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Financial Resolution No. 5: General (Resumed) (Continued)

Wednesday, 14 October 2015

Dáil Éireann Debate
Vol. 893 No. 1

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(Speaker Continuing)

[Deputy Joan Burton: Information on Joan Burton Zoom on Joan Burton] We are also in a position to increase another very important support for vulnerable households, the fuel allowance. It will be increased by €2.50 a week to €22.50 for the duration of the fuel season. This means tested payment targets households with the most need for income support. This increase will benefit almost 381,000 low income households. There is not a Deputy in the House who does not know some elderly person or some other person living on their own perhaps in rural Ireland. The fuel allowance is incredibly important for them. As things improve for us, it is appropriate that the Government has agreed to resource that in a better way.

  The social protection system has long ceased to be solely about income supports. Since 2011, the Department has also become a public employment service offering services to employers to identify and hire the right people. We have some of the best people who unfortunately are still without employment. In some cases they have engaged with the networks to find employment having lost their job and not being able to find another.. That is critical because secure and fairly paid work is the single best protection against poverty in the long term. It is the single best path to financial independence for a person or a family. The Labour Party has always been the party of work, and the party of workers’ rights. This is another pro-work budget, another budget designed to ensure that work pays. The increase in the minimum wage to €9.15 an hour from January is a hugely important measure for low-paid workers.

  I pledged earlier this year that if we increased the minimum wage, we would address any PRSI effect that would arise from such an increase. We are doing precisely that in this budget. I am introducing a new tapered PRSI credit for class A PRSI employees earning between €352 and €424 in a week. This will reduce the weekly PRSI bill for over 88,000 employees and will be on top of the gains from the USC changes announced in the budget. In addition, the lower 8.5% class A rate of employer PRSI will be extended to over 26,000 employers as we increase the employer threshold from €356 to €376. To further support families in work, the income thresholds for family income supplement will be increased by €5 a week for families with one child and €10 a week for families with two or more children. This will result in an additional €3 or €6 per week for low-income working families in receipt of the family income supplement. This measure will benefit some 60,000 families who, among them, have more than 131,000 children. In addition, lone parent families who transitioned from the one-parent family payment to the jobseeker’s allowance transitional arrangements will benefit from changes to the latter, increasing the disregards and lowering the calculation of the means. Put simply, these measures will ensure additional income for lone parents in the workforce and help them build towards financial independence over time. Both the family income supplement and the changes in regard to the lone parent transitional payment are particularly designed to improve the situation for low income households and to encourage them in a situation where no one in the household is working to get at least one of the people in the household out working for a significant amount of time.

  Coupled with all these measures are very significant investments in our schools, in health care, in housing and in other essential public services. For example, since the beginning of 2012, we have invested more than €1.25 billion in school buildings. We have built 102 new schools and completed 71 large-scale school extensions. Our primary schools have achieved the best reading and mathematics results in 30 years, thanks to the great work done by the former Minister, Deputy Ruairí Quinn-----

Deputies: Hear, hear.

Deputy Joan Burton: Information on Joan Burton Zoom on Joan Burton -----and now his successor the Minister, Deputy Jan O’Sullivan, is equipping primary and post-primary schools for the next wave of improvement.

This budget will deliver more than 2,200 new teachers and reduce the pupil-teacher ratio by one point at both levels. This is something that people involved in teaching have strongly recommended. We agreed with the recommendation but we did not have the resources to implement it. I am delighted to say that we do have them now. Again, this is about both progress and opportunity, the progress in making our schools better, and the enhanced opportunity that this provides in turn for our children. In all of this, we are investing in our future, investing in Ireland's potential, and we are doing it in a responsible and sustainable way. Our deficit will fall to just 1.2% of GDP and our debt-to-GDP ratio will fall to 93% next year. I know those figures do not seem incredibly important but they are. It means that next year our debt level will have fallen to just slightly below the eurozone average. People have seen that in recent days we borrowed €1 billion on the debt markets for 15 years, which is very long-term money, at an interest rate of 1.65%. This budget is firmly based in having the structure that meets the requirements of the EU treaties. Our debt-to-GDP ratio for 2015 will have fallen to 97% from the high that we inherited of over 120%. That means that we are bringing down the debt as we grow the economy. That is precisely the way the Keynesian and social democratic economists approach the business of putting an economy and a society back on its feet. We are doing this.

The difference could not be clearer. The single most striking thing about the Opposition's response to this budget has been the sense of absence and the sense of confusion. By "absence" I mean the absence of any serious idea to address the hard issues of the debt and deficit, which we have to do, in order to be able to borrow money at cheap rates. At the same time we have to be ambitious, to improve both the tax situation in terms of people at work and the provision of vital services for everybody in our country as well as providing solid income supports for people like pensioners who rely on social welfare in retirement. When I took over from the previous Minister for Social Protection, I faced a deficit, or a hole, in the Social Insurance Fund that was rapidly approaching €2 billion. I am happy to say that this year it will be down to a figure of just over €120 million. With the rate of job creation for which we are so ambitious to achieve, and which involves the people who come back to work contributing to PRSI, we should be in a position to have a surplus in the Social Insurance Fund next year.

Deputies: Hear, hear.

Deputy Joan Burton: Information on Joan Burton Zoom on Joan Burton That is important for people who are paying for a contributory pension. Rather than every commentator writing about the hole in the Social Insurance Fund as they did prior to Fianna Fáil leaving office, we can now say that we have restored the security and stability of that fund and we can fund and pay pensions to people in retirement.

Deputies: Hear, hear.

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