Statements on Budget 2014


Seanad Éireann

Statements on Budget 2014

Minister of State for Public Service Reform and the Office of Public Works, Brian Hayes TD

Speaking Notes

Tuesday 15 October 2014



Senator Jillian van Turnhout: I welcome the Minister of State to the House. I will premise my statement by underscoring the importance of addressing today’s budgetary measures and fiscal adjustment, the sixth in line of extremely difficult budgets since 2008, and the context of their cumulative impact since this is the reality of the way they are being experienced by people.

As a Senator this is the third time I have made a statement on the budget and it is safe to say, and no doubt the feeling is shared by many members of the public, that my sense of disillusionment and powerlessness has been compounded on each occasion. It is a sense that nothing has changed about the way we do our business. I welcome what the Minister said about the European aspect but as far as we do our business, I do not believe anything has changed.

I have said on numerous occasions in previous statements on the budget and in response to various social welfare provisions that Ireland, while on the road to recovery, is still in serious financial difficulty and money must be saved and generated but how this money is saved, be it from cuts to existing provisions and services or exploring alternative revenue-generating measures such as tax increases and against whom the cuts are made, are ultimately political decisions. There is a strong public perception that the decision has been made to persistently target vulnerable groups and re-hit already stretched and hard-pressed families.

Accusations have been made that such decisions are made with political capital considerations in mind. There is a certain class of people that have remained largely unscathed by successive budgets. They are young employed individuals without children and without a mortgage. Effectively, that grouping has remained unscathed. I have spoken with many of those people in the course of my work and I have heard time and again that they are willing to shoulder their share of the burden more fairly. After each budget they are grateful they did not get hit.

I believe it is a mark of a decent and humane society to ensure that those with the lowest income and least resources are protected from further cuts. I recall when dealing in April 2012 with the impact of the provisions on lone parents in the Social Welfare and Pensions Bill 2012 feeling that anything I had to say was futile since the relevant decisions had already been made. It almost felt disingenuous to be kicking up a fuss knowing that whatever I said, nothing would change but I spoke to the groups advocating for lone parents on the ground and they convinced me of the importance of ensuring that their voices, and the voices of their constituents, made it on to the record.

The voices of civil society organisations and NGOs on the ground, which witness the impact of the decisions and cuts we debate in these Chambers, must be heard. We need to reconsider our mechanism leading up to the budget, to have a greater engagement with those organisations and not have a showpiece hearing where the relevant decision makers are not present. This is also why I feel so strongly about the move to restrict the access of the NGOs to the AV room to have political briefings. We need to be very careful about our decisions. We should not close off or close down dialogue and open ourselves to accusations that political decisions are being made in a vacuum.

Moving to today’s budget, I very much welcome the decisions made, particularly in the Department of Children and Youth Affairs, and the additional funding of €6.7 million in 2014 to reform child protection. I know that money will go to the new child and family agency. It is really positive that it is being moved into the Vote of the Department of Children and Youth Affairs. I am very concerned at the talk that the new agency will start with a deficit. The agency will be taken out of the HSE and created, and there is talk of transferring a deficit. That will be regressive and I will watch it closely.

I welcome the implementation of the preschool quality agenda for which there is funding of €4.5 million. Additional inspectors will be recruited. There should be nationwide coverage. I wholeheartedly endorse the idea of a preschool mentoring service. We need mentoring in that sector to bring quality up to a consistent level and not to see more scenes such as those we saw in the “Prime Time” programme entitled Breach of Trust. We need to support staff training.

I also welcome the initiatives to tackle child poverty at a local area level. A cut of €3 million in youth work funding was projected for 2014, and we are supposed to heave a sigh of relief that it is only €2 million. This sector has been disproportionately cut. We know that for every €1 the State invests in youth work it saves €2.22 in the long run. Youth work organisations around the country are under huge pressure. The youth council proposed the introduction of a 1% social responsibility levy on drinks manufacturers. I notice in the budget that €145 million is saved in the excise duty added to alcohol. Why can youth workers not receive some of that additional money? They do not take funding from drinks companies. All too often we hear it said of the sports organisations “Oh dear, they cannot afford to let go of the drink sponsorship”. Youth organisations say “No” to drinks companies because of the ethos of their organisations. They work with young people, as do the sports organisations. Youth organisations say “No” and I do not see why a measure like that cannot be found for them. I welcome and note the increase in tax on tobacco.

If one is in the 18 to 25 year age category one had no hand in creating the situation in which we now find ourselves yet there is a disproportionate reduction in the jobseeker’s allowance. That is very tough on young people. Yes, they should be encouraged into education and training but the reality is that the places are not available for them.

Minister Hayes: There is a 100% increase as announced today in the budget in places for that age cohort.

Senator van Turnhout: The places are not there. There is an urban-rural divide. I hear all too often that young people are being forced back into the family home. Once again, there is a geographical lottery.

On the tax exemption for starting one’s own business, does someone need to wait to be unemployed for over 15 months? We know most businesses do not make money in the first two years. I wonder what this measure solves.

It is great that the €14 million youth guarantee has been announced. I am however a little concerned about the figures and I will study this more closely. It seems very low. Much of this is based on the Swedish model but the Swedes estimated that it would cost €6,600 per participant. They estimate that it will cost €273 million to implement in Ireland, based on their figures. That is phased over several years but €14 million seems very low, given that we need to spend it before we recoup it from the EU. While it seems like a large sum it is too low to implement the youth guarantee as it is envisaged—–

Minister Hayes: Is it not matching?

Senator van Turnhout: No. The Government must spend it first then recoup it. That is why I am concerned about the €14 million because we must spend it before we recoup.

I warmly welcome the free GP cards for children aged five years and under but we must ask ourselves about the discretionary medical cards. What children will lose out? In the Irish Examiner there is a very good case study profiling some of the cases that have lost out. It is excellent to have a rights-based approach to introducing the free GP card and they should not be confused with one another. I am concerned about this and I am hearing these concerns from parents around the country. I welcome the grant for the protection of the homeless.

I am concerned about the tax credit for the one-parent family. I want to explore it further to see what implications it has for families. I hear that the mental health budget has been reduced. We never seem to be able to spend the money.

 Minister Hayes: It has been increased by €20 million.

Senator van Turnhout: I hear that the overseas development aid budget has been reduced by €14.1 million. I have a difficulty with the kind of society we are creating. I have voted for tax increases. I voted for property tax.

Minister Hayes: It is not enough.

Senator Darragh O’Brien: Some 3% on those over €100,000.

Senator van Turnhout: Senator Mary Ann O’Brien and I have put forward ways in which the Department of Health can save a significant amount of money on children with life-limiting conditions. The Minister of State should not talk to me about solutions. I keep putting them forward.

Minister Hayes: It is not enough.

Senator van Turnhout: I keep putting them forward. The Minister of State has not even taken one step in the right direction on that issue. I have concerns about maternity and adoptive benefit. I ask the Minister of State to look at my record. I have put down solutions in this House. I have tried to be fair and equal in what I have said. Some of the measures are hidden. These small cumulative cuts will affect people.


OECD Review of Irish Pensions System: Statements

Wednesday, 15th May 2013

I welcome the Minister to the House. When the Minister has the opportunity, I look forward to her publishing and discussing her planned roadmap for long-term pensions policy in Ireland. This debate shows the interest we have in the policy.

As time is limited, I wish to share my initial thoughts on the OECD review. I have two major concerns regarding the manner in which the pensions system is operating – our ageing population and the State’s reliance on current expenditure to cover pension costs. I will address the latter first.

Private companies fund their pension schemes through future liabilities, but the State uses current expenditure. In the private sector many pension schemes have been adjusted, modified or even closed to new entrants and it has been necessary to cut entitlements. While I am not happy about any of this, it is the reality of what is happening. However, there is a real generational issue and the current generation is set to lose out. The ESRI report published yesterday shows clearly that those who are in their 40s or under are bearing the brunt of the recession. The national pensions framework published in March 2010 showed that there were six workers to each pensioner. However, that figure will be halved by 2032 to a ratio of 3:1 and by 2050 there will only be two workers to each pensioner. Moreover, that is not guesswork but mathematics.

The ratio in the public sector is more startling and has been exacerbated by early retirements and the recruitment moratorium. The same generation that is disproportionately affected by the recession through high unemployment, mortgage arrears and negative equity will also be obliged to pay the price of a pensions shortfall unless the issue is dealt with. By the time this generation retires, there will be nothing left in the pot. There is a social insurance fund deficit of €1.5 billion per year.

According to KPMG, the deficit will reach €324 billion in the next 55 years unless action is taken now. This sum of €324 billion is a phenomenal amount. It is nearly twice the national debt and more than twice Ireland’s GDP in 2011. Consequently, we really must get serious about talking about solutions and not simply talking about the ageing population. There must be discussions on whether benefits will be reduced or whether PRSI contributions will be increased. It has been estimated that PRSI contributions would need to be raised by three quarters from now, were that bill to be met over 55 years. That is an indication of how serious this matter is. Consideration must be given to providing an incentive for employers and employees to invest. Senator Paschal Mooney mentioned the position in Australia, but I note the Labor Party Government there introduced that scheme in 1992 with a 3% contribution. Thereafter, over a 15 year period, the Australian authorities raised the figure to 9%. Perhaps there is an opportunity to start at a figure of 1% or 2% at a low age and then to raise it. I do not suggest this is the answer, but the figures are dramatic and drastic and this is not a problem out of which one can hope the economy will naturally lift Ireland.

It is known that the earlier one starts to invest in one’s pension, the better. As the Minister stated, the basic State pension in Ireland is relatively generous when compared with that in other OECD countries, but I note retirees in other countries often receive bigger pensions overall because they contribute to mandatory pension schemes. That is their culture and the system. I also note the recent European Union White Paper, An Agenda for Adequate, Safe and Sustainable Pensions, concluded the financial pressure of an ageing population inevitably would lead to longer working lives and the need for private pension funding to fill the gap left by reductions in public pensions. One need only consider the situation in Waterford Crystal regarding its defined benefit scheme. One worker retires and receives 100%, but six months later the next one retires and receives between 18% and 20%. Is that fair or equitable?

I will move on briefly to the issue of the ageing population. Everyone is aware that in common with the rest of Europe, Ireland has an ageing population. A total of 781,000 people, or approximately 7% of the population, are aged 60 years and over. This figure is expected to double by 2050, when it will account for 29% of the population. An ageing population will have serious consequences for Ireland, including longer working lives, lower economic growth, labour shortages, reduced consumption, considerable pressure on women to fill the gaps in the labour market, alongside caring for children and elderly relatives, and a considerable reduction in the social insurance fund and the National Pensions Reserve Fund. However, Ireland does have something in its favour – its birthrate. One cannot consider these issues in isolation and Ireland must invest in children. It is our collective responsibility, given that in economic terms, children are a merit good. Children have value to others beyond their family as future taxpayers and workers whose contributions will help to fund State pensions. I will sum it up in one line from the English MP, Mr. Frank Field, who said, “I may not have children; but I need someone to have them if my pension is to be paid.” Therefore, let us invest in children also.

Finance (Local Property Tax) Bill 2012: Committee Stage

20th December 2012

I move amendment No. 3:

In page 9, between lines 23 and 24, to insert the following:

” “Act of 2003″ means the Capital Acquisitions Tax Consolidation Act 2003;”.

I referred to this on Second Stage and I do not want to take up too much time today. The Minister stated that in principle the properties that I have raised in these categories, those held by trusts for children and youth activities, would be exempt in a similar manner to that of the household charge. I would prefer to hear from the Minister first.

Deputy Michael Noonan: Senator van Turnhout seeks an exemption for residential properties owned by discretionary trusts and charities.

The Thornhill group expressed concern that the exemption provided for in the household charge legislation for discretionary trusts was a potential vehicle for tax avoidance. It considered that it would be relatively easy for a property owner to place the ownership of properties into a discretionary trust and for the trustees to rent the house back to the person setting up the trust or to a family member for a nominal or no rent.

As regards Senator van Turnhout’s amendment of an exemption for charitable bodies, the Thornhill group considered that the local property tax should be centred on principles of equity, transparency and simplicity. Accordingly, I consider that a universal liability should apply to all owners of residential property with a limited number of exemptions. In an effort to keep the rate of tax low and to ensure equity between taxpayers, the Government decided to minimise the number of exemptions to the tax and to limit deferral arrangements to cases where there is a real and material inability to pay the tax.

There will not be a blanket exemption for charitable bodies and in this context, the recommendation to provide an exemption for local authority or social housing providers was limited to special need cases. In practice, the majority of housing provided by registered charities would be expected to be exempt from the tax as it is provided to those who require special accommodation and support to enable them to live in the community. Revenue will be providing guidelines in this regard.

I understand that Senator van Turnhout’s interest is related to her association with the Irish Girl Guides, which organisation owns some properties which are used for breaks and holidays for members. I appreciate that groups such as the girl guides and many other organisations in the community and voluntary sector provide facilities and work with young people and with other sectors for social and personal development purposes. Such organisations were granted exemption from the household charge for the buildings in question and I am disposed to ensuring that the exemption would continue. The matter will be examined and will be dealt with in the finance Bill.

I will not accept the amendment as currently cast because I will not give a blanket exemption to discretionary trusts. However, I will examine the possibility of extending an exemption to bodies such as the girl guides in the context of the finance Bill.

An Leas-Chathaoirleach: That should be music to Senator van Turnhout’s ears.

Senator Jillian van Turnhout: I appreciate the Minister’s answer and I will await the finance Bill.

Social Protection: Statements

24th October 2012

I welcome the Minister to the House. We are all very acutely aware of the facts and reminded on a daily basis of the serious financial difficulty we have and the shortfall of €16 billion. There are also requirements under the terms of the EU-IMF bailout agreement to reduce our borrowing for 2013 by €3.5 billion. The Minister’s Department has a budget of €20.5 billion, accounting for 40% of overall Government expenditure, and I am very aware she is required to reduce the budget by €540 million in 2013. I appreciate the difficult decisions that have to be taken and cuts that must be made.

To build on the comments of my colleague, Senator Zappone, in the first part of this debate last week, there is a question about how these cuts are made and against whom they are directed. These are ultimately political decisions. There is nothing more disheartening as a Senator than to feel my interventions about any budgetary cuts are futile in the face of a done deal, so I welcome the Minister’s reassurance that no decisions have been finalised in respect of the 2013 budget.

We need to stop plugging the dam and looking for immediate savings, which are ultimately bankrupting us of our moral fibre. As a Government and society we must firmly establish our red lines, or the values and principles that we are unwilling to yield. An example of this was aptly articulated yesterday in the audiovisual room by the community and voluntary pillar, when it presented an alternative budget for 2013, with values such as dignity, sustainability, equality, human rights and working for the common good. Such values inherently seek to protect children, the elderly, disabled, weak, vulnerable and marginalised, it makes for a value system that I support and endorse.

We must articulate a vision for the Ireland we want in ten years, developing strategies that are necessary to achieve this vision by incorporating values and aligning them with national policies. We can do this and I do not agree that Ireland is bound by the current policies for achieving the €3.5 billion reduction in borrowing as set out in the letter of intent, memorandum of economic and financial policies, and the technical memorandum of understanding. Within the document I note the paragraph following the proposed revenue measures and expenditure reduction in the memorandum, which states:

Without prejudice to the minimum consolidation amount referred to in the previous paragraph and to the requirements to achieve the agreed fiscal targets, the Government may, in consultation with the staff of the European Commission, the IMF and the ECB, replace one or more of the above measures with others of equally good quality based on the options identified in the comprehensive review of expenditure.

I am not alone in reading this to mean that Ireland is free to change the method through which the requisite saving is made, once it is made.

It is interesting to note that Social Justice Ireland agreed with 130 of the 131 recommendations made by the Commission on Taxation report from 2009 on tax breaks. The exception was the recommendation on child benefit. Lists of savings are possible, and I strongly encourage the Government to consider the proposals. I do this on behalf of the more than 700,000 people in Ireland, of which 200,000 are children, at risk of poverty, and the more than one in four children between age 12 and 17 already living in poverty. The Oireachtas Library and Research Service gave a good presentation earlier this morning on the survey on income and living conditions, SILC, demonstrating that households with children are at more of a disadvantage and are more likely to enter poverty. Our current policy is not working, although it may satisfy the troika and meet international requirements. It is not working for the raft of Irish people bearing the brunt of the cuts.

In preparing for today’s discussion I pondered how we have a multi-annual plan for the troika and education officials are considering school infrastructure, responding to change in demographics with a multi-annual plan. The action plan for jobs brings us up to 2016. The plan for the country’s people, however, is missing. Where is that plan? I have spoken with friends who are holding on to savings despite being encouraged to spend. When there is no plan for the people, it is an issue.

Those living in extremely marginalised and vulnerable conditions do not know where the safety net is and feel it keeps moving. They are walking on this tightrope and are asking where the safety net is because it has moved again.

We need to look not only at one budget – all the focus now is on budget 2013 – but at things much more in advance. The programme for Government referred to working across Departments. If one looks solely at the issue of child benefit, the question is whether we tax or means test it rather the Minister’s Department looking outside itself and asking why we are giving child benefit and the purpose of it. Is there a better way to achieve the outcomes we wish other than by purely looking at cash transfers? I suppose I am trying to encourage the Minister and her colleagues in Cabinet not to look simplistically at cash savings but to have a plan for the people to say this is where we are going. We can do it for jobs and for the troika but can we do it for the people?

Statement by Senator Jillian van Turnhout, Independent, on “Why I am voting Yes on 31 May”

Statement by Senator Jillian van Turnhout, Independent,


“Why I am voting Yes on 31 May”

“I wish I could stand before you today and say that the Fiscal Stability Treaty is the answer to our economic woes, but that is simply not the case. A Yes vote will not deliver us an immediate return to prosperity any more than a No vote will give us an instantaneous end to austerity.

Normally when we approach a Referendum a No vote means maintaining the status quo whilst a Yes vote means something will change. Unusually in the case of the Referendum on the Fiscal Stability Treaty I believe the opposite is true. If we vote Yes, I don’t see huge changes in our economic policies which are already set. However, if we vote No, then there will be consequences such as the removal of the safety net of our access to the European Stability Mechanism funding, or indeed facing the deficit crisis alone.

After thinking long and hard about which option would serve this country best, it appears to me that a Yes vote is the only logical conclusion, as even if we were to reject the treaty we will still remain legally bound to most of the fiscal discipline measures it entails under the Stability and Growth Pact and the Six Pact reforms. In essence the Treaty is merely a restatement of our commitments, only now other countries will also be expected to fulfill these commitments.

Thus, the real economic battle ground is not the Treaty, it is to ensure that the Government realises its commitment to growth. I believe to date the Government’s policies have been set to remedy and redress our economic woes. I have supported the Government on most of its policies but not all. We now need to focus on Recovery and Growth.

There is no doubt that we are living through a crucial time in the history of the European Union. In an EU of 27, we have 27 voices, each trying to articulate a point of view. If you do not speak, are not audible, are not coherent, you will be forgotten. To influence decisions, we must engage.

We need to make our mark. We need to increase public debate, to reinforce citizens and civil society’s involvement in the shaping of EU policy. We need to be able to stand up and play our role in the EU. We need to be a critical friend whilst ensuring that we are not airbrushed from the European landscape.

To sum it up! I will be voting Yes on 31 May because…When the music stops Ireland shouldn’t be without a seat at the table.”


Social Welfare Bill 2011 – Committee Stage and Remaining Stages

15th December 2011

I thank Senator Mooney. I am of the view that the Minister’s presence in the Chamber may be influencing the true gentleman’s approach.

This is one of the two sections to which Senator Zappone and I are opposed. As an Independent Senator, it is difficult to deal with the Social Welfare Bill because one’s heart must be ruled by one’s head. I want to oppose all cuts but I feel I must highlight those relating to child benefit and the lone-parent allowance above the others that are being made. I welcome the Government’s decision not to reduce the basic rate of child benefit of €140 for first and second children. I am, however, greatly concerned regarding the decision to cut the rates for third and subsequent children. I am also concerned about the decision to discontinue the once-off grants relating to multiple births.

My objections in respect of this matter are twofold. First, I am concerned that what is proposed will increase the exposure of larger families to poverty. The loss of €19 per month for a third child and €17 per month for the fourth and subsequent children equates to a total loss of €432 per year for a family with four children. On the face of it, this figure might not appear overly disturbing. However, it represents a loss of financial support for larger families. The effect the cut in child benefit will have on the 23% of families in Ireland with three or more children cannot be viewed in isolation. It must, therefore, be considered in conjunction with the cumulative impact of the raft of other cuts made across budget 2012 that have specifically affected families and, more particularly, already vulnerable families on low incomes that are reliant on social welfare. In this regard I refer to the cut to the one-parent family payment and the fuel allowance and the increase in health and education costs.

Recent CSO statistics indicate that among those whose consistent poverty rate rose from 6.3% in 2009 to 9.6% in 2010 were families with three or more children. These statistics also attest to a widening gap between the haves and the have nots in Irish society. I wish to provide some examples in this regard. In addition to the €432 families comprising two parents and four children will incur as a result of the cut to child benefit, those eligible for the back to school clothing and footwear allowance will lose a further €310. This will lead to a total loss of €472 per year. If these families live in rural areas, they will lose €1,612 per year as a result of the cuts to which I refer and the increases in respect of school transport. A family consisting of a lone parent and two children will lose €537 per year as a result of cuts to the back to school clothing and footwear allowance, the fuel allowance and the increase in the minimum contribution towards rent supplement. As already stated, the cut to child benefit cannot be viewed in isolation.

The State is constitutionally obliged to protect the unit of society that is the family. However, there is genuine and growing concern among the organisations which deal with struggling families that these new cuts will push many over the edge into deprivation, poverty and despair and will further compound the misery for those who have already crossed that threshold. Children are the most vulnerable members of any family unit and any hardship visited upon that unit is most acutely felt by them.

On Second Stage the Minister compared the rate of child benefit in this country to that which is paid in Northern Ireland. I remind her that while the rate of payment in the latter jurisdiction is lower, in order to compensate for this the system which obtains there provides a raft of other child-related benefits for those who qualify. I refer to free school meals and transport, a preferential maternity allowance, a national health services allowance, access to the start strong health scheme and the sure start maternity grant. I could also provide examples from France and Sweden — I do not want to take up the House’s time in doing so — in order to show how other jurisdictions offer additional child-related benefits which compensate for lower baseline rates of payment. When making comparisons, we must ensure that we take all aspects into consideration.

The second matter to which I wish to refer is the importance of supporting and encouraging a high birth rate in Ireland. The decision in respect of the once-off payments for multiple births displays a lack of strategic thinking. This is the very time when we need to think outside the box. We need to encourage and support a healthy birth rate in Ireland because this will, in turn, support and sustain economic growth. Ireland is in the enviable position of having the highest birth rate in Europe. In July of this year, it stood at 16.5%. The next highest ranking country is the UK, with a rate of 13%. However, Europe as a whole has an increasingly ageing population. The Oxford Institute for Ageing estimates that within 20 years, Europe’s largest population cohort will comprise those over 65 and that the average age will be 50. An ageing population has significant implications for the labour force, the health service, the education and welfare systems and also in the context of technology and development.

I am of the view that child benefit payments reflect the values of our society. It universally demonstrates that children are cherished and that the Irish public wants to support their well-being. I am not stating that we should provide support through benefit payments. I would be happy if we were to support families through the provision of services. At present, however, we do not provide support in this way. As a result, removing the payment is not acceptable.

There is a collective responsibility in respect of this matter. In an economic context, children are what might be termed “merit good”. In other words, they have value to others beyond their families. As future taxpayers and workers, their contributions will assist in the payment of State pensions. Mr. Frank Field, a British MP, is credited with saying “I may not have children but I need someone to have them if my pension is going to be paid”. The State must send out a signal to the effect that it supports and encourages childbirth. The children of today are essential to our future economic recovery. I, therefore, urge my colleagues to oppose section 8. Cutting child benefit and discontinuing once-off grants in the case of infrequent multiple births is not the way forward.

Order of Business, 6 December 2011

6th December 2011

All of the talk of Ireland having experienced four years of hardship conjures up a notion that, before that, we had a shared prosperity. That simply is not true. Long before the economic downturn and subsequent slide into full-blown recession, tens of thousands of people lived in hardship, in poverty or at risk of poverty, struggled to raise families and care for elderly and disabled relatives, and hundreds slept rough on our city streets. Whatever way one looks at the measures put forward yesterday by the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, they will impact overwhelmingly and disproportionately on those who have always been vulnerable. Following the Minister’s delivery of the proposals in the Dáil yesterday, we were obliged to seek information from different Departments. That is not reform. Reform would involve all of the relevant information being made available at once.

I join Senator O’Brien in condemning the proposed change to the disability allowance. It is the provision which stood out most for me from yesterday’s announcement. What is the rationale behind this measure? We are talking about young people with profound and multiple disabilities. They are not going into training schemes or work placements. In regard to the lone parent allowance, I have gone through every line of every document that was provided yesterday, but I cannot find the figures to justify this decision. What arrangements will be put in place for the transitional phase in respect of those who are currently in receipt of the allowance? A huge number of concerned lone parents are wondering what will happen on 1 January. There are no figures in any document produced yesterday from any Department which provide the rationale for this decision. Surely any decision which has such a significant impact on such large numbers of people should at least be an informed decision.

I am equally concerned about what is happening at EU level in advance of Friday’s summit. Serious decisions lie ahead of us, decisions which may ultimately make today’s discussion irrelevant. We must have a debate on what is happening in Europe. We are part of the EU and we must inform that debate.

Budget 2012 – Statements

6th December 2011

When I was speaking earlier this morning, I should have wished a happy St. Nicholas day to my colleagues in the Netherlands, for whom today is gift-giving day. I do not think the same can be said for here. I can understand now what people mean when they say that something was a game of two halves. There are many aspects of the budget about which we can speak positively, and there are some good initiatives, but due to the time constraints I am going to highlight the areas in which I have concerns and which I feel need more considered attention. Also on the subject of the time constraints, we need to consider having a debate in which Senators have an opportunity to make statements, because in this debate, the Minister, whom I greatly admire, took up a quarter of the time Senators had to give their statements.

The Minister for Public Expenditure and Reform, Deputy Howlin, said yesterday in the Chamber that we need to ensure the burden of our economic recovery is shared fairly. Sometimes I wonder about this. We talk of Ireland having experienced four years of hardship, which conjures up a notion that before that, everything was all right. Unfortunately, it was not. For many of the groups we are discussing today things were not just fine. The painful process of adjustment that the Minister for Public Expenditure and Reform spoke about yesterday impacts overwhelmingly and disproportionately on those who are and were already vulnerable. At the same time, there remain significant numbers of Irish citizens who are insulated and largely unscathed by this afternoon’s and yesterday’s announcements.

I understand it is unrealistic to expect that everybody should have the same standard of living, but we should be striving for greater equality of opportunity. The foundation for that must be protection from poverty, hardship and despair. Can the Minister confirm that the VAT increase of 2%, which will absorb 1% of the disposable income of the bottom 10% of earners but only 0.35% of the disposable income of the top 10% of earners, is an example of every effort being made to ensure that the burden of economic recovery is being shared fairly?

The budget was announced in two segments but it is actually split into multiple pieces. We still have a situation where each Minister is producing statements and I am still trying to work through all the details. Reducing the back-to-school clothing and footwear allowance has a severe impact on families. The Minister for Education and Skills hinted that he might examine directly off-setting that towards school uniforms or books. I would have liked that announcement to have been made. I also urge caution to my colleagues and the Minister for Social Protection. Yesterday, she compared child benefit rates with those in other countries. If one wishes to compare, one must compare like with like. While child benefit rates in Ireland are high, other countries provide free child care, free school books, free uniforms and free health care, so we should compare like with like.

This morning I raised the issue of the disability allowance for young people. The rationale is that we do not want young people with disabilities to be dependent on an allowance. However, many of these young people have profound and multiple disabilities. They are not going into training schemes or work placements, irrespective of their desire to integrate and participate fully in society. I realise that many people are getting allowances which might be questionable, but I am referring to the people with multiple and profound disabilities. There is no rationale for this and I urge that it be reconsidered. In addition, there is confusion about to whom the cut in disability allowance will apply. Will the Minister of State confirm that nobody currently in receipt of the allowance will have the payment reduced?

On the Order of Business this morning I took the opportunity to raise a number of questions and I am disappointed that I received no answers in the Minister of State’s opening statement today. Lone parents are very fearful at present. I talked to a number of them today. The budget introduces a number of measures which will have a severe impact on parents. There were a number of measures last year and they expected more, but they did not expect the drastic changes to come upon them so quickly. I looked at the figures in an attempt to justify the decisions, because I am trying to consider these decisions and their justifications fairly. I cannot find the rationale for this. We put questions to the Department of Social Protection but there are no figures to justify the decision. Again, there is a lack of clarity about how the cuts are to be implemented and what the transitional arrangements will be.

Budgets are about choices. The Minister can say it is easy for me to make these remarks but the Government decision to keep excise duty on alcohol at the same slashed levels as previous Governments, for example, means it has lost the opportunity to generate €178 million. If it had generated that amount, it would not have been necessary to make the changes to the lone parent, disability and fuel allowances or to student fees.

Order of Business, 16 November 2011

16th November 2011

I echo the congratulations to the Irish team, which has given us all a boost. Perhaps we would like to skip over the budget and get straight to the European matches. Unfortunately, we cannot.

I have concerns at the kite flying that is happening. Vulnerable hard-pressed families are reading headlines every day and wondering what will happen. We should all be careful with our comments.

I echo what Senator Bacik said about St. Patrick’s Institution and seeking a debate in the House. It is of extreme concern and a gross violation of our human rights record. For the sake of the children in vulnerable situations we need to act as soon as possible.

Today, I raise the issue of transition year students. Most of us are aware of the transition year programme which promotes the personal, social, vocational and educational development of students and prepares them for their role as autonomous, participative and responsible members of society.

Recently, I received an application from a transition year student to work for one week in Leinster House as part of the work experience programme. I was informed that this is not possible. What better way to achieve these goals than by allowing young people to experience a working environment through one of the work experience programmes offered by most schools that conduct the transition year programme? The Houses of the Oireachtas lacks any dedicated structure to facilitate students who wish to experience the working life of the Parliament. Work experience is available for second level students with members of parliament in the European Parliament and the British Houses of Parliament. Why can we not do it here? Even closer to home, Dublin City Council offers second level work experience.

This experience is extremely valuable, would give students an insight into our work and would help them understand what we are doing here. I call on the Leader and the House to examine ways in which the Seanad could put in place a one week programme once a year to provide transition year students with an opportunity to listen to some of our key debates and a chance to partially shadow a Senator. The programme could be open to a lottery and provide to a limited number of transition year students an opportunity to see what we do. I ask that this be given serious consideration and I would be happy to give any support and assistance I can.

Statement on Paying Anglo IBRC Bondholders by Senators Zappone, Van Turnhout and Mac Conghail

Statement by Senators Katherine Zappone, Jillian van Turnhout and Fiach MacConghail Paying Anglo (IBRC) Bondholders

Today is a judgment day. The government’s judgment call to repay the €715 million bond to senior unsecured and unguaranteed bondholders at the Anglo Irish Bank has been made with undue haste. As Independent Senators we call on the government to delay its decision to re-pay this bond until there has been a full public debate, inclusive of answers to the following questions:

1. Anglo Irish Bank issued this bond on 2 November 2006 and since that time Anglo’s bonds have been traded on the open market for as little as 50 cent on the euro. Some of the investors in this bond, therefore, bought when they were heavily discounted and no doubt will make a huge profit when the bond is redeemed at full value. Furthermore, we don’t know who the actual bondholders are.

Prior to re-payment Irish taxpayers deserve answers to the following questions: who are these bondholders? Why should we repay full value to them, which, in effect, amounts to rewarding speculative investment in an unsustainable property market?

2. While the Irish government did attempt to re-structure this particular bank debt it has been unsuccessful, largely due to the fact that the ECB insists on no bank ‘default’ whatever the circumstance. In effect, the ECB is asking ordinary Irish workers and citizens to bear the full burden of the mistakes that were made by international financial markets. Some of these mistakes, however, are at least partly attributable to following deregulation and liberalization policies that were advocated by the ECB and the IMF and these policies provided significant benefits to the financial sector. The circumstance with regard to this bond is that a bank that is being wound down holds it and some of the bank’s actions are the subject of investigation.

Prior to re-payment Irish taxpayers deserve an answer to the following question: Is there no circumstance whereby it is right and proper for a Government that is part of the European Union to take a decision to discount or write-down bank debt?

3. The Irish Government is currently attempting to re-negotiate repayment of the €31 billion promissory note to Anglo Irish bank. Figures provided by the Minister for Finance in response to a PQ show that the cost of the promissory note will ultimately be €74.63 billion by the time it is paid off in 2031. This includes the capital repayments, the interest payments to Anglo and the cost of servicing the state’s debt in borrowing this sum. If the Government is successful in re-negotiating repayment for a longer period of time, say for example thirty or forty years, the cost to the Irish taxpayer will be considerably less than the €74.63 billion.

Prior to re-payment of Anglo bond due now Irish taxpayers deserve an answer to the following question: Can the Irish government defer payment of the Anglo bond until it secures agreement with the ECB on a longer timeframe to re-pay the promissory note?

4. Hundreds of Irish citizens have been in direct communication with us as public representatives, arguing that they should have a say in how the finances of this country are spent, and that they do not give their consent for payment of the Anglo bond. Rather, they ask: ‘why not use this money to make this year’s budget a less harsh affair for us?’

We think that Irish citizens and taxpayers deserve a full debate of these issues prior to re-payment of the Anglo bond as it is Irish taxpayers money that will be used to pay this debt. Citizenship participation should be considered an integral part of Government strategy to bring about long-term sustainability of the Irish economy.

2 November 2011 Ends.

Notes to Editor: As of 15:30 this afternoon we have been unable to receive confirmation from either the Government or from the IBRC that the cheque has been issued.