Dáil Budget Speech, Fianna Fáil Spokesperson on Public Expenditure and Reform Sean Fleming

In the days leading up to the budget we were told to expect a family-friendly budget, one that would help hard-pressed families.  What we have got instead is a litany of cuts and tax increases which, taken with the last two budgets, show a Government which is both lacking in imagination and a basic commitment to fairness.  The last two budgets hit those relying on public services hardes.  It has been our view all along that the split of taxes and expenditure in this budget should be of the order of 50:50, but the Minister has chosen not to do this.  Instead, he has chosen to let those who rely on State services and the Departments of Health, Social Protection and Education and Skills bear the brunt of the expenditure reductions and costs.  It is what we call a regressive budget.  Again today we see that the Government is allowing the burden of the adjustment fall disproportionately on those who can least afford it, but we do not yet know if we have the full story.  As happened last year, I expect that tonight and tomorrow there will be a series of press releases from various Departments highlighting the specific measures and cuts that are not being highlighted this afternoon and that these will be even more painful than what we have heard in the last hour.

There is no doubt that there is one common thread in the budget.  It hits the elderly generation extremely hard, with young out-of-work individuals also in the Minister’s sights.  The Government has in the past called for intergenerational solidarity, but what it has announced today will ensure that cannot happen.  I point, in particular, to the issue of medical card eligibility.  For the second year running, the Government has shamefully cut the eligibility criteria for elderly people.  It is attacking our parents and grandparents – those over 70 years of age.  We know from research carried out by the ESRI that medical cards are a progressive anti-poverty measure.  They provide an essential safety net in terms of access to GP care, medicines and hospital treatment for low income families and older people who are more likely to have greater health care needs.  Despite being a Government that talks about creating a universally accessible health care system, it is actually intent on undermining and eroding access to it, as evidenced by these cuts.  There has been a reduction in the number of discretionary medical cards and a fall in the number of families with GP visit cards.  We are seeing blatant health care rationing on economic grounds, while clinical and health needs are being ignored.  The number of discretionary medical cards has been specifically targeted by the Government.  The Minister said there was no policy change, but the practice being implemented on a daily basis by the HSE is somewhat different.  People throughout the country have been receiving letters from it advising them of a review of their medical card and many have had their cards withdrawn recently.  This process will intensify as a result of the changes announced in this budget.  Last year the Government reduced the medical card weekly income limits for those aged over 70 years by €100 for a single person and €200 for a couple.  Today, it is reducing the limits by another €100 a week for a single person but by €300 for a couple.  What does it have against elderly married people such that the cut is more than double for a couple in a house than for a single person?  The Minister is now bringing down the figure to €900; it was €1,400 just two budgets ago.   At least 35,000 elderly people will lose their medical cards because of that decision alone.

Some 35,000 elderly people are watching today who will lose their medical cards as a result of this decision.  In fact, it was based on the Minister making a reduction of €200, but the figure is probably higher at €300 per couple.

The medical card is highly valued by older people and those on low incomes.  It provides reassurance and a right of access to health care at a time in their lives when they are more likely to have significant health care needs.

Many of the services required by these elderly people are not easily accessed through private health care, yet the Minister has today cut the tax relief for private health care insurance for many of the elderly people who need good-quality health care packages because they cannot rely on the health care system, especially now that he has reduced the availability of medical cards.  Some elderly people will be hit through the income tax relief for private health insurance while others will be hit through the removal of medical cards.  There is a good reason to provide older people with free health care services.  As we know, their physical health deteriorates as they get older.

One by one, the commitments made in the programme for Government in this regard are being abandoned.  Universal health insurance will never see the light of day and the promised White Paper is a figment of the Minister’s imagination.  We were told there would be funding to provide more residential places, more home care packages and the delivery of more home help and other professional community services.  The opposite is the reality.  The Fair Deal scheme has a waiting list of 1,500 and is on the brink of collapse.

Last week, the Dáil debated a Fianna Fáil Private Members’ motion on discretionary medical cards.  When this Government took office 80,000 people in Ireland had a discretionary medical card on medical grounds.  The figure today is 53,000.  Of course, the Minister will say there is no policy to reduce the number of discretionary medical cards, but the facts demonstrate otherwise.  When one looks past the headline figure, the situation is even worse.  We have heard of cases in which applications were not granted in the case of young children with multiple complex conditions and adults with severe illnesses such as cancer and motor neuron disease.  Many of our incapacitated senior citizens are also being denied medical cards under the practice operated by the HSE.  There is a clear intent to reduce the number of people who have medical cards, regardless of their health care needs.  Today’s budget changes are a further step in this process.

There is one positive development with medical cards.  The extension of the free GP card to children under five years of age is welcome.  Everybody will agree with that.  However, that will do nothing for the many families with young children over five years of age who suffer from serious medical conditions and are currently denied a medical card.  It is shameful that the expansion of the categories of patient covered by the medical card scheme comes at the cost of reduced cover for core low-income groups.  People have been refused discretionary medical cards even though they have been diagnosed with debilitating clinical conditions.  This is simply not fair.  It is worth recalling that it was only in August of this year that the Minister of State at the Department of Health wrote to parents in Galway to say the Department was unable to state when children with intellectual disabilities who are leaving school this year will be offered appropriate services due to the current funding situation.  Parents were told that some places would be offered “which will not fully address individuals’ requirements”.  The Government’s original plan was to introduce so-called free services for long-term illness patients, but this proposal has floundered.  The same might happen to the medical card scheme for children under five years of age.

The Minister is leaving.  He probably has a media appointment.  It is an example of the commitment of the Government to Dáil reform.  After the vote on the Seanad last week the Government spoke about Dáil reform, but now, when most of the Opposition spokespersons have yet to speak on the budget, the Minister for Finance and the Minister for Public Expenditure and Reform have left the building.

They are more important than the national Parliament.  That shows the commitment to political reform in this Chamber.

Last year the Minister said that his measures to reduce the cost of drugs and prescribed items would save €160 million in 2013 and €330 million in 2014 and subsequent years.  We all know these figures were a figment of the Minister’s imagination.  It did not happen, and never will.  The Department of Health has been promising for the last two years to make substantial savings in this area and it has clearly  failed to achieve its targets.  It recently emerged at the Committee of Public Accounts that the senior officials in the Department of Health and the HSE who are responsible for purchasing these drugs and prescribed items have never met the suppliers of these products.  This is a shocking situation and it explains why they are not getting the best prices.  I recently asked the chief executive of the IDA if he could help the Irish taxpayer to get a better price for products in respect of IDA client companies in Ireland.  He refused point blank to do so.  The IDA has refused to engage with the Department of Health and the HSE on the matter.  This behaviour is unacceptable.  All government employees must work together for the good of the Irish taxpayer.  I believe that Department of Health and the HSE have failed and do not have the ability to achieve these savings.  The task of procuring drugs and other prescribed items should be taken from them and handed to the Government Procurement Service in the Department of Public Expenditure and Reform.

With regard to the health figures mentioned today, I wish to highlight some of the items in the booklet circulated by the Minister.  We talk about medical cards but I will put on the record the cuts that are taking place.  The Minister says he is reducing the income thresholds for the over-70s to €900 per week for a couple and €500 per week for a single person.  That will save €25 million, according to the Minister’s figures.  The medical card probity examination will save €113 million.  Effectively, everybody with a medical card had better be aware that, from tonight, the Minister intends to hunt them down and cancel as many of those cards as possible.  The single biggest saving in the Department of Health is to cancel existing medical cards.  The Minister has identified a saving of €113 million in respect of current medical cards by ensuring they are cancelled in 2014.

The Minister went on to mention another mean cut.  We talk about getting people back to work, but the Minister said that when a person returns to work he or she will now only be given a GP card instead of retaining the full medical card.  That will save the Department of Health and the HSE €11 million.  Cutting medical cards for people who should be incentivised to go back to work is counterproductive and is a move in the opposite direction from what the Minister for Finance said about encouraging people back to work.  People do not want to lose the value of a medical card, but the Minister is saying today that if they go back to work they will lose it.  They will be given a GP card, but the Minister will not be long about taking that from them as well.  It is counterproductive.  All of the savings in the medical card budget in 2014 will amount to €149 million.  People with medical cards had better be aware that this Government is after them.

There has been a 500% increase in prescription charges since this Government took office.  The charge started at 50 cent per item and it will be €2.50 from the start of next year.  That is a major and substantial increase.  Of course, the Taoiseach promised in the election campaign in 2011 to abolish the prescription charge, but not only did it remain at 50 cent when he took office, it was increased to €1.50 last year and will be increased to €2.50 next year.  Again, we know who will pay it.  It will affect many people and will cost approximately €20 per week for people who rely on that scheme.

There is a figure of €666 million in savings to be achieved by the Department of Health as a result of the budget announced today.  In last year’s Budget Statement, the Minister said that a further €400 million in savings were to be carried forward by the Department of Health in 2014.  When that is added to the €666 million announced today, the total cut in the HSE budget will be over €1 billion in the coming year.  It is no wonder the Minister is attacking medical cards.  The core budget in the Department of Health will not hold up.  It is flawed and inaccurate.  It will collapse and we will be back in the House discussing Supplementary Estimates over time.

I will now discuss the Department of Social Protection.  The Labour Party leader, Deputy Gilmore, is present and I am sure he will have a particular interest in this area as the deputy leader of his party is the Minister in that Department.  This time last year one of the Tánaiste’s colleagues said in the Chamber that the one group of people in this country who have come through this crash and still have their incomes intact are pensioners.

That does not hold water 12 months on.  A raft of cuts and charges in the past two years commenced with the reduction from 32 to 26 weeks in the fuel allowance.  The Government also increased tax on solid fuel and increased tax on savings through deposit interest retention tax, DIRT, which has been repeated today.  People will be afraid to put money in the bank when the Government will take 41% of it in DIRT.  People will keep money at home, which is not safe.  The Government has slashed the home help hours for elderly people and the rising cost of medical insurance has increased due to Government policy.  The Government has removed some of the tax relief on it today.  I referred to the increase in prescription charges, which cost €20 a month to many people.  The Government has changed the income threshold for medical cards for older people, cut the respite care grant in the past 12 months and elderly people must pay a full year’s property tax in 2014.

The abolition of the telephone allowance is the third round of measures to hit the living standards of older people.  The telephone allowance enables older people to keep in touch by phone with their family and neighbours without it being too expensive.  It makes them feel safe and secure in their homes.  It is a miserable cut on the older generation who already feel isolated.  Has the Minister considered the case of a vulnerable elderly person living alone using a pendant around his or her neck as an alarm to alert a family member in an emergency?  The pendent that we see used by our elderly relations is linked to the landline in the house.  Cutting the payment for this vital support is an example of how the Government has descended.  The Government is cutting the lifeline by which elderly people can contact family members in case of emergency by abolishing the allowance for the telephone.

I ask the Government to reverse this measure.  The Government is in the process of gutting the household benefits package and failing to recognise its social and economic value.  Every pensioner over 70 years relies on the free telephone allowance, and the Government is hitting every person on the carer’s allowance, everyone between 66 and 70 years in receipt of the State contributory or non-contributory pension and everyone in receipt of the widow’s and widower’s pension.

In addition to doing that to elderly people, the Government has singled out people with disabilities for this cut.  The Government is also targeting people on disability allowance.  Everyone in receipt of disability allowance will be affected by this €26 cut, since it was started last year.  It amounts to €6 per week and the Government will say it does not hit the weekly rates but it hits the monthly allowance.  It amounts to a €6 per week cut for people who relied on the telephone allowance a few short months ago.  It will be abolished entirely.

Apart from the elderly, the Government is hitting everyone in receipt of disability allowance and every person on the invalidity pension, the blind pension and disablement benefit.  Why is the Government attacking the old and the disabled?  They are not the people who caused the problem.  We can throw the blame around but I know it was not our parents, our grandparents or people on disability allowance, invalidity pension, the blind pension and the disablement payment who caused the problem  They are not responsible for the cuts and they should not be asked to bear the brunt of them. The cumulative impact of these measures on recipients is to undermine their ability to live dignified, independent lives.  It goes against every instinct of Irish people, who have always valued the principle of social solidarity and intergenerational support.  These decisions are shameful and unfair.

Electricity prices increased by 20% since the Government came to power and gas prices have increased by more than 30%.  Further increases will be directly felt by the 410,000 currently in receipt of the telephone allowance.  This is hitting the same people.  On the one hand, the Government praises the valuable work of carers but it is hitting everyone in receipt of the carers allowance through today’s change.  When the Minister for Social Protection is asked about it, she glibly says they can go to the community welfare officers.  It is terrible to say that to elderly people.  Vulnerable, elderly or sick people and those on disability do not have the wherewithal to fill out a form for the community welfare officer.  It is a glib response from a Minister who is out of touch.

The cumulative impact of the cuts to the household benefits package represent an unprecedented attack on older people, carers and people with disabilities.  Age Action Ireland correctly highlighted the hugely stressful psychological impact of the cuts and highlighted the widespread anxiety about further cuts and the uncertainty it causes for older people.  It is important to note that many of those affected are included in the 35,000 or 40,000 people from whom the Government is taking the medical card if they are over 70 years.  It is a double whammy.

My colleague, Deputy Michael McGrath, mentioned the abolition of the bereavement grant.  There is no way to describe this other than to say it is simply lousy.  This is a PRSI payment for which people paid and now the Government is asking hard pressed families to go to the community welfare officer for an exceptional needs payment to cover the cost of burying a relative.  It runs counter to every instinct and tradition in the Irish people.  I cannot believe a Labour Minister would stoop so low.  Some 20,000 families will lose the grant next year.  I am shocked the Labour Party would do that.

Many cuts will be introduced by the Labour Party and by the Minister for Social Protection that are not included in today’s announcement.  Changes to one-parent family payments will be introduced from 1 January.  For families with more than three children, there will be another cut to child benefit with the rate for the fourth and subsequent child reduced by €10.  It will occur on 1 January even though it was not mentioned today.  There is no mention of this in what the Minister called a family friendly budget.

Parents had been promised by Deputy Burton that changes to the one-parent family payment would occur only once a Scandinavian-type child care system was in place.  The Minister for Children and Youth Affairs, Deputy Fitzgerald, scoffed and said recently that we do not need such a model but in the meantime the changes are going ahead.  In a few weeks, the Government will make changes, on top of the changes announced last July, to the age of the youngest child at which the one-parent family payment ceases and the ability of lone parents to earn money in part-time work.  The changes will save €112 million in a full year but will come at major cost to the families.  Lone parents experience a rate of poverty twice that of the national average.  They have been failed by a Minister who will introduce these cuts on 1 January.

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.  It is to encourage persons in households with a greater incidence of poverty to go out to work.  Income above that figure results in a deduction from the allowance.  This was done to encourage them to work.  Yet again, in 2014, the Government will drastically reduce the amount they can earn while retaining the lone parent payment.  For many, this means it will not be worth their while to go out to work.  It is a classic lose-lose for the recipient and the taxpayer.

The change to the mortgage interest supplement is one of the worst measures in the budget announcements.  I am at a loss to understand the logic of deciding to effectively abolish mortgage interest supplement.  More than 97,400 mortgages are in arrears for more than three months.  Deputy Michael McGrath said tackling the mortgage crisis is central to the well-being of Ireland as a society and an economy.  In the two and a half years since the Government came into office, the number in mortgage arrears has more than doubled.  Against this background, I am deeply concerned by the decision to effectively end the mortgage interest supplement scheme.  It is the only direct cash contribution by the Government to people in mortgage arrears.  Can the Minister blame the banks if they send letters to people telling them to vacate their houses?  The banks will say the Minister is abolishing the mortgage interest supplement.  The Government is leading the attack, followed up by its friends in the banks, on people in mortgage arrears.  The Government is saying to the banks that it will not give any more mortgage supplement and that the banks can do their business.  I refer to a letter in my office from a lady who is in mortgage arrears with the State-owned Permanent TSB and the total amount of arrears is €106.

She was not even a month in arrears.  The Minister’s bank, the State-owned bank, wrote to that lady telling her to dispose of the mortgaged property and get out of her house because she was €106 in arrears.  How can one blame a bank for sending that letter when the Minister stands up here today stating the Government will not support that person either and will abolish the mortgage interest supplement?  A few short years ago, when the Minister came to power, the cost of mortgage interest supplement was €60 million per annum.  The Minister, Deputy Burton, has told me she dislikes it because she thinks it is money for the banks.

She dislikes the payment because she thinks it is money for the banks and as a result, those in mortgage arrears are the ones who will suffer.  The Minister is cutting the allowance now.  Some 19,000 mortgage holders were benefiting from the scheme when he came to office and by next year, he will have the scheme almost abolished.

As has been mentioned, the Minister is reducing jobseeker’s allowance to €100 for new claimants up to the age of 25 while at the same time consistently failing to have proper activation measures in place to help them get back into full-time employment.  This is a charter for the young people of Ireland to emigrate.  My colleague demonstrated clearly the official policy of the Department in telling the unemployed to go work in Canada and elsewhere.  This is the backup measure to such letters, when the Minister says to the young people the Government will cut their jobseeker’s allowance if they stay here in Ireland.

The Minister is also cutting sick pay.  This will be another burden on small businesses.  This is another example of where the Minister, Deputy Noonan, states he wants to help business but, through the expenditure cuts, he is making it more difficult on small businesses by putting this cost on them.  There are 200,000 small businesses in Ireland employing more than 655,000.  These are a key sector of the economy.  Many of these jobs are in the retail and hospitality, where employee costs account for over 60% of total costs.  These small companies do not have the flexibility to move staff around if somebody goes out sick and it will be a barrier to future employment in those areas.

If one looks at the figures in the Department of Social Protection, as announced by the Minister in the booklet today, the attack on illness benefit, as I just mentioned, will result in a €22 million saving to the taxpayer but will be a cost to Irish business and employers, and that is a disincentive to employment.  For the jobseeker’s allowance change, by not giving this payment to young people the Minister, Deputy Burton, has factored in €32 million because she wants them to emigrate.  The Minister is making a cut to maternity benefit to save €30 million.  She is reducing the amount she will pay many women who are going on maternity leave, on top of taxing their maternity benefit from 1 July earlier this year.  What has the Government against expectant mothers that it will tax and reduce their benefit?  Shame on the Minister.

Finally, the household benefits package and the bereavement grant changes have been fundamental issues and the Minister has gone out of his way to attack the elderly.

I refer to two items.  One relates to the overall Government waste.  I would advise the Ministers to read the Comptroller and Auditor General’s report.  There is €300 million of waste in there.  The Minister, Deputy Howlin, is refusing to deal with it.  He has not even added it up.  His Department has stated that it has not even checked the figures in the report.  The Minister would be better eliminating that waste and inefficient use of Government resources rather than punishing the Departments of Health and Social Protection.

On how this budget will go down, I learned, when the Minister, Deputy Howlin, announced what the investments from the national lottery licence of 2014 will help fund, that this is the Government local elections slush fund.  There is €200 million to buy the votes in the local elections.  It is the Government’s local elections slush fund.  That was to be put into job creation but the Minister is using it to buy votes with such measures as road maintenance, sports capital grants, the indoor training arena, housing grants for the elderly, the city of culture initiative etc.

These are all worthwhile issues but the Minister is introducing them, from the proceeds of the sale of the national lottery which should have been ring-fenced and kept for the national children’s hospital, as a slush fund to buy votes in the local elections in May 2014.  I would ask the Minister to reconsider a number of those changes.

I do not know what the Minister, Deputy Howlin, has against young people in asking them to emigrate.  I do not know what he has against expectant mothers.  Especially, I do not what he has against the elderly, where he is hitting their medical cards, hitting their free telephone allowance and hitting them everywhere it hurts.  They will be afraid in their homes tonight.  They will be losing their alarm that they need in case of an emergency to ring a family member and 35,000 of them will be losing their medical cards as a result of this budget.