It is fitting that the Minister for Social Protection has walked out from the Chamber. That says it all, she does not want to hear constructive views from the Opposition or members of the public who sat here patiently and quietly and listened to the masked language, camouflaging the cuts that will dribble out over the coming weeks and months. I understand that the Minister is unable to face the music and chose to leave the Chamber immediately.
Regarding the statement on expenditure, the overall consolidation to be achieved in this budgetary process is well accepted by most people and is supported by Fianna Fáil. This is the first opportunity for the new Fine Gael-Labour Party Government to outline its priorities and plans for the future. We agree with some of the choices but there are a number of individual decisions announced today that are simply unfair and unjust. These decisions will impact harshly on some people but the Government has been careful to protect some of its well-paid friends and cronies.
The Taoiseach has ensured a 35% salary increase for one of his friends. More to the point, on Tuesday last week in the Dáil, the Government parties voted down proposals to cut the excessive pay rates of chief executives of a number of semi-State companies. Each Member on the Government side voted against a range of measures to cut highly-paid public servants earning more than €200,000 per year.
There is no hypocrisy. We accept the consolidation of €3.8 billion to be achieved between today and tomorrow. We accept the expenditure reduction of €2.2 billion and we expect an announcement tomorrow of tax increases of €1.6 billion. We support the overall figure and we agree with the budget deficit targets of 8.6% for 2012 and 3% deficit in 2015. However, individual measures such as voting down proposals on public servants earning more than €200,000 per year are not good enough when the Government is cutting the fuel allowance for people over this cold winter to pay for their friends in high places.
That is the Government’s choice and it has made these decisions.
I welcome the new approach of announcing the expenditure plans here today. The booklet circulated to Members contains 200 pages and in previous budgets that would have been an annex to the main taxation measures. We all know that for this year, next year and subsequent years the main financial consolidation had to happen on the expenditure side as opposed to on the taxation side and that is generally agreed by the majority of people inside and outside this House. That is why it is important to have a detailed examination of the expenditure proposals which will hit every household. We support the approach of coming in here today to deal with expenditure so that people know how they will be affected by health, education and social welfare changes. On 23 June we discussed this and said it was probably the right way to go. Making today’s announcement shows we are serious about expenditure control. I welcome the new approach and the emphasis on expenditure issues. We look forward to the day when there will be some expenditure increases. I will come to expenditure increases in a minute because, believe it or not, within that 210-page document the Minister has slipped in a few sly little expenditure increases again for the Government’s friends and cronies.
I am glad the Government is accepting that within the overall parameters it can make individual choices. Most of the Opposition parties met the EU-IMF delegation when it was here during the summer and the autumn. Mr. Ajai Chopra made it very clear to everybody that he will not get hung up on individual choices once they are within the overall budgetary framework and meet the target. He left here in the middle of October after the September review and did not intend coming back until next year because he was satisfied. Once the Government assures him that it will stay within the figures he does not mind what changes it makes. However, the people mind about the changes it makes because they affect them.
The Taoiseach is right in saying that the people are not responsible for everything that happened here.
They are being made to carry the can for some of these decisions. In the past two weeks the Government announced the capital expenditure programme, which resulted in a reduction of €750 million in capital expenditure. As the Minister knows that €750 million cut will directly lead to 9,000 people who are in work today not having projects to move on to next year and they will lose their jobs. I know the Minister has a funny way of looking at it by suggesting that we did not spend the money next year, so they did not have the jobs and therefore will not lose jobs. They are in work today on projects and will have no projects to move on to next year as a result of the Government’s cuts.
Most people accept that in recent years there has been considerable improvement in infrastructure, but health and education should be the priority. However, in the capital expenditure programme for the next five years, health is getting only 11% and education is only getting 13%. The Government is giving a very limited amount to health and education, where extra money should be spent. We all know the issue of health and the nursing homes the Minister wants to close.
By just increasing the capital expenditure on health areas, it could bring all those nursing homes up to HIQA standard and it would not be necessary to close the ones proposed to be closed.
One of the Minister’s roles is to deal with public sector reform. Last week we discussed his document on the subject at a committee meeting. I said it was the weakest document he had produced – he has produced some good documents, some of which I agree with and some with which I disagree. This was a very poorly produced document.
The essence of it is that the Taoiseach announced last night that there will be 37,000 fewer people working in the public service by 2015 – 23,000 extra from today. That is higher than the figure the Minister announced during the general election campaign, but clearly he lost that battle in Government. I accept that is the way compromise goes.
The Minister also mentioned a list of quangos to be eliminated as if he is doing something new. That is the list of bodies that were on their way out already. The emphasis should now be on implementing the Croke Park agreement to ensure it produces specific reforms. The next interim report must contain more specifics of cost savings on a Department-by-Department basis. The first annual report had no such figures and the document was lacking in that regard.
I was amazed at the Minister’s public sector reform plan which I criticised on the basis that it is all geared to the appointment of a new layer of middle management in the public service. That is his definition of public service reform – I am reading the Minister’s words from his document. He wants to appoint a programme director for the new reform and delivery service office. He wants to appoint a senior official responsible owner for overall delivery of cross-cutting measures.
He wants to establish a public service chief information officer, a shared-services transformation manager in the reform and delivery office, appoint a payroll shared services manager, an officer responsible for business plans, a pensions shared services project manager, a project manager in the Civil Service human resources shared services centre, a senior responsible officer to provide leadership to overall procurement in the public sector reform and a head of commercial delivery within the Department of Public Expenditure and Reform. He wants to set up an implementation steering group to plan, monitor and evaluate the basic payments account plan. That is why I criticised the Minister’s document. On that issue, I accept what he is saying about the expenditure cuts. However, on that issue, I have never seen a Minister captured so quickly by his senior civil servants that he could put his name to a document with all that Civil Service gobbledegook.
That is the Minister’s solution to public sector reform. Nobody else would regard all these internal quangos as public sector reform.
Jobs have been identified as a target area by the Minister for Public Expenditure and Reform, the Taoiseach and the Minister for Finance. Since the Government came into office unemployment has increased by 10,000.
Those are the job cuts under this Government. I have already mentioned the 9,000 jobs to be lost following its capital expenditure plan and the 23,000 public service jobs it will shed between now and 2015. They are anti-jobs.
The only announcement about jobs the Government is making is the announcement of job cuts. In fairness, the Taoiseach said last night that if everybody waits until 2015 we might have a few more jobs in four or five years’ time. That was the essence of the jobs proposal. The Government’s policy seems to be to cut jobs now and maybe in five years’ time it might get some of them back.
We published our alternative budget last week and it is on the public record for everyone to see.
One item the Minister lightly skipped over – it affects the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte in particular – is the privatisation or part-privatisation of the ESB and all essential State services – EirGrid, Bord Gáis Éireann, Coillte and Bord na Móna. That is an issue that will be dealt with. The Minister knows that when any shareholder – even a minority shareholder – is introduced into any of these essential services, it changes the public service mandate of those companies.
The Deputy has proved the point, which is that some mistakes were made in the past but it is important to learn from them.
A major issue highlighted in the Minister’s speech is that of fairness. This is where this budget has failed. The Government has failed on jobs. There are no new jobs in the budget. The Government will recycle the micro-financing it has been discussing for 12 months and people will be waiting. I will give an example of the fairness shown by the Labour and Fine Gael Government. Last week we made a proposal for the chief executive of the ESB who is earning more than €400,000, the chief executive of An Post who is currently earning €328,000 and the chief executive of the Dublin Airport Authority who is currently on €297,000 to reduce their salaries.
The Government voted down the motion to reduce their salaries. The Minister for Education and Skills stated in a reply in the House early last month that 99 people in our third level institutions earn more than €200,000 per annum.
The Government’s response is to increase student fees by 50% to pay for those salaries. Last week, the Government said it would not do that. The parties in Government won the general election by deceiving the students of Ireland and their parents. It has now told them to return in 2015 and there might be a job for them. That is this Government’s solution. The Government voted against a proposal to cut those salaries.
In the health area, a number of medical consultants are also earning more than €200,000 per annum. I do not know what influence the Minister for Health, Deputy Reilly, has over the Government but he has been able to have the salaries of medical consultants exempted from examination in terms of the overall pay strategy for public servants. They have been excluded from the process. As I stated earlier, the Minister, Deputy Reilly, is looking after his friends in the medical profession just as is the Government here today.
Another area on which I want to comment is that of legal fees. I am aware those in this sector also have friends in Cabinet. The States Claims Agency, to which the Minister did not refer today, has outstanding liabilities of €900 million. It has stated that it will pay €450 million, 50%, extra in legal fees dealing with those claims. Yet there is no proposal to cut legal fees. The Government is again looking after its friends in high places.
I want now to contrast some of the cutbacks announced today with specific increases.
The Taoiseach, whom I watched intently on television last night, should go on television again tonight to explain the following.
When the Taoiseach’s script writers met with him last week they scripted a speech with the message that we are all in this together and that the Government was going to be fair. However, they had hardly left the room when the Taoiseach approved an 18% increase in travel and subsistence for senior officials of his Department. Staff in the Taoiseach’s Office have had their travel and subsistence allowance increased from €275,000 to €325,000. I know what happened when the script writers left the room. The Taoiseach took a clear view on this matter and decided to go for spin over substance.
We had spin last night and the substance is coming out today. Also, contract legal services for the Attorney General’s Office, which comes under the remit of the Taoiseach, are to be increased to €668,925, a 38% increase. There are a few more increases I would like to mention.
At a time when the Minister for Finance is asking everyone else to take a cut, he has increased salaries in his Department from €17.8 billion to €20.5 billion, an increase of 15%.
Travel expenses for his staff are also to be increased by a whopping 34%. Tell that to people whose fuel allowance is being cut.
The Minister, Deputy Howlin, is increasing consultancy charges in his Department by 43%.
He is also increasing his Department’s office expenses by 27% and there is an increase of 11% for retired civil servants. The Office of Public Works, which comes within the remit of the Minister, Deputy Howlin, is increasing its office expenditure by 8%. Yet, everyone else is to take a cut. How does the Government reconcile these increases with fairness for the public? The Minister for Justice and Equality has increased travel and subsistence expenses in his Department by 6%, yet everyone else is expected to take a cut.
The equality, integration and disability service at that Department has been also cut by 15%, from €19.7 million to €16.8 million. Will the Minister for Social Protection, Deputy Burton, who left the Chamber a few minutes ago, explain to those on whom she proposes to impose cuts the reason she has increased office expenditure in her Department by 23%, from €11.9 million to €14.7 million? Is that this Government’s idea of fairness? It is not mine. The disability allowance for young people between 16 and 18 years has been cut, a nasty thing to do.
The Minister, Deputy Howlin, referred to equalisation of child benefit rates. What does the Minister for Finance, Deputy Noonan, have against third children? The Minister is proposing a cut in child benefit for third and subsequent children.
This is a cut in the rates. The child benefit rate of €140 in respect of the first and second child is not to be cut but the rate in respect of the third and fourth child in respect of whom €166 and €176, respectively, is paid is to be cut. This is a cut of more than €1,000 per annum or €100 per week for a family with five or six children.
The Government said this was a red line issue.
It is stated on page 29 of the document “…phase out entitlements to higher rates for the third and subsequent child over the next two years…”, from which €70.7 million per annum will be saved.
That means the Government is cutting the rate of child benefit.
What aspect of that does the Minister, Deputy Howlin, not understand? Child benefit rates are being cut while expenditure in the Minister’s office is being increased.
The fuel allowance is also being cut. What are people to do during cold weather in September or April? Are they to freeze for an extra two months? That is a nasty thing to do. Old people should be treated with kindness and respect. They are the people who brought all of us into this world.
This Government is being mean and nasty to elderly people. It is hitting the old by cutting their fuel allowances and it is hitting families with young children by way of cutting rates for third and fourth children at the same time as it is looking after its friends in terms of extra travel expenses and so on.
Another shocking measure is the change to the redundancy insolvency scheme to reduce the employer rebate from 60% to 15%. The Government is practically eliminating that measure. The Minister did not say when that will come into effect.
The Minister has introduced a scheme to incentivise employers to make people redundant before these new rates come into force.
When these new rates come into effect it will be more expensive for an employer to make a person redundant.
This is saying to employers with two or three employees who are hanging on by their fingertips hoping to get over Christmas that it is more effective for them to make those employees redundant now. To include that in a Budget Statement is a disgrace.
On student contributions, why must students pay for the salaries of the 99 people in the third level institutions earning more than €200,000? School capitation grants are being reduced by 2%. This will result in parents having to take to the streets to collect money to keep their children in school. Postgraduate maintenance support is also being abolished. It is to be phased out. This will affect people wishing to reskill in order to get back to work. Many people need that maintenance grant if they are to complete their postgraduate degrees.
The Minister must also help in this regard.
In respect of health, the Minister has increased the charges pertaining to the drugs refund scheme, as people will be obliged to pay an additional €12 per month. Again, this is small beans to the Minister, amounting to an additional €150 per annum, but this measure genuinely is unfair. From the Minister’s perspective, a positive point is that his spin-doctors won, in that the cuts are not that obvious until one reads the small print and the Minister has been very clever in ensuring it will be difficult to see them immediately. In respect of social welfare, I note the Minister also intends to hit the qualified child allowance. He also effectively will cut jobseeker’s benefit by changing the basis to a five-day week and is making it harder for 16-year olds who have a disability to get their benefits.
As for the additional charges, the Minister intends to make matters more difficult. At the end of each month, some families which are coming close to the €120 threshold for paying for private medicines will skip going to the chemist for antibiotics for their sick children. This is the type of society the Minister is making. He is making it harder for people to buy medicine and it is not necessary to do that.
I note the Minister’s statement included a few sentences about generic drugs and how the Government will secure lower prices from those concerned. However, everything the Minister has announced today is predicated on a growth rate of 1.6% for next year. This is well and good and all Members hope this will happen. However, if it does not, it will make some of the Minister’s announcements appear very shallow.
The Minister has introduced a number of swingeing cuts but the biggest cut he has made today is a cut in employment.
I refer to several announcements. For example, the changes relating to the redundancy scheme will force employers to make people redundant tonight before the new rates come in, in order that they can claim back the payments.
The Minister is cutting public sector numbers and the capital expenditure programme. This announcement does not contain a single initiative to create jobs next month, next week or next year.
When taken in conjunction with the VAT increases the Government will announce tomorrow, everything it is doing is cutting jobs. While I understand the Government is obliged to make savings, the biggest loser should not be the 450,000 people in receipt of unemployment benefit. The Minister’s statement contains nothing about trying to get these people back onto proper working education and training schemes, except in respect of the cuts the Minister has introduced in these areas, such as the aforementioned measures pertaining to postgraduates. The Minister should have used this opportunity to deal with the issue concerning FÁS, which now is to be abolished, and the 40,000 people who were asked to show up for an interview for job placement but who did not show up. This year, 40,000 people did this under the Minister’s watch but he has taken no action in this regard.
Fianna Fáil proposes that FÁS staff must be sent to the Department of Social Protection. FÁS should be closed down at the beginning of next year and its staff should be merged into the Department of Social Protection. This would enable people to go into a benefits and jobs office. In this scenario, the first thing someone who loses his or her job will do is to go to the jobs office to see if a job or training scheme is available. When people have done that, they can then register for jobseeker’s allowance, rather than the other way around, whereby people register for jobseeker’s allowance but no mechanism is in place.
Such a change would be what I call public sector reform, that is, making sure that two offices or two Departments talk to each other and follow up with each other.
This issue was raised at last week’s meeting of the Committee of Public Accounts but the response was there were data protection issues that precluded the sharing of information between Departments. The Minister would have the support of this House, were he to amend the data protection legislation to make sure the Government operates in a single, joined-up manner. I refer to the manner in which information from a local authority cannot be given to the social welfare authorities, information from the tax office cannot be given to the FÁS office and information about a medical card means test cannot be given to anyone dealing with an application for supplementary welfare allowances. The Minister must do this and Fianna Fáil would support him in this regard.
I will conclude by stating that Fianna Fáil supports the overall financial parameters.
A number of measures were introduced by the Minister with which I do not disagree and that I let go. However, the Minister has made a number of choices and priority decisions that were not enforced on him by the European Union, Angela Merkel or any of the Government’s friends in Europe.
I note the Taoiseach will be going over there next week to agree to whatever proposal she might have. In his speech last night, the Taoiseach referred to the European leaders as though the people in Europe, that is, in France and Germany, are the leaders. The Taoiseach is one of the European leaders. He is leader of one of the 27 member states and is leader of one of the 17 eurozone members.
For him to talk about European leaders in the third person involves—–
The Taoiseach was putting himself in the category of spectator when it comes to those meetings because he is yet to put a single decent proposal to any such meeting. The Taoiseach should have been dealing with the future of the country last night and not today’s budget.
Members today have heard a speech from the Minister, Deputy Howlin. Perhaps the Minister for Finance might tell Members what he has against the third and fourth child tomorrow. He referred to this last week and the point was understood. However, someone has won out in respect of that debate.
This budget delivery process is a triumph of spin over substance. I have given repeated examples in each of the Ministers’ personal offices.
Moreover, I only picked out the five or six key Ministries that are involved in this process to show where the Minister has given salary increases, travel expenses and hotel accommodation increases and office increases in the respective Ministers’ Departments.
All these increases are included in the expenditure report.
I have tagged the pages for each and every one of them. If the Minister doubts any figure, he should note they come from his own document and are not my words. The Minister should explain the reason he is making these cuts to the fuel allowance and in respect of students.
Why is he increasing the charge by 50%, when he is looking after his own friends and cronies in high places?