Speech by Cork TD Michael Moynihan, Fianna Fail Spokesperson on Agriculture Fianna Fáil Private Members Motion Dáil Éireann, 13 December 2011
The honeymoon for this government has come to an abrupt end. With this Budget, which contains your choices the reality of this government’s incompetence and arrogance has been laid bare.
In the course of this Budget debate, Minister Noonan, Howlin, Rabbitte and others have patted themselves on the back and spoken repeatedly of how the budget announced last year has succeeded in showing the world that Ireland is on the right track in consolidating its budget.
They have also pointed out how economic growth returned while that budget was in operation. It takes a hard neck to do that.
The facts are clear. The government voted and campaigned against last year’s budget – which Brian Lenihan introduced. Yet now they are trying to take credit for this work.
In some ways, I suppose, this is a backhanded compliment to Brian and what he achieved because at any time, over the past nine months, this Government had the numbers to alter or reverse the last Budget introduced by Fianna Fáil but chose not to.
The government didn’t because though they played to the gallery well, they knew that our policies were bearing long-term fruit.
The truth is that over the last nine months this Government has taken few significant decisions and has coasted on the back of plans already in place or ready to go. They coasted because Fianna Fáil had done the heavy-lifting.
Never before has a Government spent so much time praising itself as this Government, while actually doing so little. In the last week, the Government’s hypocrisy has begun to catch up with them.
In fairness, the Government has proven themselves adept at leaks and spin and distortion to manage expectations, even if that meant scaring the living daylights out of hard-pressed families across urban and rural Ireland.
At the end of a long month of leaks and press conferencees we have finally seen exactly how Fine Gael and Labour intend to govern.
We have finally seen them move from vague generalities to taking real decisions. We no longer have to take them at their word, and we can see the cold, hard facts of what are their priorities.
The Government has made their own choices and is accountable for them. Through the mountain of detail and the hours of announcements, what has emerged is a deeply unfair and damaging budget. It is going to hit vulnerable citizens and rural Ireland particularly badly.
This budget is the most regressive in years, it will cost jobs, it breaks an unprecedented number of promises made only months ago and it may lead to a serious shortfall in Government revenues as soon as early next year.
It will not promote recovery, it will endanger the achievement of fiscal targets and it will shift an unfair burden on to groups which are least able to manage.
The single most important element which will create jobs and ease fiscal pressures is overall economic growth. We support the fiscal target set in the budget. It is a reasonable compromise between the need to get to a sustainable deficit level and to protect the potential for growth in the economy.
My fear is that in the small print of this budget, there has emerged a deeply damaging and long term attack on the sustainability of rural communities in this country. Agriculture is a major growth sector for the Irish economy. Government policy must reflect its central part in job creation and food security but also its essential role at the heart of rural communities. This is particularly outlined in Harvest 2020 a document that the previous government launched and it has been correctly accepted as policy by this government.
These areas are intertwined and while last week’s budget contains some positive measures it fails to recognise the links between rural life and agriculture.
In this first budget by Fine Gael/Labour ,it should be said that, there are some small positives, such as the land transfer arrangements, but the broad sweep of the 2012 budget has been harmful to rural Ireland.
DAS and REPS 4 cuts will impact upon a wide range of farmers due to the new criteria. Reductions in the Farm Assist scheme will affect the most vulnerable farmers, some 11,239 of which are currently in receipt of this vital assistance. Taken together, I fear that these changes will on balance damage Irish agriculture.
While agriculture is critical, it is not the only ingredient in sustainable rural communities. It is in the systematic undermining of these communities where this budget does the most damage. For example, phased staffing adjustments in small schools with fewer than five teachers will be devastating in rural areas. Some 1,500 small schools will suffer from lower standards due to a higher teacher pupil ratio or potentially be forced to close.
Garda station closures are another attack on primarily rural communities. Public safety in some 31 communities will be undermined as stations close. The impact on quality of life in these communities is obvious.Knocknagree Garda Station in my own constituency gives our community a focus on safety and security and covers a vast area —
Septic Tank fees and upgrade costs is yet another area where people living in rural areas are being asked to bear a disproportionate cost. By demanding that 475,000 Septic Tank owners pay for this most basic service, the government is making a decision to actively discriminate against citizens living in the countryside.
Everyone knows that VAT returns pose the biggest concern for the Exchequer. They are well behind projections, while underlying consumer confidence is weak. The overall deficit target cannot be met if VAT returns continue to underperform and if the increase drives consumers away from already hard-pressed shops.
In rural areas retail outlets are a very important source of job sustainability and job creation .The VAT increase will impact on jobs .We are now in the bizarre position where the Government is making directly contradictory claims about VAT changes in different parts of its budget.
When it was cutting VAT for selected industries in June, it claimed that thousands of jobs would result. It stated cutting VAT was the best way to create jobs. Now, when it is front-loading VAT increases of 2% on a much wider range of goods and services, it claims there will be no impact on the economy.
The government can’t have it both ways and this sort of nonsense is undermining retail sector. It needs confidence and support not a sucker punch which is what the increase in VAT is to the sector.
This is strategically the wrong call and it has happened because Fine Gael is playing politics with the economy. The VAT increase has arisen because Fine Gael wants to be able to claim it has left income tax untouched.
Instead of targeting revenue measures at the highest earners as we proposed, – and which would be fairer – it was decided to rely on the most regressive tax, the one which, increasingly, is under-performing. This has introduced uncertainty into the programme of fiscal consolidation which the Government may come to rue.
It gives me no pleasure to say the net effect of the budget will be, unequivocally, the loss of more jobs in urban and rural areas.
A contraction of net employment in 2012 is confirmed in the budget documentation. This is more of what we heard from the Government at the time of announcement of its downgraded jobs budget. The most recent CSO figures (released Dec 12th) has confirmed that there was an annual decrease in employment of 2.5% or 46,000 in the 2011 to the third quarter .The seasonally adjusted unemployment rate increased from 14.2% to 14.4% over the last quarter.
The raid on the pensioners to produce a net €250 million for the Government’s so called “jobs initiative “is failing.
The measures announced to aid the export and construction sector are welcome, but, once again, they are being over-spun. The facts are, they are not enough. The action the Government has taken is so small that the budget documentation shows them as having no impact on growth or employment. They are also accompanied by an accelerated cut in capital spending. The €750 million being cut is substantially bigger than any stimulus package announced in the Budget.
In terms of societal impact, this is by far the most regressive budget in some time. The spending cuts and tax increases will fall, directly and disproportionately, on the weaker and poorer sections of society particularly in rural areas. As a republican party, Fianna Fail opposes this lack of fairness vehemently.
The disability cuts were hidden until there was a u turn when we spotted them on this side of the House. And we are glad that we have forced the Government to think again.
We still are not clear as to where or how the Government are going to achieve savings they claim they can get in expenditure for loan parents, child benefit, job seekers and widowers payments. We have seen over the last few days that those who are in receipt of carers allowance will now have their Family Income Supplement cut .The government have tweaked the eligibility criteria for this and other welfare payments but we did not see any headlines about these choices!
Like an iceberg, the real danger in this Budget is lurking below the waterline. We have not seen clearly yet the full extent of the Government’s assault on the vulnerable. This will become more apparent as time moves on because no amount of spin or camouflage can keep the nature of these cuts under wraps forever.
During the general election debate what the number one social justice priority would be if he were elected to government, the leader of the Labour Party, now Tánaiste, said, “I think it would be looking after people with disabilities … The first area that Labour in government would address in terms of equality and in terms of giving decent supports to people would be people with disabilities. I think, as a country, we have to make that the priority.” The leader of Fine Gael, now Taoiseach, followed quickly with the words, “That’s very laudable and I share that.”
Those words ring hollow in the aftermath of last week’s Budget.
In our party’s budget proposal, Fianna Fail show how government can meet its targets and still deliver greater investment in capital projects to create jobs and to invest in Ireland’s future. In addition to government funding, we are proposing that pension funds would invest in commercial projects, in partnership with the state.
This is a credible and workable alternative to the government’s pension levy. It’s not too late for the Government to change its mind.
Fianna Fáil set out how budget targets can be met in a fairer way. Speeding up agreed reforms, focusing tax increases on the highest incomes and driving further efficiencies can deliver the required savings. One in every five Irish homes is experiencing real mortgage difficulties. It is time for more action to help them.
We have introduced legislation to give practical help to families in debt and we ask the Government to take it on board.
The banks too have a responsibility to our society and they should never forget it. They should lend to our businesses and they should pass on interest rate reductions to our homeowners.
In rural Ireland in particular it is small and medium sized companies that are employing people. There are very few “FDI companies” in my constituency of Cork North West.
People either farm the land or work in the local shop, school, district hospital or Garda station .None of these areas are safe under this government –“the devil was truly in the detail” in this budget as when the education proposals were announced the pupil teacher ratio cut was hidden deeply in the brief mention of career guidance counselling services being cut.
The cuts in education will overwhelmingly fall on rural schools .The disadvantaged schools mentioned are inevitably those within rural schemes .There are teachers in my constituency who have concluded that the needs of rural communities did not enter the Minister’s thinking as all cuts in the primary pupil teacher ratio are being confined to schools of four teachers and fewer-the majority of which are in rural areas and provincial towns.
And to add insult to injury so that people in rural areas would not feel discriminated against enough, Minister Quinn decides to double the school transport charges and these only apply to rural areas! The cuts in post graduate grants involve removing the maintenance element of the grants-rural students living away from home rely on this more than any other group.
This government has a big majority and a duty to respect the mandate it sought and received from the people. But, as proposed, its Budget breaks too many promises, makes too many wrong decisions and will hold back rather than promote job creation and job sustainability across rural Ireland.