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Budget Statement 2013 (Continued)

Wednesday, 5 December 2012

Dáil Éireann Debate
Vol. 785 No. 2

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(Speaker Continuing)

[Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath] We all accept that it would have gone up far more but for the safety valve of emigration. A total of 87,000 people, mainly young people, left our shores in the 12 months to April 2012. When the Minister took office, he said employment levels would grow by 0.5% in 2012. He now says they will fall by 1.2%. He said unemployment would be 13.7% by the end of this year. He now admits it will be just under 15%. He is now predicting no increase in employment levels throughout next year. All the fanciful talk of 100,000 jobs under NewERA and the five point plan has been long forgotten. The five point plan has not been seen since February 2011.

The most alarming aspect of this is the dramatic increase in the number of people who are long-term unemployed. A total of 60% of people out of work are now long-term unemployed. What are we doing for them and where are the jobs? Can we really say we are putting enterprise at the heart of everything we do? Can we say we are doing everything to support the 200,000 small businesses in this country who provide almost 700,000 jobs? We know these businesses will lead the economic recovery if we give them the capacity to do so. These businesses are starved of credit. The Minister knows that banks are not meeting the lending needs of this economy. Even when AIB came before the Oireachtas Committee on Finance, Public Expenditure and Reform, it confirmed that the new lending it has extended so far this year is €600 million, not the €3.5 billion the Minister says it is providing. They are loans that are repackaged and approvals that never get drawn down because the conditions and interest rates are so onerous that the borrower would never have the capacity to draw down that money.

The Minister said the economy would grow by 2.5% in real terms in 2012. He now says it will grow by 0.9%. He said it would grow by 3% next year but has now halved that and says it will grow by 1.5%. He said private consumption, which is the driver of the domestic economy, would grow by 1% in 2013. He now says it will fall by 0.5%. He said exports would grow by 6%. We are now told they will potentially grow by 3%. The warning signs were there in respect of the public finances and Exchequer returns yesterday, particularly in respect of the self-employed. The €300 million deficit in income tax last month should have set the alarm bells ringing and the Minister should be giving that sector every support he can in its time of need.

I had hoped and half-expected that the Minister would pull a rabbit out of the hat today in respect of the promissory note and bank debt. I am, sadly, disappointed. I wish him well in his ongoing negotiations. The technical talks on the promissory note have been ongoing for about 14 months. They must be extremely technical. We have not seen any paper so far and would love to see one and have an input into it. I wish the Minister well in that because it is important for the country and we will do everything we can to support the Government to get a deal on bank debt. The Minister also needs to be honest with people in respect of the use of the European Stability Mechanism. It will be at least a year before there is any relief in that aspect of bank debt and he might as well call it as it is and tell people what the position is.

Deputy Michael Noonan: Information on Michael Noonan Zoom on Michael Noonan The previous Government agreed to all those things.

Deputy Mattie McGrath: Information on Mattie McGrath Zoom on Mattie McGrath The Government could have changed it.

(Interruptions).

An Leas-Cheann Comhairle: Information on Michael Kitt Zoom on Michael Kitt Deputy Michael McGrath, without interruption.

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath This budget day is one which many ordinary families have been dreading. They are looking to this House and Government for reassurance about their future. They want a Government that will lead them through this economic crisis in a fair and compassionate way. The harsh reality is that today's budget will put an unbearable financial burden on many families. This budget reaffirms the approach of a Government that has broken almost every promise it made to the people at the beginning of last year. People were looking to this budget for a sense of hope and for some sense that the Government understood what their lives are like. This Government has the numbers to put through whatever budgetary measures it wishes, but on the basis of what has been presented today, getting public acceptance of these measures will be a far greater challenge.

Deputy Sean Fleming: Information on Seán Fleming Zoom on Seán Fleming I look forward to making a contribution on detailed aspects of the budget. I want to highlight issues that will affect the majority of ordinary families and people. This budget effectively tightens and squeezes the majority of families. Despite promises that this would be a fair budget, it is anything but. It follows the pattern of last year. Fine Gael defended its constituency of high earners while Labour capitulated on its so-called core values. Contrary to grandiose claims, this is not a radical or reforming Government, rather it is a complacent one. The Minister for Social Protection presides over a €685 million overspend, while the Minister for Health must look for another €360 million this week. Everything this Government does is dictated by political expediency, as demonstrated by the unseemly row and horse trading between Fine Gael and Labour Ministers in the run up to the announcement today.

Over the past two years and during the previous election, commitments were given to the people which today are being broken. Put simply, this is a U-turn budget from a U-turn Government. In every area from third level fees to child benefit to class sizes to carers' payments to employees' PRSI to property tax, Government parties have shown they are willing to say anything to get elected until they are safely ensconced in their offices when they cast those promises aside. We are witnessing a Government that is obsessed with style over substance. Last month, the people voted in a referendum to enshrine children's rights in the Constitution. Today, the Government is cutting child benefit. That is its answer to the people who voted in the referendum. It is also cutting the overall budget for the Department of Children and Youth Affairs by an additional €16 million. That is happening a few weeks after the people at the Government's request enshrined the rights of children in the Constitution. The response of this Government is to cut child benefit and funding for the Department of Children and Youth Affairs.

Labour has spoken out against the bank guarantee on many occasions in the past. Despite this, last week, every Labour Deputy voted to renew that for a further 12 months. The Government claims it wants to protect the most vulnerable, but last year, it introduced a budget that was unfair and this budget is the same. The test of fairness is how one goes about achieving the adjustment of €3.5 billion. This side of the House accepts this figure must be achieved, but the test of fairness is how one goes about it. The Government has discretion as to how to apportion the split between additional taxation and expenditure cuts. We believe fairness dictates a 50-50 split between tax increases and expenditure reductions. Once the decision was made by the Government to load the burden of the €3.5 billion on expenditure cuts, it was inevitable that this budget would hit the poorest and most vulnerable the hardest. Fairness went out the window in the interests of political expediency.

I will address specific measures in the budget and will inevitably concentrate on issues that affect families, children and parents. The cut in child benefit can only be described as an anti-family measure. Today's €10 reduction in child benefit, taken in conjunction with last year's reduction, will take €200 million out of families' incomes. The reduction makes a mockery of Labour's red line approach on child benefit about which we have heard before. Child benefit is a core payment to 600,000 families that helps sustain the health, wealth and well-being of 1.5 million children. Child benefit is a universal payment that provides vital income support for families in meeting the costs of rearing children, especially during a time of unemployment and economic hardship. In October, the Minister for Social Protection told us she would only consider cutting child benefit when we were able to offer Scandinavian levels of child care.


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