Dáil Éireann - Volume 663 - 15 October, 2008

Leaders’ Questions.

  Deputy Enda Kenny: Yesterday, on behalf of the Government, the Minister for Finance introduced the most swingeing and savage budget in years against the background of the Government’s decision that every citizen must now pay for its mistakes. Yesterday, I said the country had a surplus of €6 billion two years ago but now is in deficit of almost €15 billion. There are no answers as to where all that money went or how the Government has led us to this point of recession.

In the course of the budget debate yesterday, we learned not only about the Government striking a blow against elderly people by taking away medical cards granted to those over 70 and how middle income families will now get screwed by taxation at every turn of the road, but also about a change in respect of the health expenses relief. The point raised by Deputy Michael Noonan on the health expenses relief requires clarification, as the Taoiseach is aware. Budget 2009 states in page B.6, “Health Expenses relief will be granted at the standard rate only from 1 January 2009, with the exception of nursing home expenses which will be standard rated from 1 January 2010.” There is great confusion over this. The Minister for Defence, Deputy O’Dea, said that the intention of Government was to have this rated at the higher rate of tax and not at the standard one. This seems to have been disputed by the Minister for Health and Children and I therefore want the Taoiseach to clarify it. What will the rate be? Will it remain at 41% or will it be reduced to 20%, which will have a devastating impact on families paying for patients in nursing homes, particularly in the Dublin area where charges can be higher than in the rest of the country? The measure is supposed to yield €150 million in a full year.

  The Taoiseach: The marginal rate is available for the course of 2009. The thinking behind what is to happen in 2010 and beyond relates to the review that will take place upon the fair deal scheme coming into play. As the Deputy knows, there are currently families who must pay considerable sums of money and consequently obtain the tax relief. The idea of the fair deal scheme is to treat everyone the same, be they in beds in private nursing homes or public nursing homes. No one in any circumstances under the new fair deal regime will pay more than 80% of his or her income as part of the funding mechanism. The provision should be reviewed in the context of the fact that the fair deal regime with ensure equality of treatment and that comprehensive, uniform criteria will apply to nursing home provision to deal with historic issues.

[726]   Deputy Enda Kenny: I asked the Taoiseach about page B.6 of Budget 2009, which states, “Health Expenses relief will be granted at the standard rate only from 1 January 2009, with the exception of nursing home expenses which will be standard rated from 1 January 2010”. The fair deal legislation will not take effect until some time next year. Is what I quoted a mistake? Alternatively, is the commitment made by the Minister for Defence, Deputy O’Dea, yesterday and repeated by the Minister for Finance incorrect? In other words, will the higher rate continue to apply and not be reduced to 20% from 1 January 2010?

We do not know when the fair deal legislation will take effect, how it will be amended or the circumstances that will arise between now and its passage. This measure has caused consternation for thousands whose elderly kith and kin are either in or are likely to be in nursing homes. If the measure is to apply at a reduced standard rate, it will cause mayhem among families that will not be able to pay. As Deputy Noonan pointed out yesterday, charges in Dublin can amount to €60,000 per year. They may be somewhat lower in other places around the country.

Is what I quoted from page B.6 a mistake? It should be very clear to everybody that it is a mistake and that the intention of the Government, as outlined by the Minister for Defence yesterday, is that the higher rate of tax in respect of medical expenses relief will continue to apply. The measure in page B.6, if introduced, will affect many thousands of elderly folk and, as a consequence, their families. Will the Taoiseach clarify whether it is a mistake and whether the rate of 41% will continue to apply in respect of medical expenses relief for patients in nursing homes?

  The Taoiseach: As I explained to the Deputy, the measure in page B.6 assumes the full operation of the fair deal legislation by 1 January 2010. The point I am making is that, if the fundamental reform is to take place whereby all in receipt of nursing home care will pay no more than 80% of their income, regardless of whether they are in private or public nursing homes, one will not be able to argue so rigorously that the tax incentive introduced in the first place is required. If the new system were not to be in place, the present marginal rate would remain until the fair deal system became fully operational, at which stage we would review circumstances fully.

  Deputy Richard Bruton: There is a decision here. Is it now a review?

  An Ceann Comhairle: This is Leaders’ Questions.

  The Taoiseach: I have just explained that this depends on full operation of the fair deal legislation by 1 January 2010.

  Deputy John Deasy: Explain it to Willie.

  The Taoiseach: That is the situation. In the meantime, as our true intention here is not to cause problems or concerns for people, I am making it very clear that until such time as it is fully operational, there will be no change to the marginal tax relief that is available for nursing home care because there are——

  Deputy Bernard Allen: Therefore, yesterday’s statement is wrong. We want a straight answer.

  The Taoiseach: No, it is not wrong.

  An Ceann Comhairle: This is Leaders’ Questions.

[727]   The Taoiseach: The Deputies are not prepared to allow the clarification to be made because they want to continue with some confusion. There is no confusion.

  Deputy Bernard J. Durkan: There is confusion.

  The Taoiseach: The present marginal rate remains in place in respect of nursing home care for those who require it and are eligible for it until such time as the fair deal scheme is fully operational, which is a fundamental reform, as Deputies will know. It is presumed the fair deal scheme will be fully operational by 1 January 2010. We will review the situation and ensure that if it is fully operational, we will consider the changes that can take place, because this will not affect people. They will not be seeking the 41% marginal tax relief at that time because the whole basis upon which their payment is made will change and that will be the same for everyone regardless of whether they are in a private or a public nursing home.

  Deputy Olivia Mitchell: Is it not an optional scheme?

  Deputy Eamon Gilmore: Which of the treacherous 30 cuts and charges that were introduced in yesterday’s budget is the Taoiseach most embarrassed by? Is it the 1% tax on the widow who takes a part-time cleaning job to supplement her pension? Is it the taking away of the medical card from old age pensioners? Is it the €100 charge that the parent of a sick child will now have to pay to attend accident and emergency or a hospital? Is it the €2,000 that the average middle income family will have to pay back to the Government in after-tax income as a result of yesterday’s changes? Is it the €1,500 that the same hard-working family will have to pay in a registration fee when one of their children goes to college? Is it the cut in child benefit or the early childhood payment? Is it the increase in class sizes? Is it the fact that to date the only organisation to welcome the budget is the Construction Industry Federation?

  Deputies: Hear, hear.

  Deputy Mary Hanafin: That is not true.

  Deputy Eamon Gilmore: Specifically, in respect of the withdrawal of the medical card from pensioners, I received a call this morning from a pensioner who was on VHI but qualified for the medical card when he turned 70 and stopped paying VHI. Can that pensioner get back into VHI now and, if so, what will it cost? What type of cover will the VHI provide to such a pensioner if he does manage to get back into it?

  The Taoiseach: It is not a question of my being embarrassed by any of these measures, which are necessary in the interests——

  Deputy Róisín Shortall: The Taoiseach should be embarrassed.

  The Taoiseach: These measures are necessary in the interests of trying to provide a sustainable public finance position for the country.

  Deputy Bernard Allen: It is a nice mess the Taoiseach has got us into.

  Deputy Olivia Mitchell: The Government made a bad deal with the doctors and it is making the public pay.

  Deputy Dermot Ahern: The Deputies speak out of both sides of their mouths.

  The Taoiseach: If it is Deputy Gilmore’s contention — it was certainly Deputy Bruton’s contention last night — that there should not have been any tax-raising revenue provisions in [728] the budget, what part of the expenditure programme would he cut by another €2 billion? That is what is required.

  Deputies: Hear, hear.

  The Taoiseach: If it was also the case that he did not believe there were discretionary spends in the capital programme that should not have been deferred, what further €1 billion in cuts — making a total of €3 billion — would he estimate we could find in the public expenditure programme? If we were to move, as Deputy Bruton said, to a 5.5% deficit instead of the 6.5% deficit and if we were not to raise taxes, this would require another €2 billion of expenditure cuts.

  Deputy Enda Kenny: There is no plan, none.

  The Taoiseach: If the Fine Gael budget which has been outlined by its finance spokesperson is that we would have a 5.5% deficit and not raise any taxes——

(Interruptions).

  Deputy Dermot Ahern: The Deputies are speaking out of both sides of their mouths.

  The Taoiseach: I want to make it clear——

  Deputy Emmet Stagg: The Government should tax the fat cats who caused this.

  An Ceann Comhairle: Let the Taoiseach finish.

  The Taoiseach: I want to make it clear that if this is the Fine Gael position — it was their stated public position on the “Prime Time” programme last night — they are required to find another €5 billion in expenditure cuts to make that budget stick. That is the reality.

  Deputy Richard Bruton: The Taoiseach can read out policy statements, but why does he not look for something from the banks?

  An Ceann Comhairle: Let the Taoiseach finish.

  The Taoiseach: Those are the facts. Whether one is on the Opposition benches or the Government benches, two plus two is four, and you add the zeros later.

(Interruptions).

  Deputy Enda Kenny: A Cheann Comhairle, the Taoiseach is——

  A Deputy: He is on his own.

  Deputy Conor Lenihan: Enda cannot even get the people behind him to calm down. He has no leadership skills whatsoever.

  An Ceann Comhairle: The Taoiseach should be allowed to finish.

  Deputy Richard Bruton: The Minister of State, Deputy Conor Lenihan, should not shout down his Taoiseach.

  The Taoiseach: Deputy Gilmore decries all the methods of raising tax revenue. I do not believe it is the view of the Labour Party that we should cut expenditure further — I do not [729] think that is its position. I have heard what Deputy Gilmore had to say in regard to some tax expenditures. We will debate those in the House and assess their impact, and at least we can have a debate that might make sense. However, the debate I am trying to have with the Opposition here does not make any sense because it is €5 billion out before it starts.

  Deputy James Reilly: It will make a lot of sense to those whose medical cards will be cut. Health cuts hurt the old, the sick and the disabled. Is that right? Where did we hear it before?

  The Taoiseach: With regard to the specific point raised by Deputy Gilmore, the medical card is available for GP services.

  Deputy Bernard Allen: Willie will have an army with no barracks.

  The Taoiseach: The VHI does not provide cover for GP services.

  Deputy Joan Burton: Some plans do.

  Deputy Emmet Stagg: It covers far more than GP services.

  The Taoiseach: Let us be clear. That is not the situation.

  Deputy Emmet Stagg: It also covers accident and emergency and hospital charges.

  Deputy Olivia Mitchell: It covers a lot more.

  The Taoiseach: Excuse me——

  An Ceann Comhairle: Let the Taoiseach finish, please.

  Deputy Emmet Stagg: That is wrong.

  The Taoiseach: The position is——

(Interruptions).

  The Taoiseach: I am making the point and shouting me down will not change it.

  An Ceann Comhairle: This is Leaders’ Questions.

  Deputy Emmet Stagg: He is wrong.

  The Taoiseach: Shouting me down will not change it.

  Deputy Emmet Stagg: He is wrong.

  An Ceann Comhairle: It does not matter. The Deputy has no input to make on this.

  The Taoiseach: With respect, I am not wrong. VHI does not cover GP services and the medical card does cover those services. Let me make it very clear, I very much regret the fact——

  Deputy James Reilly: VHI covers €25——

  Deputy Dermot Ahern: Deputy Reilly should keep quiet. I will show him what he said in 2001.

  Deputy James Reilly: Do that, by all means.

[730] (Interruptions).

  Deputy Dermot Ahern: Deputy Reilly fought this. He is a hypocrite. He threatened to strike.

  An Ceann Comhairle: Order, please. Let the Taoiseach finish.

  The Taoiseach: Just so we get the full flavour of consistency, as I wish to deal with Deputy Gilmore’s substantive point——

(Interruptions).

  An Ceann Comhairle: Excuse me, I wish to make one thing clear. This is Leaders’ Questions and the Taoiseach must be allowed to finish.

  The Taoiseach: Deputy James Reilly, when he was chairman of the IMO’s GP committee, condemned the Government’s decision to offer medical cards to all pensioners over 70. His position was that it was not acceptable. Now, of course, he decries the fact that we have changed that arrangement.

  Deputy James Reilly: That was without means testing. Since that time, for seven years——

  The Taoiseach: I presume the Deputy is proud of the fact that, when he was chairman of that GP committee, he negotiated four times the charge for people in less disadvantaged areas than in disadvantaged areas. He effectively got a payment——

  Deputy James Reilly: For seven years people have had these cards. Now, the Government takes them away from pensioners and wants to tax them.

  The Taoiseach: He effectively achieved a payment of €641 for every such person who was on the GP list.

  Deputy Olivia Mitchell: The Government made a bad deal with the doctors and is expecting people to pay.

  The Taoiseach: That was what was negotiated——

  Deputy James Reilly: By the Government.

  The Taoiseach: ——and €85 million of the cost in that regard goes directly to GPs.

(Interruptions).

  An Ceann Comhairle: Allow the Taoiseach to finish.

  The Taoiseach: On Deputy Gilmore’s point, I very much regret that this was a necessary decision. I would like to have been in a position to say the present situation could have continued, but it was not possible in the context of all the decisions that had to be taken——

  Deputy James Bannon: Why?

  The Taoiseach: ——because we have €6.5 billion less in revenue than was anticipated.

  Deputy Bernard J. Durkan: Why is that?

  The Taoiseach: In that regard, a very balanced approach was taken which sees expenditure cuts of over €2 billion——

[731]   Deputy Bernard Allen: It is a nice mess the Taoiseach got us into.

  The Taoiseach: ——tax revenue raising of €2 billion and——

  Deputy Ruairí Quinn: The Taoiseach should at least apologise for his mismanagement.

  The Taoiseach: One moment, please. In addition, there is €1 billion in regard to the capital programme.

I regret that is the situation, but we have sought to achieve that seven of every ten people over 70 will be eligible for that medical card on the means test grounds, based on the data that are available for those who were in receipt of medical card between the age of 66 and 70 and who got the card when they came to the age of 70.

  Deputy Emmet Stagg: Those over the limit will be cut off.

  The Taoiseach: There will also be people who will be entitled to the GP-only card and those who will be entitled, up to a dual income limit of €1,300 per week, for the €800 payment towards medical expenses.

  Deputy Enda Kenny: They will not spend that because they will be afraid to go to the doctor.

  The Taoiseach: I am sure it would be better for everyone if we were in a position where it could continue to be universally applied but that is not possible in the financial circumstances in which we find ourselves. We had to make an adaptation, a change, a modification which still provides more cover.

  Deputy Bernard Allen: The Taoiseach is a failure. He got us into this mess.

  The Taoiseach: I say to Deputy Quinn that I am more proud of the achievement of the Government towards the elderly throughout our time in office than anything he was able to achieve in his three budgets.

  Deputy Bernard J. Durkan: Brave talk.

  Deputies: Hear, hear.

  Deputy Eamon Gilmore: I asked the Taoiseach two questions, neither of which he has answered. The first was whether there was anything at all in the budget yesterday that caused him any embarrassment.

  Deputy John Cregan: He answered the question. He said he was not embarrassed.

  Deputy Eamon Gilmore: He clearly is not, which means we have a hard-necked Taoiseach leading a shameless Government.

  Deputies: Hear, hear.

  Deputy Eamon Gilmore: The very least he could do this morning for people who are suffering pain as a result of the budget is to express some degree of remorse, regret and apology to them.

Second, I asked a specific question about elderly people who had health insurance, but who understandably gave it up when they got medical cards in the expectation that they would continue to have them. The Government is now taking the medical card off them and leaving [732] them marooned in a situation where they will now have no medical card and no health insurance.

I checked this morning with the VHI and I am told that a pensioner in those circumstances will have to wait ten years for cover for a pre-existing condition and two years for cover for a new condition. What answer can the Taoiseach give to a person aged 75 or 76 from whom he is taking the medical card, who has stopped paying health insurance? What comfort can he offer to them this morning about their health cover because people are worried and are ringing my office and I am sure other offices also?

Third, if the Taoiseach is so convinced the people of this country accept his budget, will he put it to the test? Will the Taoiseach move the writ for the by-election that is due in Dublin South and put his budget to the test of the people of that constituency at least?

  Deputy Billy Kelleher: What has Deputy Gilmore done about it?

  An Ceann Comhairle: The Taoiseach should be allowed to speak without interruption.

  Deputy James Bannon: Put it to the country.

  Deputy Finian McGrath: Deputy Bannon wants an election.

  An Ceann Comhairle: The Taoiseach should be allowed to speak without interruption.

  The Taoiseach: I will provide my speech on the budget debate this morning and I outline in it that I acknowledge that sacrifices are being asked of people. I acknowledge that people will be in a worse position next year than they are in this year. That is true. I state that openly and clearly. The reason is that we have to make adaptions to address the situation.

  Deputy James Bannon: The Government took a service out of my town that was the equivalent to two major industries. The people of Longford and Westmeath are very angry.

  An Ceann Comhairle: Deputy Bannon is not the leader of his party.

  A Deputy: Ballymagash.

  An Ceann Comhairle: He has no input to make to the debate.

  Deputy Dermot Ahern: Thank God he has to run for that side of the House.

  The Taoiseach: We have to make those decisions because if we do not make them — as difficult and unpalatable as they are——

  Deputy Bernard Allen: The Minister, Deputy Dermot Ahern, could not find out about Ray Burke.

  An Ceann Comhairle: Please.

  The Taoiseach: ——for some. I accept that. Of course I understand that. I am a politician who represents constituents as much as Deputy Gilmore. I get as many telephone calls from constituents as he does.

  Deputy James Bannon: The Taoiseach let down the midlands.

[733]   The Taoiseach: I know those things, but I have to say to people that if we do not make decisions in the context of the deteriorating situation, then we put at risk not only the provision of those services, but other services. That is the hard lesson we learned in the past, that by deferring those decisions we hike it over.

  Deputy Ruairí Quinn: The Taoiseach forgot that.

  The Taoiseach: I did not forget it.

  Deputy Dermot Ahern: Deputy Quinn was part of it too.

  The Taoiseach: I do not accept for a moment that I forgot it because the complaint from the Labour Party benches in each of the past three budgets was that I was not spending enough. I recall in regard to the Labour Party’s manifesto that Deputy Quinn was calling for a hugely increased capital investment programme way beyond what we are providing, which will still be between 5% and 6% of GNP next year, in line with the NDP commitment. That was Deputy Quinn’s position. That would have meant higher taxes. Deputy Quinn is entitled to put that view. He put it to the test and it did not work.

Deputy Gilmore made a point about elderly people losing health cover. People are entitled to hospital services. The vast majority of VHI services — up to 95% — relate to hospital services. Deputy Gilmore may be able to show me some aspect of a plan relating to GP services. Those people are still entitled to be looked after in hospitals and acute services should they require them.

  Deputy Emmet Stagg: They will have to pay for it.

  The Taoiseach: The position in regard to those who do not have a medical card, those with a GP only card, is that their expenditure will not exceed €100 on medical expenses per month.

  Deputy Emmet Stagg: Time.

  The Taoiseach: No, per month. Anything over that will be paid for by the State.

  Deputy Emmet Stagg: There are 12 months in a year.

  The Taoiseach: In the past I recall that people had to pay for their medical expenses for three months regardless of the cost before they could seek a refund.

  Deputy Joan Burton: That is just for drugs.

  The Taoiseach: That was the old situation. We changed that through the drug payment scheme when I was Minister for Health and Children. As a result, that brought a huge reduction in the concern people had about the cost of drugs.

  Deputy James Bannon: We are back in Angola.

  The Taoiseach: We are continuing with that scheme. It is only fair to say that because of the difficulties we face, unfortunately, it is not possible in the present situation to provide universal entitlement in respect of all of these matters, as was the case in the past. The great majority of the advances we have made for the elderly have been protected in the budget and can be protected for the future. We can say that, and we can point to real improvements both in terms of the extension of age exemption limits in regard to increasing the pension and the supplementary entitlements. All of those benefits have been quite rightly provided to the elderly.

[734]   Deputy Jack Wall: What about the rent subsidy? It is an absolute disgrace.

  The Taoiseach: I am proud of that record because it far exceeds the record of any other Administration, despite the claim of the Labour Party that it was always in favour of and better able to look after people than we were.

  Deputy James Bannon: What about the farmers?

  The Taoiseach: The record points to the contrary. The same is true of child benefit. Despite that fact, the point is that people in this situation——

  Deputy Bernard Allen: The point is the Taoiseach made a mess of it.

  The Taoiseach: ——are still entitled to acute hospital services. The vast majority of people will receive a medical card or a GP only card.

  Deputy Róisín Shortall: What about the ones who do not?

  The Taoiseach: Only 6% of those who currently have a card will not be entitled to either a GP card, a medical card or the grant payment to look after their medical expenses.

  Deputy Bernard J. Durkan: What have they done wrong?