Government fails leadership test - Budget 09 has no job creation proposals and attacks working families
Sinn Féin Finance Spokesperson Arthur Morgan TD described Brian Lenihan's first budget as a bad budget and said the government failed the leadership test. He said "Today Sinn Féin wanted to see the beginning of a three year plan to get the economy back on track. The government has not delivered such a Budget. The Minister had committed to the building of a strong economy and to protect the most vulnerable in society. He has done neither. There are no job creation proposals and vulnerable families will be worst hit by hikes in direct and indirect taxation. The 1% income levy, VAT increases and fuel tax will hit working families and small businesses struggling to survive."
Deputy Morgan said:
"The government promised to look after the most vulnerable but they didn't. They said that they would ensure that top earners paid their fair share but they didn't. They promised frontline services in health and education would be protected but that didn't happen either. Change is possible and it should have started here today. It didn't, and the state will be poorer off next year because of it. Rather than reversing the current recession the government seems intent on deepening it.
"We knew that given the public finance shortfall, this Budget would be tough but Brian Lenihan's first budget is a bad budget. Today people wanted to see the beginning of a three year plan to get the economy back on track. Central to that is creating and retaining jobs and addressing the shortfall in public finances. The Government fell far short on both counts today. They failed the leadership test.
"This morning Finance Minister Brian Lenihan said that their priority was to protect the vulnerable and to ensure that those who earn the most pay the most in tax. He said that he supported a progressive tax system. This would be a major u-turn in policy if this was delivered. But it hasn't been. Instead this Budget only tinkered at the sidelines of the taxation system and stealth taxes, as opposed to an actual overhaul, would be used to bring in money.
"In fact he has made the situation far worse for many families, particularly those most vulnerable. The income levy and the VAT increase are a disgraceful attack on people on low incomes. They are neither fair nor progressive. Those who gained about €2 a week from the extra .5% in the recent partnership deal will now pay double that (€4) a week through the 1% income levy.
"I welcome the decision of the Minister to take on board our proposals to increase the PAYE tax bands to meet the annual increase in the cost of living, the increase in betting tax and DIRT. However we have serious concerns regarding other measures. The proposed income levy is regressive. While it is positive that people on over €100,000 will pay more (2%) the fact that all those on under this figure will pay at the same levy means it disproportionately hits those on low incomes. It approaches being a flat tax.
"The increase of the 21% VAT rate by .5% is also regressive. It will hit low income families and does nothing to reverse the state's dependence on consumption taxes, one of the key contributors to the current public finance difficulties.
"Prior to the budget we had called for all discretionary tax relief schemes to be available at the standard rate. This would have yielded €1billion to the Exchequer. It is staggering that the Minister only tinkered with this.
"It is also hard to understand why the government failed to abolish the ceiling on PRSI. The Social Insurance Fund will have more pressure on it in the time ahead until we can get people back into work, and this measure would have provided essential resources.
"I am also concerned that there was no firm proposals on ultilising the National Pension Reserve Fund. We had called for this money to be used to fund critical infrastructure projects that would improve competitiveness and provide jobs. There is now a concern that this fund will be used to help recapitalise the banks.
"The fear amongst the most vulnerable in society - that this Budget would harm them most - has been realised. This system is meant to aid those in need, whether they have lost their jobs, are a family with a low income, old aged, disabled or ill. Social welfare is not charity for the state to dole out at will. It is a right and an entitlement and the money within the system is put there every year by taxpayers, conscious of the fact that they might one day need to access it.
"The increases in individual payment increases will do nothing to make next year any easier for those struggling with poverty. We called for increases of €15 for each social welfare payment. €6.50 per week will disappear into the cost of living before it is even paid. €7 per week for pensions is a slap in the face to the generation which built this economy.
"The Government mentioned fuel allowance increases. Two weeks is a step in the right direction, but not enough. €2 is entirely inadequate. Failure to protect our most vulnerable in this Budget will do nothing to fix our economy next year. It will merely create more poverty traps, more misery and more social problems in the years to come.
"This Budget needed to look to the future. It had to deliver a new value for money ethos. It had to have a vision for job creation. It had to deliver funding to those departments that will help the economy in the long-run, such as education, and to those dealing with the fall-out from years of underfunding, such as health. Instead, it tinkered at the edges of the crisis, made cuts where they will hurt the most and displayed no real political leadership to get this state back on its feet again. We needed a brave Budget. Instead, we got a blinkered Budget." ENDS
Sinn Féin Budget 2009 Speech
I welcome the opportunity to respond to the Minister for Finance in this Budget debate.
US President Harry Truman kept a plaque on his desk that read 'The buck stops here'. For the last year, as we witnessed the turn in the tide of our economy, this Government has run itself along the lines of 'the buck stops nowhere'. I want to make it clear to this Government that the buck does indeed stop with them. They are in charge. They were quick to take the credit for the boom. They must take the responsibility for the bust.
Sinn Féin approached this Budget prepared to support any measures that would stabilise and re-invigorate the economy; prioritise job creation; address the massive shortfall in public finances; deal with cost-of-living pressures; and provide solutions for those who have become unemployed or who face unemployment.
We argued for the Government to see this budget as an opportunity to turn around the Irish economy. We wanted a budget that was about more than just balancing the books, an approach we believe has the potential to drive us further into recession, rather than lift us out of it. We wanted it to show vision for a new economic model - one based on sound industries like R&D, exports and a thriving indigenous SME sector, capable of delivering the revenue needed next year to revive the public finances.
Today people wanted to see the beginning of a three year plan to get the economy back on track. Central to that is creating and retaining jobs and addressing the shortfall in public finances. The Government fell far short on both counts today. They failed the leadership test.
They promised to look after the most vulnerable but they didn't. The said that they would ensure that top earners paid their fair share but they didn't. They promised frontline services in health and education would be protected but that didn't happen either.
We can rebuild the economy but that means taking bold decisions. It means investing in infrastructure that will create jobs and build competitiveness, it means helping those who have lost their jobs get back into the workforce as quickly as possible and ensuring that they are supported properly while that happens. It means ending the era of tax breaks for the rich while PAYE workers struggle to survive. It means advancing the all-Ireland economy. Change is possible and it should have started here today. It didn't, and the state will be poorer off next year because of it.
Lead up to this budget
We have witnessed an extraordinary economic period. Gross Domestic and Gross National Products increased exponentially in the last decade. Ireland turned from an emigrant country to a destination for economic migrants. We saw an explosion in purchasing power, as evidenced by the growth in home ownership, in high-end cars, and in quality brand names on our shopping streets.
Simultaneously government policy ensured that massive private debt accumulated; as the pay gap widened; as the void between the rich and poor became more obvious and precarious.
The Government spent wildly during this period - mostly on tax breaks for those who least needed them, in keeping the consultant industry in business and on wasteful pet projects. They didn't use Budget surpluses to turn Ireland into a first world model. They used them to buy elections.
Anyone believing that the opposition spokespeople who preceded me would have implemented different economic policies that would have led the state down an alternative path, need only cast their memories back to their parties' pre-election manifestos in 2007. Both promised tax cuts, alongside increased public spending. They criticize Fianna Fáil now, but they shared the very same economic outlook then. But it was the Government that did the damage.
This Government has presided over many investment failures, particularly with regard to value for money. There was no strategic investment in broadband, in revitalising rural Ireland, in renewable energy, ports or public transport, with a few minor exceptions like the LUAS. Of the few infrastructural projects undertaken, few came in on time or on budget (Port Tunnel).
The Government's property-based tax reliefs left us with lots of hotels, car parks and shopping centres, instead of social housing, rail-lines and wind farms. Now, we are facing into a period of virtually no infrastructure development. The projects indicated by this Government as set to continue are all projects already started. Where are the NDP commitments. Where's the investment in the Metro North and West. Just how is the state supposed to develop its competitiveness when it doesn't have something as necessary as universal high speed and quality broadband provision?
As well as failing to invest, the Government took reckless decision after reckless decision in relation to the tax system. Measures were introduced to the tax base which resulted in a dangerous overdependence on construction and consumption-related revenue. Stable sources of tax were cut. Their failure to grapple with the mistakes they had made in the tax system was reflected in abysmal fashion throughout this year and last in their inability to project from month to month what was coming into the state's Exchequer.
As a result, this Budget had to take into consideration a projected tax receipt shortfall of €6.5 billion for 2008 and now an exchequer deficit of €11.5 billion. To put this in perspective, I recall Brian Cowen assuring us this month last year that GDP growth in 2008 would be in and around 3%, more modest than we were used to, but growth nonetheless. Instead we have seen an unprecedented negative turnaround in growth. Unemployment has reached its highest level in a decade, resulting in lower income tax returns and a growing demand on the Social Insurance Fund. Inflation, running at 4.3% in September, has impacted on consumer spending and consequently consumption revenue, with VAT returns €1.1 billion behind target to date.
The Property Boom
The Government have pointed to international forces for the downturn, and tried to deny the fact that the policies they pursued lacked foresight, encouraged instability and indulged speculative greed. The global downturn has impacted on international trade and the banks' liquidity issue poses its own problems, but the Government could have left the state in a much better position to cope with the crisis.
Instead of building the state's competitiveness, Fianna Fáil and their construction partners left us economically dependent on the construction industry, with stamp duty rising from 3 per cent of the Government's total tax take in 1997 to 8 per cent in 2006, accompanied by huge VAT from house build costs.
The growth of this sector allowed the Government, the heads of the industry and the banks to profit from people getting themselves into debt in order to own a home. In the interim, the Government abandoned real economic development. Our export market was ignored. The banks took the Government's lead. At the recent ISME conference, business people pointed out how the banks didn't want to know them over the last ten years, unless they had property. They couldn't borrow for start-ups unless they had property attached to their business plan. The same small and medium enterprises are being denied overdraft facilities now by property-burdened banks, banks that are simultaneously nursing developers' loans.
The Government's unconditional support of property developers harmed this state's competitiveness. Property tax reliefs ate into money that could have funded necessary infrastructure. High property prices had a further detrimental effect on business as rents spiralled.
Yet the Government, right up until they took their lengthy summer break, were claiming that the fundamentals of the economy were sound. They're still repeating this.
Claims, such as those made recently in the 'Catching the Wave' report about our export market, are deeply misleading.
Foreign-owned firms based here were responsible for 90.2% of all our exports in 2006.
The indigenous export sector is crying out for Government intervention.
The domestic market is as badly off. The Government has failed to tackle the flooding of the Irish market with cheap imports. It hasn't dealt with contentious issues like sell-by-dates, and incorrect 'guaranteed Irish' labeling. These were two issues mentioned by Cappoquin chicken owners before the company went into liquiditation and had to be sold to foreign owners only willing to pay the staff minimum wage to keep it operating.
Sinn Féin were attacked by all of the parties in this House when we stated that government economic policy was not sustainable and would come crashing down. Now that it has, we firmly believe that the most important role the Government can play in the current crisis is to ensure that there is employment for the many people being made redundant, including in the construction sector, and also to ensure that people are not made homeless as a result of negative equity and repossessions.
The debate in the run-up to this budget, held in the houses of the Oireachtas, in the media and on the street, has centred around how little money the Government would have to run the state next year, how much it would need to borrow and where it would have to make cuts. Sinn Féin throughout this debate has argued that the actual focus should be on how to create jobs next year to turn the economy around and build a revenue stream that would make cuts in the following Budget unnecessary.
Vested interest lobby groups have pushed the line that it is Government overspend that has caused problems for the Exchequer and called for cuts to be made. However, our public spending is actually the third lowest in Europe. Only Lithuania and Estonia spend less than we do. And we are coming from a very low base. Far more spending would have been required over the last decade to build the required physical and social infrastructure that would have developed the state's competitiveness, as well as eradicating poverty. Unfortunately, what was spent, was, in the main, spent badly.
Other groups have launched attacks on public sector personnel. I have no doubt that there are efficiency savings that can be made in the public service. In this time of financial turmoil, value for money is essential. But the last things we need in this state is to see the numbers of nurses, guards or teachers reduced.
We need reviews of bodies like the HSE. We need leadership from the members of this very House - how many I wonder are holding onto jobs in the public sector while sitting as elected representatives, thereby continuing to hold onto pensions and other entitlements in these jobs? We need an end to disproportionate bonuses, given regardless of performance, like the ones reported in the media last weekend. We do not need cuts that will harm frontline services and prolong the recession.
Sinn Féin highlighted the spending that was needed to help the most vulnerable in society - because their lot has not improved over the last decade. Many people will tune in to the Six-One News tonight to learn if anything has been done to help them pay their exorbitant mortgages, to keep them in employment, to provide books, uniforms and school meals for their children, to provide childcare places so they don't have to fork out thousands each month in private facilities, to alleviate their health costs, and reduce the impact of inflation on their diminishing wages. I'm very conscious of those in more desperate situations, the people who have become unemployed and are struggling to get by on inadequate welfare payments, who are at risk of fuel and food poverty this winter, who fear for their children's and their own health, who face eviction from unscrupulous landlords, or the repossession of their homes by banks.
We called for supports for the most vulnerable in our pre-Budget submission because we believe it is the responsibility of government to protect the weakest first. You take care of the children and the elderly. You take care of the sick, the poor and people with disabilities. Then you worry about everyone else.
Stabilizing and rebuilding the economy
The Government could have shown more foresight. They could have put in place a three year plan to get the economy back on track. Instead they engaged in a book keeping exercise.
Another American President, Franklin D. Roosevelt, turned the tide of his country's economic fortunes with the establishment of what was known as the New Deal, which saw widespread government borrowing to fund major public works, employing millions and slowly bringing the economy back to life. The New Deal showed initiative. It showed courage.
Sinn Féin argued in the run-up to this Budget for immediate economic stabilization measures to be taken. These included:
Prioritizing job creation, including an immediate retraining programme for construction workers to direct them into renewable energy and other industries and;
Frontloading National Development Plan commitments in social and affordable housing, and school building. This would not only provide necessary infrastructure but also secure jobs and tax revenue. Yet, investment in social housing is down 2% and investment in affordable housing down 30%.
At the end of 2007, the National Pension Reserve Fund contained €21.2 billion. In March 2008 the fund was estimated at €19.4 billion. Money is clearly being lost on the stock markets, though much of that is only on paper until it is withdrawn and realized, but it would be more responsible for the Government to use a proportion of this fund for infrastructure investment. We also called on the Government:
To take action to reduce the cost of living pressures on the low paid and those dependant on social welfare by establishing an anti-inflation package and delivering social welfare increases;
To bring forward a set of proposals to reduce the cost pressures on small businesses;
To put in place specific programs to support indigenous businesses seeking to boost their export capacity.
And to overhaul the tax system to assist those on low incomes and ensure that those at the higher end of the scale pay their fair share in order to generate sufficient revenue for medium term investment and current spending demands.
We also, in the wake of the decision at the start of the month to guarantee the banking system, called for the Government to use the guarantee as a further way of contributing to the Exchequer and stabilizing the economy. We want to see a windfall payment made to the State by the banks as payback for the taxpayers' insurance, and a bank levy introduced on the banks' profits as part of the new regulatory regime. We want shares in the banks and the state to take positions on the banks' boards, so we can monitor the interests of the taxpayer. In addition we want measures to be introduced as part of the guarantee that will protect people facing home repossession by placing a responsibility on the banks to take whatever steps are needed to reschedule the mortgage payments of low income families. MABS should be put on a statutory footing so they have the authority to negotiate with the banks.
As well as stabilizing the economy next year, this Budget should have aimed to stimulate it in the medium to longer term.
Sinn Féin wanted to see NDP investment prioritized for public transport, communication, health, education, renewable energy and childcare. We wanted investment in education and training programmes linked to information technologies. We also wanted delivery of the National Action Plan for Social Inclusion.
Our approach to this Budget has been unique. Instead of focusing on cuts, we focused on revenue generating ideas and on job creation.
It is a poor indication of what we will face in next year's budget that this Government did not take the same approach, but chose instead to make savings in areas which can least afford them.
I'll now deal with the measures introduced in the public finance section of this Budget.
For too long we have had a taxation system that has been biased in favour of the well off. I have already mentioned how this Government's policies led to a complete instability in the tax system, but nobody should think that that instability was an accident of design. We have the fifth lowest tax take in the Union. The tax structure by tax type - indirect 44 per cent, direct 40 per cent and social security contributions 15 per cent - differs considerably from the structure typical for the EU as a whole, where on average there is less reliance on indirect tax.
The fact is, if you have high VAT, if you have a range of stealth taxes on everything from A&E visits to waste management, this will have a disproportionate effect on those with the least in their pockets.
Sinn Féin has long called for the tax system to be reformed. We believe that there are people in the system paying too little and people paying too much.
The biggest con-trick the Government ever played on the people of this state is convincing them that we have a low-tax economy. We have - for people who are well off. Everyone else is paying through the nose.
In our pre-Budget submission we called for the Government to undertake a rolling review of taxation, through the Commission on Taxation, with a view to increasing the number of income tax bands.
This morning Finance Minister Brian Lenihan said that their priority was to protect the vulnerable and to ensure that those who earn the most pay the most in tax. He said that he supported a progressive tax system. This would be a major u-turn in policy if this was delivered. But it hasn't been.
Instead this Budget only tinkered at the sidelines of the taxation system and stealth taxes, as opposed to an actual overhaul, would be used to bring in money.
In fact he has made the situation far worse for many families, particularly those most vulnerable. The income levy and the VAT increase are a disgraceful attack on people on low incomes. They are neither fair nor progressive.
I welcome the decision of the Minister to take on board our proposals to increase in the PAYE tax credit to meet the annual increase in the cost of living, the increase in betting tax and DIRT. However we have serious concerns regarding other measures. The proposed income levy is regressive. While it is positive that people on over €100,000 will pay more (2%) the fact that all those on under this figure will pay at the same levy means it disproportionately hits those on low incomes. It approaches being a flat tax.
The increase of the 21% VAT rate by .5% is also regressive. It will hit low income families and does nothing to reverse the state's dependence on consumption taxes, one of the key contributors to the current public finance difficulties.
Prior to the budget we had called for all discretionary tax relief schemes to be available at the standard rate. This would have yielded €1billion to the Exchequer. It is staggering that the Minister only tinkered with this.
It is also hard to understand why the government failed to abolish the ceiling on PRSI. The Social Insurance Fund will have more pressure on it in the time ahead until we can get people back into work, and this measure would have provided essential resources.
I am also concerned that there was no firm proposals on ultilising the National Pension Reserve Fund. We had called for this money to be used to fund critical infrastructure projects that would improve competitiveness and provide jobs. There is now a concern that this fund will be used to help recapitalise the banks.
The minister said that no vested interests were served in this budget yet the Construction Industry Federation's demands on cutting commercial stamp duty were almost wholly met, by slashing this tax from 9% to 6%.
We proposed a number of additional revenue producing initiatives such as increasing motor tax for the highest emitting non-commercial vehicles; increasing the health levy by 1 per cent on those earning over €100,000; introducing legislation to end tax exile status and ending state subsidies to private schools.
The fear amongst the most vulnerable in society - that this Budget would harm them most - has been realised. We've all heard the reports that freezes would be made on social welfare payments, that child benefit would be taxed, that the Department of Social Welfare had the biggest expenditure and is a so-called drain on the public purse strings.
This system is meant to aid those in need, whether they have lost their jobs, are a family with a low income, old aged, disabled or ill. Social welfare is not charity for the state to dole out at will. It is a right and an entitlement and the money within the system is put there every year by taxpayers, conscious of the fact that they might one day need to access it.
If the Department of Social and Family Affairs budget is rising, the Government should look at why so many are accessing the system and set about finding solutions to get people off social welfare and back into employment. That is the Government's responsibility, not to make savings that will harm the most vulnerable.
This Budget did not take that sensible approach. Instead it chose to make savings by cutting payments like the Early Childcare Supplement. This supplement was introduced as a poor attempt at dealing with the absolute lack of a functioning state childcare policy. There was no attempt to make this cut equitable in any way. In a recent Parliamentary Question I asked how much money would be saved were this payment only to be made to families earning less than €100,000 per annum. The response based on revenue estimates was that this process of payment would save the state €71 million. Did the Government undertake any kind of study regarding this proposal before it made this decision, or did it just arbitrarily decide to slash a percentage of the payment to everyone? The announcement to potentially tax child benefit is reprehensible. Have there been any new childcare places provided? Will extra provision be given for school meals and books schemes? Likewise, the decision to end it for 18 year olds is a disgrace, if its coming in line with additional college fees increases.
The increases in individual payment increases will do nothing to make next year any easier for those struggling with poverty. We called for increases of €15 for each social welfare payment. €6.50 per week will disappear into the cost of living before it is even paid. €7 per week for pensions is a slap in the face to the generation which built this economy.
The Government mentioned fuel allowance increases. Two weeks is a step in the right direction, but not enough. €2 is entirely inadequate.The Society of St Vincent de Paul reported a 50% increase in requests for assistance in the first half of 2008. Threshold has highlighted the significant increase in illegal evictions caused by landlords running into mortgage arrears, and a dramatic increase in home repossessions. Merchants Quay reported an 11% increase in the numbers of meals it provided to homeless people this year. Failure to protect our most vulnerable in this Budget will do nothing to fix our economy next year. It will merely create more poverty traps, more misery and more social problems in the years to come.
I want to deal now with health. When cuts were mentioned in advance of this Budget, the Government stated quite clearly that they would not affect front line services in health and education.
This Budget is an attack on our health services. The paltry increase in funding falls far short of clearly identified needs and will undoubtedly lead to a deterioration in services.
Health cuts were introduced before last year's Budget and have accelerated since. This very morning patients were being turned away from Our Lady of Lourdes hospital in Drogheda because of overcrowding. My colleague Caoimhghín Ó Caoláin has learned that a promised much-needed additional A&E ambulance will not be provided to Monaghan General Hospital. The additional Orthopaedic Unit at Our Lady's Hospital in Navan looks set to close for four months. Mary Harney and Brendan Drumm have promised that cuts would not affect patient care, but there we have the proof of it. This Budget will speed up the process. Patients will suffer and patients will die as a result.
Far from being 'savings' these cuts are short-sighted and will cost more in the long run. The cuts in Home Help hours and other services in the community for older people will force more of them from their own homes and into expensive nursing home care, much of which will be subsidised by the State at huge cost.
The closure of hospital services across the State for weeks on end to stay within HSE budgets is another false economy as hospital staff continue to be paid and facilities maintained while they are closed to patients.
With rising unemployment leading to an increase in the numbers of people eligible for the medical card, it is essential that services for medical card patients are maintained. GPs must be discouraged from setting quotas for medical card holders. It is wrong that entitled families are refused by doctor after doctor.
The Government has failed to fulfill its own commitments to index the income thresholds for medical cards to increases in the average industrial wage and double the income limit eligibility of parents of children under 6 years of age, and treble them for parents of children under 18 years of age with an intellectual disability.
When the over-70s non-means-tested medical card was introduced we in Sinn Féin asked why the same principle was not applied to people under 18, to people with a range of medical conditions or, indeed, to all citizens. Now this scheme has been withdrawn. This demonstrates the lack of consistency and the inequity at the heart of Government health policy. This will hurt many elderly people who do not meet whatever means criteria set out for the medial card now.
End payouts to Private Health business
Given the current shortfall in the public finances, it is crucial that the Government ends the massive waste of resources and inequality caused by the two-tier public-private health system.
Cost to the Exchequer of tax foregone in capital allowances to the developers of private hospitals rose from €1.9 million in 2004 to €10.6 million in 2006, with figures for 2007 and 2008 not yet available. The cost in 2006 alone would fund over 6,000 extra full medical cards for a year.
The private hospital co-location scheme is another massive subsidy to the private health business. The cost of tax breaks for these developments is not yet known. The land to which they have been given access is a huge asset which will be lost to the public health system.
Ultimately, the only guarantee of equal access and real efficiency in our health services will be fundamental reform and the establishment of a universal public health system with access based on need alone, free at the point of delivery and funded from general, fair and progressive taxation.
Sinn Féin wants to see the immediate establishment of a Health Funding Commission to report within a year on the costs of the transition to a new single-tier, public health system with universal provision, taking into account all spending on health services under the current systems, including State funding and spending on private health insurance.
Education is another area which the Government promised to protect from cuts in this Budget. Given that the system is barely existing on its current funds, a marginal increase is akin to cuts in very real terms.
We accept that we are in a new economic environment, but the education sector must be part of an overall strategy to reverse the current economic outlook and to ensure the long-term stability of the Irish economy. We cannot build a knowledge economy if we do not invest in knowledge from pre-school right up.
Perhaps the most blatant neglect and disregard shown to our young people by the Government is in the area of school buildings. The Minister has effectively deceived the Dáil on this issue. Not only did investment for primary level school building not go up, it was reduced by 5%. PPP costs have gone up by 30%. The recently introduced school buildings programme is completely inadequate. Only 25 schools are to benefit, which means hundreds of schools will be disappointed. One third of our primary schools have applied for a new school or need building works on their existing school. Glenswilly National school in Donegal has actually renamed itself 'seeking an extension since 1992'.
This programme came on the back of the revelation that many schools that have been given approval for extensions cannot proceed to construction because the funds provided only cover a fraction of the actual cost.
The Department of Education spends €35.5 million per annum on prefabricated buildings. This is money down the drain. I spoke earlier about how the downturn in the domestic building sector provides an opportunity to address historic underfunding of school buildings in a way that will provide real value for money. Now is the time for immediate re-commencement of the School Buildings Programme to ensure that all schools with unsafe and substandard accommodation are upgraded immediately.
I must also draw attention to the inadequate Primary Capitation Grant system. Energy costs, waste disposal charges, water charges along with cleaning and hygiene costs have increased dramatically. Schools can no longer meet these costs.
On average, after receiving all funding available from the state, each primary school has an average annual debt of €23,000. This means that €82million has to be raised by parents, friends and school boards this year to cover the debts of primary schools throughout the state.
This places pressure on parents, many of whom are struggling to make ends meet in the current climate. This is a pressure that should not exist in a state with so-called free education.
It is a scandal that many schools are forced to organize collections of supermarket tokens in order to acquire resources.
This Budget allows no funding to solve the problem of classroom overcrowding. The Programme for Government commits the Government to, and I quote, "increase the number of primary teachers by at least 4,000. This will enable us to reduce class sizes." The aim is to reduce class sizes to 24 by 2010/11.
Yet, almost 100,000 children remain in classes of 30 pupils or more.
The lack of funding in this sector has also had detrimental effects on the identification of children with Special Needs, and failed to solve the issue of illiteracy. An estimated 500,000 Irish adults have a literacy difficulty. This is an educational crisis.
To have any hope of developing the economy, we need to eradicate illiteracy, introduce paid educational leave as a statutory entitlement and make work-based learning and training available to all workers.
In yet another budget, the Government has failed to identify the potential for education development, and the return it will bring not just for the next generation, but for ourselves.
We knew that given the public finance shortfall, this Budget would be tough. I've talked about what got us into this mess and I've had a go at the Government for decisions they took and decisions they failed to take. But when all is said and done, the Sinn Féin deputies were prepared to come into this Chamber and support measures that we felt offered responsible solutions and a way out of the current mess. I appreciate the pressure the Finance Minister is under in delivering this Budget. But this Budget will not turn around the economy. It contains short-sighted, in many cases, irresponsible measures.
This Budget needed to look to the future. It had to deliver a new value for money ethos. It had to have a vision for the creation of jobs. It had to deliver funding to those departments that will help the economy in the long-run, such as education, and to those dealing with the fall-out from years of underfunding, such as health. Instead, it tinkered at the edges of the crisis, made cuts where they will hurt the most and displayed no real political leadership to get this state back on its feet again. We needed a brave Budget. Instead, we got a blinkered Budget.