Remarks by Sean Fleming TD at the launch of the party’s Budget 2014 proposals

Fianna Fáil has outlined clearly why we believe an adjustment of €2.4bn is the correct approach in terms of the Budget for 2014.  This will result in a fairer future for Ireland.

My view is there has been an over focus in recent weeks regarding the actual size of the adjustment as opposed to where the adjustments must fall.  We believe in the interest of fairness that those on the lowest levels of income should not be asked to carry an unfair burden of the adjustment.

To achieve a Fairer Future for Ireland we propose:

• A split of the adjustment for 2014 should be approximately 50/50 between new tax and expenditure measures.
• The burden of adjustment should be levied in a progressive manner, unlike the current government’s two budgets to date.
• Education, Disability and Mental Health services should not be subject to any further cuts.
• There is sufficient scope for savings in pay, non-pay and procurement areas in the public service as well as other savings to obviate the need for cuts to front line services or social protection payments.
• There should be no further cuts in the Exchequer Capital programme.
• Savings on expenditure should focus on accelerating current reform plans, driving efficiencies and eliminating wasteful and duplicate spending.

• There are still considerable inefficiencies in public spending as highlighted by the recent Comptroller and Auditor General Report. This cannot be tolerated and Departments must set much more ambitious targets for collecting monies due, eliminating waste and driving savings by focusing on procurement, shared services, out-sourcing and administration.
• The Government has failed to manage the Exchequer Capital Budget in a manner that promotes the best interests of the economy. The further cut of €100m to the capital budget signalled in the Stability Programme Update should not go ahead.
• Too much of the Capital and Procurement Budgets are spent outside the State. Within EU rules, we need to raise the current 90% level up to at least 95%. While still below the EU average, this would represent a boost to the domestic economy of €600 million per annum.
• A €440m cut to the Social Protection Budget will result in severe hardship for many families and must be resisted.
• Now that the Haddington Road agreement is in place the government must ensure that the projected savings are achieved and in a manner that ensures that front-line services are protected and the public is not made to suffer reduced or impaired services.

• Key areas to watch will include hospital waiting lists, processing time for medical cards, special needs facilities in schools and the manner in which social welfare applications and appeals are dealt with.

• According to the Stability Programme Update the interest bill on the national debt is expected to be €8.4bn in 2014. The average interest rate on the State’s debt is projected at 4.1%.

• We believe it should be possible to reduce the overall bill by approximately 2% (€150m) though buybacks of State debt and a more judicious use of the existing cash buffer.

• The Health (Pricing and Supply of Medical Goods) legislation should make provide a framework for finally achieving the long overdue savings in the HSE drug bill. Should these savings not materialise we believe the National Procurement Office should be given the task of managing purchasing medicines on behalf of the Department of Health and the HSE.

• The current level of compliance with the TV licence is approximately 84%. Considerably greater effort is required to increase collection rate with a target of €15m in additional revenue in 2014.

• Currently there is €4bn in outstanding commitments in respect of Public Private Partnership projects. As with the National Debt, it should be possible to achieve savings in the management of interest costs associated with PPP projects of a minimum of €10m.

• Two–thirds of motoring fixed charge notices for motoring offences are paid on time. In nearly 20% of cases the individual is able to avoid penalties or a court appearance. As noted by the Comptroller and Auditor General, Gardai must “urgently” address problems to “ensure fairness and continued public confidence” in the system. This should raise an additional €5m in 2014.

New Expenditure Measures in Ensuring a Fairer Future for Ireland:

• In order to qualify for Family Income Supplement a person has to work at least 38 hours per fortnight. If the Department of Social Welfare were allowed to exercise discretion the State could be a substantial beneficiary. We propose an additional allocation of €10m to the Department of Social Protection to cover this in 2014.

• At present there is a rule that anybody who works more than three days per week is not entitled to Jobseekers Allowance payment regardless of how little they earn.

• The restriction on not being allowed work more than 3 days should be scrapped. This would be a clear recognition of the reality of the modern labour market. It would incentivise many people to go to work, and reduce the state social welfare bill.  We propose €10m to deal with this.

• At present, lone parents are entitled to work and stay in receipt of the full One-Parent Family Payment if their income does not exceed €130 per week. Income above that is deducted from their allowance.

• If a lone parent who is working part-time and earning more than €130 per week (as most are), gives up work and goes back full-time on social welfare then the State will finish up paying out more and the individual will be financially worse off. It is a classic lose-lose situation.  We propose €5m to deal with this.

• In 2012 Minister Quinn removed the ex-quota allocation for guidance provision. We would like to see a gradual reinstatement of guidance provision. The full year cost of re-instatement would be €32m. We propose that half of the number of posts lost would be restored from September 2014.

• The government must commit to prioritising funding for special education. This should include protecting resource teaching hours and the number of Special Needs Assistants in our schools. We also believe additional resource teaching hours should be made available for children with Down Syndrome and that it should be listed as a low incidence disorder.  We propose an additional €23.5m in 2014 for this.

• The number of people with discretionary medical cards has fallen from 80,000 to 54,000.  There has been a major debate on this issue in private members time this week.  The Government rejected our reasonable proposals on this matter.  We are proposing an additional €10m to allow an initial increase of 10,000 discretionary medical cards.

• I now draw your attention to the Schedule of our proposed expenditure savings in Appendix 3 of our document, page 34 which comes to a total of €1,280m.