there will be a small
reduction. However, when it is put in the context of how far we have gone so fast, I believe
with careful management of the money we can achieve great benefits next year.
  The rural development programme to be announced in the coming weeks will be the largest
rural development programme ever and will involve an investment of \425 million. It will be
almost three times the size of the programme which ran from 2000 to 2006. The programme
will be rolled out between 2009 and 2013. Within this programme are major opportunities for
people to develop rural areas and overcome some of the challenges they face at present.
  As Minister, I will continue to focus on urban deprivation in which we face major challenges,
some financial and some social. I will continue to make a major commitment in time and effort
to the RAPID programme which is slowly but surely acquiring the confidence of the people in
the communities affected. We will continue to roll out the programme as vigorously as ever.

  Minister of State at the Department of Community, Rural and Gaeltacht Affairs (Deputy
John Curran): The Department of Community, Rural and Gaeltacht Affairs has always been
focused on helping disadvantaged people by supporting communities throughout the country.
This disadvantage, whether in urban or rural areas, can come in a range of forms from social
exclusion to communities damaged by drugs problems.
   I remain committed to the local development social inclusion programme and the community
development programme and to the communities they serve. The range of social inclusion
programmes, including the local development social inclusion and the community development
programme have made a considerable contribution to the tasks of countering disadvantage and
in promoting equality and social and economic inclusion.
  The high numbers of communities and individuals supported by the programmes since their
inception is the result of the hard work, commitment and co-operation not only of the personnel
of partnerships but of the boards of partnerships and the boards of the community development
projects and their inclusive representation in many cases from the State, social partners, elected
representatives and, perhaps most important of all, the community sector. The key to the
success of many social inclusion programmes is due in no small part to the input and commit-
ment from individuals and community groups from all over the country.
   Active citizenship is the key to success with each resident considering what he or she can do
to bring about the changes needed to access opportunities and to enhance community life. This
is at the core of the principle underpinning all social inclusion programmes and initiatives.
Community and voluntary activity is at the centre of a vibrant and inclusive society and the
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

  [Deputy John Curran.]
Government recognizes the invaluable role it plays. The Government is committed to the
principles underpinning the relationship between the State and the sector as set out in the
White Paper on supporting voluntary activity, as well as taking on board the work of the
task force on active citizenship. By building on our experience of community consultation and
participation, we can continue to improve the delivery of necessary supports to local com-
   However, in a vastly changed and ever changing economic and social environment, the con-
cept and reality of “community” are not what they were when this and other programmes
started out. Our society, our family unit and by extension, our communities are now much
more diverse. Programmes such as this, need to adapt to this new diversity and to new and
emerging trends in as full and inclusive a way as possible. In the current economic environment,
there is an ongoing need to ensure that resources are directed in a targeted and effective
manner and that we constantly subject our activities to critical appraisal. In this way we can
continue to ensure that those we work to assist will receive the maximum benefit.
   I pay a special tribute to the countless volunteer members of local boards of management of
community projects. Often working with limited resources, they put in many hours of voluntary
effort for the good of the people in their neighbourhoods. We need to cherish the values that
inform and drive those who have taken upon themselves the responsibility for the development
of their community, their locality, and the promotion of social inclusion. We are entering a
difficult period, but with prudent management of our scarce resources, I look forward with
confidence to the further successes that the local and community development programmes
will bring over the next year.
   There will be continued support for the elderly through the community support to older
people scheme. This scheme has been successful in supporting community groups to provide
essential security items for older people living at home. Funds are made available for socially
monitored alarms; smoke alarms; door and window security; emergency external lighting and
a range of other personal security equipment. Last week, I was in Kerry where Muintir na Tıre
held a community awareness week. I was asked about the scheme and I stated the scheme of
grants in place would remain in place. It could easily have been withdrawn but I have seen its
benefits first hand.
   I have increased the provision to \3.5 million for 2009 in line with the level of demand
evident in recent years. This scheme is modest in the overall context of the budget and even
in the context of the broad range of funding provided for the community and voluntary sector.
However, it is one area that clearly delivers front line services to those older people in our
urban and rural communities most in need of reassurances and protection in their homes.
  My Department, through its funding to voluntary and community groups, also supports a
growing variety of opportunities for citizens to get involved in a task or organisation that
appeals to them. Yesterday, I had a very useful discussion in the Seanad on the role of volun-
teering in Ireland. During this discussion, the immense contribution of volunteers to society
was highlighted on all sides of the House.
  I recently attended a number of “Give It A Swirl Day” events, an initiative promoted by
Volunteer Centres Ireland through its members around the country, and it is a great example
of an innovative approach to encouraging people of all ages and from all walks of life, individ-
uals, families, community groups and businesses, to get involved for just a few hours, in a
hands-on volunteer project in their local community. The events held throughout the country
include activities such as community clean-ups, tree planting, decorating homes for the elderly
and painting murals. Other initiatives assist sporting organisations like the GAA to develop
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

opportunities for volunteers in local clubs and to engage with other voluntary groups to achieve
wider community objectives.
  This network of volunteer centres across the country is funded by my Department and now
provides annual funding of approximately \2.5 million to 20 such centres located throughout
the country. So far this year, these volunteer centres have registered more than 5,660 volunteers
and more than 800 volunteer-involving organisations. It should also be noted that 56% of
registered volunteers had never volunteered before and 70% are aged 35 years and under. We
often roll out new initiatives and let them off. However, we took the view in the Department
that this initiative needs to be critically monitored and evaluated from an early stage to achieve
best practice, high standards and the roll-out of volunteer centres on a national basis.
  I am aware that in the current economic climate difficult decisions need to be made and
compromise is required. However, this does not signal in any way an end to progress in the
implementation of the national drugs strategy. Rather, it means that all involved will have to
continue to build on the progress made to date and be innovative in our response to the ever-
changing patterns of drug misuse.
   The partnership approach, which underpins the strategy, involves statutory agencies working
together with the community and voluntary sectors to combat the problems associated with
substance misuse in our communities. Collaboration, a key element in our achievements so far,
has made a significant contribution to the roll-out and effective running of drugs programmes.
I am confident that together we can continue to build on these achievements.
  Investment is set to continue and over \61 million has been allocated in the Department’s
Vote for 2009. However, this represents only part of an overall allocation of over \200 million,
provided by the Government across several Departments and agencies, to tackle the drugs
problem this year. As I keep pointing out, tackling drug misuse requires a multi-agency, part-
nership approach and we must not lose sight of this with the publication of the 2009 Estimates.
The Department of Community, Rural and Gaeltacht Affairs does not work in isolation and
the Government is continuing to invest in the drugs strategy across the relevant Departments
and agencies.
  Funding from my Department is provided annually for the projects operating in the local
and regional drugs taskforce areas under their respective plans, including those under the
emerging needs fund. Funding will continue in 2009 for projects targeting services for particular
communities and areas of need ranging from treatment, rehabilitation and prevention to supply
reduction, education and research. In 2009, funding will also continue to be targeted at initiat-
ives introduced in 2008. This will cover new responses to cocaine misuse across the taskforce
areas. It will also cover measures to strengthen and deepen existing cocaine specific projects,
as well as others aimed at polydrug-cocaine use in taskforce areas. Cocaine remains a significant
problem that touches all levels of society but has a disproportionate effect on areas of disadvan-
tage. I am delighted, therefore, that my Department is investing in this initiative.
   I am also making funding available in 2009 under the rehabilitation initiative introduced in
2008. This measure, which is also taskforce led, will assist recovering drug misusers to regain
their capacity for daily life, allowing them to reintegrate into their families and communities
and begin to lead more meaningful lives again. It also represents a step towards the implemen-
tation of the recommendations in the report of the working group on drugs rehabilitation,
published last year. It made a series of recommendations for the development of a comprehen-
sive rehabilitation pillar under the drugs strategy.
  The Health Service Executive will take the lead role in the implementation of these recom-
mendations. A national drugs rehabilitation implementation committee is in the process of
being put in place to dovetail with the appointment by the Health Service Executive of a senior
            Financial Resolution No. 15:   15 October 2008.       (General) Resumed

  [Deputy John Curran.]
rehabilitation co-ordinator who will chair it. The first meeting of the committee will be held
on 6 November. It is envisaged the working group recommendations will be implemented over
several years, depending in part on the funding available.
  With regard to the young people’s facilities and services fund, my Department is progressing
arrangements to transfer the functions and duties relating to the fund to the Office of the
Minister for Children and Youth Affairs. The fund’s integration into that office will provide a
cohesive and comprehensive response to the needs of all young people, including those at risk
of drug misuse.
  My Department has also addressed the needs of young people in the areas not covered by
the young people’s facilities and services fund. Under the regional youth initiative, capital
funding of over \2 million will be provided for the development of 16 dedicated youth facilities
where the young people’s facilities and services fund does not operate.
  My Department has also made provision in 2009 for the valuable work of the national advis-
ory committee on drugs, the research arm of the drugs strategy. I expect to continue to provide
a grant to support the work of the national drug documentation centre which operates under
the aegis of the alcohol and drug research unit of the Health Research Board.
   The period covered by the current national drugs strategy comes to a close at the end of this
year. My Department, aided by a steering group made up of representatives of the various
interested parties, is working on the development of the new strategy for 2009 to 2016. It is
vital to get the new strategy right and to have relevant targets, demanding but achievable, with
the optimum structures in place to facilitate their implementation.
  While I am aware of the current economic climate, I intend to strive to ensure that as many
as possible of the concerns voiced during the comprehensive consultation process undertaken
by my Department, particularly at the 15 public meetings held around the country, are taken
on board. I will also be placing great emphasis on ensuring that addressing the problem of
substance misuse remains a priority for all key Departments and agencies involved in the
delivery of the new strategy, which I hope to launch in early 2009.
   While recognising that reduced funding is available to my Department, it is my objective to
ensure maximum funding is directed to frontline services. To achieve this, my Department will
not be entering into new contracts to provide support services to community development
projects. These supports will now be provided directly by staff in my Department. Further
efficiencies will be achieved by reducing our Department’s dependence on the use of outside
agencies. Specifically some work being carried out by Pobal on behalf of the Department will
revert to the Department. Maximum funding will be provided to frontline services such as
partnerships, community development programmes and drugs taskforces. Savings will be made
in administration through the Department.

  Deputy Michael Noonan: I wish to share time with Deputy Leo Varadkar.

  Acting Chairman (Deputy Brian O’Shea): Is that agreed? Agreed.

  Deputy Michael Noonan: This is a rough budget. It is rough on the vulnerable, the poor,
children, their parents and teachers. It is particularly rough on the elderly where many of the
supports they had come to rely on are being removed without notice. It is also rough in its
construction, showing all the signs of a hastily produced document. Many Ministers, even those
with a certain competence in economic matters, were not able to explain details of the budget
in either last night’s or today’s debates on the financial resolutions. There have been four
different explanations as to how nursing home fees will be treated for tax purposes in the
            Financial Resolution No. 15:   15 October 2008.         (General) Resumed

future, with no satisfactory explanation yet. In the late afternoon, the Minister for Health and
Children, Deputy Mary Harney, was forced to back down on the 2% health levy which would
now apply to the over 70s who are no longer exempt because they possess a medical card. It
is a rough budget in every respect.
   One reason it is rough is that its date was conceived as a public relations stunt. There is very
little in it which will come into effect until 1 January 2009. There was no reason, therefore, for
bringing the date forward. We could easily be debating this budget in the first week in
December and it would make no difference to the fiscal position. However, after a period of
inactivity since the Taoiseach was elected and throughout the summer, the Government needed
to show it was in charge, in command, busy about the nation’s business. So we had this public
relations stroke to bring the budget forward. The stroke went sour because the budget date
more or less coincided with both the domestic and international financial and banking crises.
That must have put enormous pressure on the key officials, particularly those in the Depart-
ment of Finance, and the key Ministers. As a consequence, we have had a roughly hewn
document which was not subjected to the normal proofing and scrutiny that would apply if the
budget was delivered at the normal time.
  Another problem with the budget, which is based on a fallacy, is the suggestion that somehow
or other the crisis is connected to the banking and financial crisis, which it is not. If the banks
were as sound as the Bank of Ireland used to be in the olden days and if there was no problem
in any international bank and no liquidity or credit problems anywhere in the world, Ireland
would still have a major fiscal problem because revenue receipts no longer match expenditure
and the gap is widening. It is a separate matter, yet Ministers have tried to wrap both issues
together. They have tried to excuse their incompetence over the years by pretending that this
budget and the problems it deems to address were a by-product of a wider financial crisis. They
are not. This is a stand-alone crisis.
   Another fallacy is that nobody saw this coming and that suddenly, in July, the ground opened
under Ministers’ feet and they had to introduce emergency measures before the summer recess,
cutting expenditure by \400 million to balance the books for 2008. There was another cataclysm
after the summer when they saw things were going wrong for 2009 so they had to advance the
budget date. That is all bogus, however, because this situation was well flagged. It was flagged
in this House and by economists. The then Minister for Finance, who is now the Taoiseach,
did not take action because he had a political agenda within the Fianna Fail Party. He did not
want to be the Minister for Finance who had to deal with these issues, but the issue was there
over 12 months ago. When the former Minister for Finance came into this House on 27 June
2007 and introduced the Finance (No. 2) Bill 2007, we told him there was an emerging deficit
that needed to be bridged. The Bill contained the paltry measures he took on stamp duty after
the election. I stood here on that day and saw the Minister for Defence, Deputy O’Dea, sitting
beside the then Minister for Finance. I told him that the figures from the Cental Statistics
Office were out and that housing starts for each month from the start of the year were down
dramatically. As night follows day, if housing starts are down in 2007, housing completions will
be down in 2008. I told him, and he knew, the rule of thumb was that for every 10,000 fewer
housing completions, \1 billion less comes into the Exchequer. The figure was falling from
90,000 houses and was heading down to approximately 45,000. It is heading down to 25,000 for
2009. The Minister of State can do the calculations for himself.
  I asked the former Minister for Finance to introduce a White Paper in the autumn to show
how he would bridge the emerging fiscal deficit. In his reply, he dismissed me in the way he
always treats intellectual inferiors. Of course, that would not upset anyone because in the
Taoiseach’s world everybody from the Fastnet to the Cliffs of Moher and up to the Giant’s
Causeway is an intellectual inferior so we were part of a fairly large group. The Taoiseach
            Financial Resolution No. 15:   15 October 2008.        (General) Resumed

  [Deputy Michael Noonan.]
knew, however. He is shrewd and understands finances. He knew what I and other Deputies
were talking about, but he chose not to deal with it because he was running a different politi-
cal agenda.
  Like all Ministers for Finance, the current Minister had three choices to bridge the gap
between receipts and expenditure. He could tax, borrow or cut expenditure, and they are all
connected. In my view and the view of many people outside this House, he is borrowing and
taxing too much, while not cutting enough. It is as simple as that. One may ask where the
Minister could make more cuts, but what he is doing now is unsustainable because he is driving
the country further into recession. There is no chance that we can tax, cut and borrow our way
out of this problem. The only way out of this problem is to grow our way out of it. As the
country goes back on a growth path, the revenue will be yielded once more that will match the
expenditure we desire to make. That is the only way out of this. It was the only way out of it
in the 1980s and it is the lesson of the 1990s. Unless we get the country back on that growth
path again we will have no chance. Instead of going back on that growth path, however, the
Minister is making things worse. In simple economic terms, if one takes \2 billion of spending
power, which is the tax imposition of this budget, out of consumers’ pockets and transfers it to
the Government, there is a problem. That money will not be spent by consumers, which will
deepen the recession. That is the difficulty the Minister is facing.
  We had two phases of the Celtic tiger. The first phase was the genuine Irish fairy story, the
real success story, whereby the model was based on a competitive society. Labour costs were
low, there was great output and productivity by Irish workers and the cost of utilities and other
facilities was competitive. We had export-led growth and were successful in manufacturing
industry and internationally traded services. Our employment rate increased from about 1.1
million to over 2 million.
   We then had the false model whereby we became uncompetitive and the Government drove
the country by over-stimulating the building industry. That bubble has now burst so we must
get back to the path of growth, which yielded results in revenue, employment and living stan-
dards which we all enjoyed. Without a strategy for growth, however, we will go nowhere. There
is no such strategy in this budget, apart from one item, an increase in the provision for research
and development in industry, whereby the tax credit goes from 20% to 25%. That is welcome
but it stands out like a lighthouse in a bog as the single item to encourage industry back to the
path of the 1990s when we had a really competitive economy based on internationally traded
goods and services. That is where we have to get back to, but we are not going there with this
budget. Far too much — \2 billion — is being raised in taxes and there is far too much bor-
rowing. The borrowing levels are frightening. Over 16 months the position has deteriorated by
about \20 billion, which is scary. Just because the Minister receives a standing ovation for
introducing a budget, it does not mean the trajectory is stopping.
  The trend is downwards, while borrowing is rising, but the budget will not stop it. It collects
\2 billion extra and gives the Minister permission to borrow, but he will be borrowing about
\12.5 billion in 2009. This is crazy stuff. The GDP-debt ratio was approximately 25% this year
and it will be 43% next year, which is some jump. The year after it will get worse. Anybody
on the Fianna Fail backbenches who thinks this is a once-off story should think again. For
reference, they might examine the Taoiseach’s speech this morning in which he stated that he
wants to:

  establish a long-term sustainable path, whereby day-to-day expenditure corresponds to tax
  receipts. As tax revenues are 10% less than expected for this year, with little improvement
  in that position assumed for next year, that can only be done progressively over time.
                   Cork Cystic            15 October 2008.           Fibrosis Services

The Taoiseach wants to bring the budget back into balance and suggests he will do so by taxing,
making up the 10% gap by further taxes. It is in his speech that we will not have this big gap
forever, but that is for the lads in Europe.

  Debate adjourned.

                                     Adjournment Debate.


                                  Cork Cystic Fibrosis Services.
   Deputy Michael McGrath: Ireland has the highest rate of cystic fibrosis in the world and one
of the lowest life expectancy rates for cystic fibrosis patients. While there is no official data on
life expectancy of cystic fibrosis patients in Ireland, it is clear that we lag behind many other
developed countries in life expectancy for cystic fibrosis patients.
   In an effort to change this, family and friends of cystic fibrosis patients in Cork and Kerry
founded a group called Build4Life. The aim of Build4Life is to raise awareness of cystic fibrosis
in the region and to raise over \1 million for a dedicated adult cystic fibrosis treatment unit at
Cork University Hospital. I am pleased to say that after an enormous amount of voluntary
effort, the Build4Life campaign has already raised over \1.3 million.
  A statement of need for the provision of these dedicated cystic facilities has been passed by
the executive management board at Cork University Hospital, and it is now up to the Health
Service Executive to progress the project. It is expected there will be 150 adult cystic fibrosis
patients in Cork and Kerry alone by the end of next year. I understand the statement of
need provides for an adult day centre for adult cystic fibrosis patients and 11 isolated units
for patients.
  I emphasise that the multidisciplinary medical team is already in place for the treatment of
adult cystic fibrosis patients at Cork University Hospital. Dr. Barry Plant, a respiratory consult-
ant with particular focus on cystic fibrosis, is driving the initiative within the hospital for the
provision of dedicated facilities for cystic fibrosis patients. The team also comprises a paediatric
respiratory consultant, adult and paediatric nurses, physiotherapists and dieticians. In addition,
the Cystic Fibrosis Association of Ireland is funding a registrar post at Cork University Hospital
this year and, hopefully, next year as well. Essentially, the multidisciplinary team is already in
place and the patients are being treated, but not in a suitable and appropriate environment.
  The Build4Life campaign is calling on the HSE to identify an area within the hospital campus
which would be suitable for the provision of these dedicated cystic fibrosis facilities. This is
absolutely essential because cystic fibrosis patients are at serious risk of cross-infection on an
ongoing basis, which results in many visits to hospital. At present, cystic fibrosis patients must
be admitted to hospital through the accident and emergency department, which leaves the
patients exposed to infections which can be life threatening, given their condition. One in 19
people in Ireland carries the cystic fibrosis gene. If two persons with the gene have a child, that
child has a one-in-four chance of having cystic fibrosis. There are many families who have more
than one child with cystic fibrosis. I believe that the HSE has an obligation to respond to the
extraordinary voluntary initiative taken by everyone associated in the Build4Life campaign in
Cork and Kerry, and I ask the HSE as a matter of priority to identify an area within Cork
University Hospital where these facilities can be provided.
   The Pollock report of 2005 demonstrated clearly that the majority of adults with cystic
fibrosis in Ireland are being treated in facilities that are dangerous. The report was extremely
critical of the lack of segregation and isolation facilities throughout the country. The report
                  Cork Cystic             15 October 2008.          Fibrosis Services

  [Deputy Michael McGrath.]
recommended the development of a small number of dedicated cystic fibrosis centres around
the country.
   Life expectancy for cystic fibrosis patients in other European countries and in the United
States is in the 40s and 50s, with many patients living with cystic fibrosis and leading healthy
and productive lives well into their 60s. As the country with the highest incidence of cystic
fibrosis in the world, we should become the world leaders in services and facilities for cystic
fibrosis patients, and I hope that the Minister will have a positive response on the development
of such facilities at Cork University Hospital.

  Minister of State at the Department of Education and Science (Deputy Sean Haughey): I
will be taking this matter on behalf of my colleague, the Minister for Health and Children,
Deputy Harney.
   There are currently approximately 1,100 people living with cystic fibrosis in Ireland. Approxi-
mately 45% of these people are adults and 55% are children. The Minister has identified the
development of cystic fibrosis services as a policy priority in recent years. In 2006 and 2007,
additional revenue funding of \6.78 million was provided to the Health Service Executive to
develop cystic services. Part of this funding has facilitated the appointment of 44 staff to date
to deal directly with cystic fibrosis in a number of hospitals nationally, including Cork Univer-
sity Hospital. In addition, the necessary funding has been made available to facilitate the
recruitment of a further 37 staff nationally. The other hospitals which have benefited from this
funding include five in Dublin — St. Vincent’s, Crumlin, Tallaght, Beaumont and Temple Street
— together with Galway, Limerick and Waterford.
   Cork University Hospital currently provides both adult and paediatric cystic fibrosis services.
It is one of very few hospitals that have both services on the same site. There has been a
significant investment in the resource allocated to enhancing cystic fibrosis services at Cork
University Hospital over the past number of years. In excess of \700,000 in additional revenue
funding was provided to the hospital in 2006 and was used to recruit two new medical consult-
ants, one to lead an adult service and the other to lead a paediatric service. The consultant for
adult service took up his post in August 2007. Interviews for the second post were held but did
not result in the selection of a suitable candidate for permanent appointment. The post is
currently filled in a temporary capacity pending its filling on a permanent basis.
   Additional nursing, allied health professional and clerical support staff have also been
recruited for cystic services in Cork University Hospital. In 2007 the HSE southern hospitals
group received an additional revenue allocation of \293,000. This funding will be used to recruit
a medical scientist to support the provision of microbiology services and to advise on infection
status and antibiotic susceptibility of people with cystic fibrosis. The funding will also help to
enhance nursing and physiotherapy support services with the planned recruitment of two
further nurse specialists and a physiotherapist for cystic fibrosis patients.
   The HSE has informed the Minister for Health and Children that it is currently considering
the provision in Cork University Hospital of a new dedicated facility for patients with cystic
fibrosis. This would include inpatient beds, a dedicated day unit and a respiratory ward to
accommodate the caseload of adult patients, and the necessary multidisciplinary team, and
enable cystic fibrosis services to be delivered in line with best practice. A new facility would
also provide a pathway for existing paediatric patients to move to adult care within the same
setting and with many shared staff.
  The Minister understands that Cork University Hospital has been in discussion with the
Build4Life programme, a charitable organisation which is proposing to donate up to \1 million
towards a dedicated cystic fibrosis unit at the hospital. The pace at which such developments
                    School                15 October 2008.             Staffing

can take place will, of course, depend on the availability of the capital and revenue funding,
but the Minister and the HSE are committed to ensuring the best possible service for patents
in the Cork area.

                                        School Staffing.
  Deputy John O’Mahony: I thank the Ceann Comhairle for selecting for the Adjournment
this serious situation created by the withdrawal of the visiting teacher for visually-impaired
students in County Mayo. This service was already restricted but nonetheless invaluable to the
45 visually-impaired students attending schools in County Mayo. Each school where there was
a student or students with visual impairment was visited, probably just once a term, so that
they could get the help and advice needed.
   The visiting teacher was withdrawn in September and replaced by a telephone consultation
advice service on each Monday for two hours. We have all been hearing about the cutbacks in
education after yesterday’s budget, but the withdrawal of the visiting teacher in County Mayo
came two months ago and is especially miserable because it takes away what was only a partial
service in the first place. This is a cutback on top of a cutback. We have been assured that the
savings introduced by the Minister will not affect the disadvantaged and the vulnerable. There
is evidence to the contrary in this instance. The amount of money needed to restore the partial
service that existed before September would be only minute in the great scheme of things.
   This service is critical to the education of children with visual impairment. It is of vital
importance not only to the affected student but also to the teacher and the student’s classmates.
Everyone is made aware of the difficulties a visually impaired child can face. Advice is also
given on the teaching tools and computer technology that can be of great assistance. I was
visited by the parents of visually impaired children following the withdrawal of this service. It
is hard to explain to them that we could sit in the House all night a week or two ago to provide
billions to bail out banks, yet we cannot provide a few buttons, as it were, to maintain a service
such as this.
  After speaking with a number of school principals and the parents affected by this, I cannot
over-emphasise the necessity of restoring the visiting teacher. It was an invaluable service for
teachers and visually impaired students. To suggest that the same service can be provided by
mobile telephone is grossly insulting to the plight of these children. The telephone solution is
really quite bizarre when one considers that it is dealing with visually impaired students.
Equally alarming is that the Department of Education and Science, through its directorate of
regional services, has indicated that while new referrals can continue to be sent to the regional
office, there is no guarantee of service for them until further notice.
  Does this mean that new students in County Mayo with visual impairment will get no assist-
ance until further notice? I do not know what the Minister will reply but I am anxious that my
question is answered before I leave the House. I make a final appeal to the Minister to restore
this service. The children with visual impairment relied on it. Even though it was limited and
inexpensive, it gave them a sense of security and self-esteem. In short, they felt cared for. Will
the Minister walk away from them now, in their hour of need?

  Deputy Sean Haughey: I welcome the opportunity to make a statement on this matter. The
Department of Education and Science’s visiting teacher service promotes, facilitates and sup-
ports the education of children with visual impairment from pre-school through first and second
level schooling to third level. In addition to working with individual children, the work of a
visiting teacher includes involvement with parents, schools, teachers and access offices in third
level institutions. A key element of the visiting teacher’s work is engagement with a range of
referral agencies, such as the National Council for the Blind in Ireland, special education needs
                Schools Building          15 October 2008.             Projects

  [Deputy Sean Haughey.]
organisers and other agencies working in support of visually impaired children and their
   Taking account of an individual child’s level of impairment and need for support, the involve-
ment of a visiting teacher with that child may vary between once weekly contact in the case of
blind children; monthly, once a term or annual contact in other cases and occasional visits to
special schools primarily to support staff where children have other underlying disabilities.
With regard to County Mayo, referral agencies, schools and parents of pre-school children with
visual impairment currently are being informed by visiting teacher management of an interim
telephone advisory service that is now being provided while alternative arrangements for a
visiting teacher presence in County Mayo are examined. New referrals to the service continue
to be accepted and assessed.
   Most recent caseload figures for County Mayo show a total of 51 children who are eligible
for support from the visiting teacher service on current criteria. These break down as follows:
six of pre-school age, 23 in primary schools, eight at second level and 14 in special schools. I
assure the Deputy that every effort will be made to provide a service in County Mayo at the
earliest opportunity. Again, I thank him for affording me the opportunity to outline the current
position regarding this matter.

                                   Schools Building Projects.
   Deputy Deirdre Clune: I am glad to have the opportunity to raise this important issue. It
concerns a school in Ballygarvan, outside Cork city, that was promised a new school building
ten years ago this month by the then Minister, Deputy Micheal Martin. There have been five
other Ministers since then but the school is still waiting. It has not even reached the stage of a
site being purchased. This is extremely frustrating for the children, their parents, the school
principal and the teachers.
  At present, there are 265 pupils in the school. There are two permanent classrooms and eight
prefabs. The site is just over half an acre and is full to capacity. There is no room to put any
more prefabs on it. A site for a new school has been identified. It is in three parcels and the
Department of Education and Science is fully aware of the details about purchasing it.
Recently, it asked the diocese to purchase the site, which the diocese is willing to do if it gets
an assurance from the Minister and the Department that a school will be built on it. The
diocese does not wish to be left with a site and no school on it. The Department should be the
driving force on this matter but it has failed to act.
  The situation at the school has now become more urgent. At a recent meeting, the school
principal informed the parents of 19 children that the school would be unable to accept their
children next year. The school is at a stage where it can only accommodate siblings of the
pupils in the school. Children who are living next door to the school, therefore, cannot be
accommodated. There is no space on the site for additional classrooms. If the Department
would ensure that the other site was purchased, perhaps that problem could be resolved.
  The situation at the school has reached a crisis. It is in a rapidly developing area and in the
past few weeks Cork County Council gave permission for the construction of 144 additional
housing units in the village of Ballygarvan. One can readily estimate how many children will
have to be accommodated in a school that is still on a waiting list for site purchase. This is an
urgent problem, particularly for the 19 children who have been told there is no place for them
in the school next year. They will not be going to school with their neighbours or friends in
the locality. Instead, it appears they will have to seek school placements outside the village.
                Schools Building         15 October 2008.              Projects

   This matter is in the Minister’s hands. He can act to ensure that the site is purchased and
that the project moves to design stage immediately. It is in his interest and, more importantly,
in the interests of the children in the school and their stressed teachers and principal.

  Deputy Sean Haughey: I thank the Deputy for raising this matter as it offers me the oppor-
tunity to outline the Government’s strategy for capital investment in education projects and to
outline the current position relating to the provision of additional school accommodation for
Ballygarvan national school. The Government has dramatically increased investment in the
school building programme. In the lifetime of the national development plan almost \4.5 billion
will be invested in schools. This is an unprecedented level of capital investment which reflects
the commitment of the Government to continue its programme of sustained investment in
primary and post-primary schools.
   The Minister, Deputy Batt O’Keeffe, recently announced a list of schools to go to construc-
tion as part of the Government’s commitment to providing additional school accommodation.

  Deputy Sean Haughey: I thank the Deputy for raising this matter. It provides me with the
opportunity to outline the Government’s strategy for capital investment in education projects
and the position on the provision of additional school accommodation for Ballygarvan
national school.
  The Government has dramatically increased investment in the schools building programme.
Under the lifetime of the national development plan, almost \4.5 billion will be invested in
schools. This is an unprecedented level of capital investment which reflects the commitment of
the Government to continue its programme of sustained investment in primary and post
primary schools. The Minister recently announced a list of schools to go to construction as part
of the Government’s commitment to providing additional school accommodation. The schools
building projects announced by the Minister will provide permanent primary school places for
more than 4,600 students in five new schools and 15 extended and modernised schools.
  A further 3,000 students at post-primary level will benefit from one new school and three
major extension and refurbishment projects. The provision of a new physical education hall in
a post-primary school will benefit another 600 students. Seven of these schools building projects
are in a position to start construction towards the end of the year. A further 15 are expected
to be in a position to start construction in the first quarter of next year.
  This year, more than \586 million will be spent on the schools building programme, with one
third of that invested in rapidly developing areas. This has resulted in the delivery of 12,000
new school places in 2008, a record number in any one year. This is an unprecedented level of
capital investment that reflects this Government’s commitment to continuing the programme
of sustained investment in primary and post-primary schools. The Minister intends to make a
further announcement in the first quarter of 2009 on major primary and post-primary school
projects to proceed to construction.
   As the Deputy may be aware, a developing areas unit was set up recently in the Department
to focus on the school accommodation needs of rapidly developing areas. The main emphasis
in 2008 and 2009 is on providing sufficient school places in these developing areas, in addition
to delivering improvements in the quality of existing primary and post-primary school accom-
modation throughout the country. Ballygarvan national school is a co-educational school cater-
ing for boys and girls from junior infants to sixth class. Enrolments in the school have risen
steadily from 140 pupils in 2000 to an expected enrolment for 2008 of 251 pupils. The staffing
at the school reflects this enrolment.
  The school’s board of management submitted an application to the Department of Education
and Science for a new school building. The existing school site is very restricted and, on its
                    Sports                15 October 2008.             Funding

  [Deputy Sean Haughey.]
own, is not a viable site for the proposed project. The Deputy will be aware that a suitable site
has been identified. This site comprises three plots of land belonging to three separate owners.
It was originally intended that the Department would acquire the three plots of land. Nego-
tiations, while difficult at times, were progressing on that basis. Earlier this year the school’s
patron indicated that he was willing to acquire the plots of land directly to advance the project
and overcome difficulties experienced.
  The Department of Education and Science has been in contact with key stakeholders with a
view to exploring the options open to advancing both the acquisition of the plots of land and
the proposed building project. These discussions are ongoing.

  Deputy Deirdre Clune: They have been for ten years.

 Deputy Sean Haughey: I thank the Deputy for affording me the opportunity to address the
House on this school.

                                        Sports Funding.
  Deputy Brian Hayes: I thank the office of the Ceann Comhairle for allowing me and Deputy
O’Connor to raise this very important matter. Not only does it affect the two sports halls in
our constituency, namely those in Killinarden and Firhouse, but also the centres in Palmerstown
and Collinstown.
  The concept of dual sports halls first came into being when the Government made \34
million available for nine halls nationally. The halls were to be used in a dual capacity and
were to be much more significant than the average PE hall. They are three times the size of
the latter, they are equipped to a very high standard and, most important, they are accessible
to the wider local population as well as the school population. The objective was that the four
halls in question would be open 24 hours per day, seven days per week, such that the com-
munity would have use of them after school hours. The former Minister for Education and
Science, Deputy Mary Hanafin, stated the project was to encourage positive links between the
local community and schools and to open up the state of the art facilities to young people from
disadvantaged communities. This holds true for Killinarden and Firhouse.
  I understand from County Dublin Vocational Education Committee that 8,000 people use
the halls constantly. Not only are they used by the local community schools, they are also used
by the local national schools. This is an extraordinary asset to primary education. It is very
important that we save the jobs in Firhouse and Killinarden in addition to the facilities. The
funding provided under the dormant accounts fund or the Young People’s Facilities and
Services Fund has now dried up. I am aware that a clear verbal commitment was made by the
Department of Education and Science to County Dublin Vocational Education Committee that
necessary replacement funding would be found once the initial phase of funding ended. It has
now come to an end.
  In a few months, the facilities in Firhouse and Killinarden, designed for multi-purpose use,
including community use, twenty four hours per day, will no longer be available unless replace-
ment funding is found to keep them open and to keep the capital investment, which has been
so wisely used, to the forefront of our entire endeavour as a local community. We await what
I hope will be the positive remarks of the Minister of State at the Department of Education
and Science. Otherwise, the facilities will be closed after 4 p.m. each day, which none of us
can accept.

 Deputy Charlie O’Connor: I, too, thank the Ceann Comhairle for the opportunity to join
Deputy Brian Hayes in raising this issue with the Minister of State, Deputy Haughey. The
                    Sports                15 October 2008.             Funding

importance I ascribe to it can be gauged from the fact that I have rushed back from Croke
Park where I was cheering on my Tallaght neighbours, Robbie Keane and Richard Dunne —
I am not quite in their age group so I cannot call them colleagues. I was there for Robbie
Keane’s goal but then returned to the House and missed him getting injured. The Minister of
State knows I would not leave Croke Park if my being here to raise this issue tonight were
not important.
  My colleague, Deputy Brian Hayes, has emphasised we are referring to the County Dublin
Vocational Education Committee facilities in Palmerstown, Collinstown, Firhouse and Killin-
arden. I will not talk too much about the former two because I have no plans for them in
respect of the European elections but I will concentrate on Firhouse and Killinarden. I was at
the official opening of the centre in Firhouse with the former Minister for Education and
Science, Deputy Hanafin.
   We must impress upon the Minister of State the importance of this issue, regardless of his
reply tonight. It is a question of sport. It is interesting that I referred to being in Croke Park
and sports persons from Tallaght given that we are discussing two excellent facilities that are
under threat. Not only do these facilities provide an excellent service to the primary schools
and communities generally, they are used in the school completion programme. This is the case
in respect of Killinarden community school, which is in a disadvantaged RAPID area.
  It makes no sense to get into a bind over who should fund first-class State facilities. As a
former member of County Dublin Vocational Education Committee and former member of
South Dublin County Council, as was Deputy Brian Hayes, I campaigned for the PE halls in
both Killinarden and Firhouse. The battles were well fought and the communities got right
behind the campaigns. They now support the facilities in a very definite and positive way. I
receive many calls on this issue from young people, employees whose jobs are in jeopardy and
others who, for all sorts of reasons, want to use the facilities. I make a special appeal to the
Minister of State to acknowledge this issue, which is so important to me and my community in
Tallaght. We really hope he will help us.

   Deputy Sean Haughey: I thank Deputies Brian Hayes and Charlie O’Connor for raising this
matter, in particular Deputy O’Connor for his dedication and commitment to his constituents
               in returning to the House. I am grateful to the Deputies for giving me the oppor-
9 o’clock      tunity to outline to the House the background to the provision of these facilities.
               To begin with, these halls were built as part of a programme to develop com-
munity sports halls in drugs task force areas in Dublin and Cork. The stated objective of the
programme was that each hall would be dual use in nature in that they would be accessible to
the wider community as well as to the local school population. The intention was that, apart
from normal school usage, the facilities would be available as much as possible to the com-
munity and, in particular, to target groups such as youth at risk.
  As a reflection of its commitment to the programme, my Department provided funding in
excess of \34 million to cover in full the capital cost of constructing nine dual use halls with
enhanced facilities attached to post-primary schools. Eight of these halls are located in Dublin,
including the halls referred to by the Deputies, and one is in Cork. The full list of relevant
schools is as follows: Firhouse Community College, Tallaght; Killinarden Community School,
Tallaght; Collinstown Park Community College, Clondalkin; Scoil Phobail losolde,
Palmerstown; Pearse College, Crumlin; College of Further Education, Inchicore; Senior
College, Ballyfermot; St. Michael’s secondary school, Finglas; and St. Vincent’s Convent sec-
ondary school, Cork city. These halls are of a different order of magnitude to the standard
school PE hall. They are over three times the size of a standard hall and include a large number
                     The                 15 October 2008.           Adjournment

  [Deputy Sean Haughey.]
of distinct spaces, including the main arena, a meeting room, a fitness studio and a multi-
purpose area.
  An application was made by my Department in 2006 for dormant accounts funding to enable
community usage of the halls to commence. Government approval was received in 2007 for the
drawdown of funding of approximately \2.1 million in respect of six of the halls, including
those referred to by the Deputies. In regard to these six halls, management structures were put
in place and community groups were given access. In Dublin county, County Dublin VEC
has managed and operated the halls at the schools in Firhouse, Killinarden, Clondalkin and
Palmerstown, while in Dublin city, Dublin City Council, on behalf of my Department and City
of Dublin VEC, has managed and operated the halls at Inchicore and Crumlin.
   The position is that the allocated dormant accounts funding will provide for the operation
of these halls until the end of 2008. My Department does not normally fund community facili-
ties but we are in contact with other Departments with responsibilities in this area and will be
in contact with the relevant stakeholders.
  I thank the Deputies once again for affording me the opportunity to outline to the House
the current position on this matter.

  Deputy Brian Hayes: Will the Minister give way to a question?

  Deputy Sean Haughey: Yes.

  Acting Chairman: The Minister cannot take questions.

  Deputy Brian Hayes: This is a crucial issue which needs clarification. The Minister stated
he has been in contact with other Departments. Will he put on record what Departments
were contacted?

  Acting Chairman: The Minister of State might be in a position to answer following the

 Deputy Brian Hayes: There is latitude in this regard. It is a crucial issue. What Departments
were involved?

  Deputy Sean Haughey: I am not in a position to give that information to the House tonight
but I will undertake to get the information for the Deputies.

  Deputy Brian Hayes: I appreciate that.

  The Dail adjourned at 9.05 p.m. until 10.30 a.m. on Thursday, 16 October 2008.


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