Budget 2016 – Dáil address

14th October, 2015



As my colleague, the Minister for Finance said yesterday, the last few budgets have been hard, but they made it possible for Ireland to exit the bailout, reduce our debts, and move into a real recovery.


The top priority of this year’s budget – which is ambitious, but prudent- is to keep that recovery going, while providing relief and better services for the Irish people.


It includes steps like a cut in the USC, more nurses and doctors for the health service, more affordable and quality childcare, and ending the unfair treatment of the self-employed.


These are sensible, affordable steps that will keep the recovery going and bring its benefits to more households


Just as it was with the recent Capital Plan, Budget 2016 does not allow us to do all we would want and there will be many people today who feel we are not spending enough in many areas.


This is understandable.



What is clear, though, is that a responsible Government will only increase spending in line with its capacity to pay for that spending- we are still borrowing to pay for this spending, which is something we have been criticised for by some.


To do otherwise would be to return to the old ways of unsustainable Government expenditure that would endanger the fragile but strengthening recovery we are currently experiencing.




Budget 2016 allows for a total expenditure by the Department of Transport, Tourism and Sport of €1.74 billion in 2016, a total increase of 8 per cent, or €125 million on 2015.


This is the first year since 2011 that the Department’s baseline allocation for capital investment is more than €1 billion, which is important progress in ensuring that what we have remains in good working order, while also furthering new projects which will enhance our future prospects.


There will be an increase of €47 million in current funding to bring total current spend to just under €722 million. This increase in funding includes;


–          An additional €28 million or a 14% increase in Public Service Obligation (PSO) subvention is being provided to support increased public transport services, including those operated under the Rural Transport Programme. The priorities for the use of the this funding will be to reduce congestion by responding to passenger demand on key Dublin Bus and Bus Éireann services, the opening of the Phoenix Park Tunnel for commuter services and DART service improvements. As result of this extra funding the NTA will now finalise its plans for 2016.


–          An additional €2 million to support co-operative overseas marketing for the Wild Atlantic Way, Ireland’s Ancient East and the Rugby World Cup 2023 bid.


–          An additional €3 million to support a new National Physical Activity Action Plan and to help sporting organisations increase participation and continue their preparations for Rio.


On the capital side, there will be an increase of €78 million to provide funding for the maintenance of our existing road and rail infrastructure and to allow for an increase in capital funding for sports projects mainly to complete the National Indoor Arena by November 2016.




On taxation, there will be a €43 million reduction in commercial motor tax for Heavy Goods Vehicles. This will reduce the motor tax for 29,000 goods vehicles.


This is an interim measure pending the replacement of the current commercial motor tax regime with a fairer basis for calculating commercial motor tax, which will be based on the Gross Design Vehicle Weight of goods vehicles, and will promote more efficient and less polluting vehicles.

This tax reduction is in recognition of the importance of the haulage sector to the continued export led growth of the Irish economy. In addition to reforming the tax system for goods vehicles, investment in the Capital Plan will support the freight sector.


Secondly, today’s Budget also included a freeze in the special tourism-related VAT rate of 9 per cent. As with previous years, this will be subjected to a mid-year review of hotel, restaurant and other prices to ensure that visitors to our country continue to benefit in terms of value for money from this lower rate.


The 9% VAT rate is an important tool in our efforts to drive our tourism and hospitality industries which do so much for balanced regional development and the economy in general.






Turning to spending, I will concentrate on transport firstly. Budget 2016 provides over €28m more to support increased public transport services.


This increase, which represents the restoration of about 25 per cent of the total cuts since 2008, comes after several years of decline. When I took office over a year ago I said that one of my key goals was to stop the reduction in PSO funding to our public transport companies.


Having frozen the level of PSO subvention last year, I am extremely happy to now be in a position to increase that funding.


This new PSO money will have a real tangible impact and mean more bus and commuter rail services to get our country moving and our economy working.


Further, I am happy to say that the Regional Airports Programme budget will increase to €12.6m next year.


This will enable the provision of much needed financial support to the four regional airports at Donegal, Ireland West Airport Knock, Kerry and Waterford and will cover safety and security related projects, capital and current, necessary for the airports to comply with regulations.




With regard to sport, 2016 sees the overall sports programme allocation increase by 40% to €126m. This is strong recognition by Government of the value of sport in all aspects of Irish society.


The current expenditure allocation for the newly established Sport Ireland for 2016 is €47 million.  This is an increase of €3m and will allow Sport Ireland will help support the implementation of the National Physical Activity Plan which will be published shortly.


The increased funding will also enable Sport Ireland to augment its support for high performance athletes and for the programmes of the National Governing Bodies across the various sporting codes.


The achievement of our elite sportspeople is inspirational to all of us and has a very positive effect on the international perception of Ireland.  The Government is keen to enhance this particularly in 2016 when our athletes will compete at the Rio Olympic and Paralympic Games.


Further funding of €4.5 million will be available for sports measures next year through Dormant Accounts Funding.


Almost €25 million is being provided in 2016 for the development of the National Sports Campus, including completion of the National Indoor Arena. The Arena has long been considered to be the missing piece in our national sporting infrastructure. I am delighted to say that the Arena is on track for completion in November 2016.


When it is completed, it will provide a first-class environment in which athletes at all levels from over 20 sports will be able to train and compete.


Other major components of the Sports programme include the Sports Capital Programme and Local Authority Swimming Pools programme.




On tourism, today’s budget sees additional investment of €2m in key elements of Fáilte Ireland’s and Tourism Ireland’s  programmes along with continued capital investment next year and beyond to 2022.


This funding will enhance supports to the new experience brands of the Wild Atlantic Way, Ireland’s Ancient East and will provide funding needed for the Rugby World Cup 2023 bid and increase overseas marketing activities in key destination markets.


Within the overall additional investment of €2m, 2016 sees an increase of €1m in the allocation for overseas tourism marketing activity, the first increase in this funding since 2008. This will enable our strong overseas marketing campaigns to continue in our key target markets and help ensure that our ambitious targets for further growth are met.






To conclude, we are making good progress across all the programmes under my Department’s remit. 2016 will see continued momentum across all sectors with the support of additional funding year on year of around €125m.


We do not have all the funding we want to progress all the projects we would like but we are moving incrementally and steadfastly in the right direction. For my part, I will continue to ensure that what funding is available is targeted to maximise jobs and economic growth.