Tuesday, 14 February 2012
Finance Bill 2012: Second Stage
Séamus Healy (Tipperary South, Independent)
The Bill is one of the main tools of Government policy to implement austerity, which is not working and has been a total failure. It is implementing a policy of job destruction which has been the policy of the Government since it came to power just 12 months ago. It is a completely missed opportunity and a litany of broken promises.
It is worthwhile reminding ourselves what those promises were. Some 12 months ago, Fine Gael and Labour Party canvassers knocked on doors and promised that not another red cent would be put into the banks, the bondholders would be burned, it would be Labour’s way not Frankfurt’s way and that the weak and vulnerable would be protected by the Government. As we all know, it came in and took on the clothes of Fianna Fáil and began to implement the same policies as the last Government.
That is what the Bill is about, namely implementing austerity and job destruction. It is about making low and middle-income families pay for a recession which they had no hand, act or part in creating. Families have been described as the coping classes and squeezed middle in recent days and months. Such people are being targeted while the very wealthy in this country do not pay their fair share of taxation and get off almost scot free.
The Bill implements a situation whereby we will extract a further €3.8 billion from the economy this year, on top of approximately €16 billion up to now and a further €8 billion or €9 billion over the next three years. This creates a downward cycle of recession, takes money out of the pockets of families and individuals, closes shops on main streets all over the country and throws workers on the dole queues.
What has happened to job creation and dole queues over the past 12 months since the Government came into power? CSO figures state that between the date the Government came to power and 30 September 2011, 24,600 jobs were lost. When the figures are released for 31 December unfortunately they will have increased. This is a job destruction rather than a job creation Government. There are 450,000 people on the live register and approximately 200 people emigrate each day.
This is a Government which is making ordinary low and middle-income families, the working poor, pay for a recession which they had no hand, act or part in creating. It could be so different. The Government had choices. The only way out of the current crisis is to generate real economic activity and create jobs. A policy of austerity has been a disaster for people and a total failure.
The Government could have targeted the very wealthy in the country. The Bill should have introduced an asset tax on the wealthy. It would be possible to raise €10 billion with very minor taxes on the very wealthy. There should be increases in the effective tax rate on those earning over €100,000 per annum. Some €5 billion could be collected under that heading. We should also have effective taxation of tax exiles.
Unless we go down this road, ordinary people in low and middle income families will continue to be targeted, squeezed and devastated by the policies of this Government. Figures from independent analysts, including Credit Suisse and the Central Statistics Office, tell us clearly that the wealthiest 5% of people in this country own 46.8% of the wealth and that the same 5% of people made an additional €45 billion in 2009 and 2010 in the teeth of the recession. When ordinary people were being devastated by cutbacks, pay reductions and job losses, the 5% super-wealthy made an additional €46 billion while not paying a cent in assets or wealth taxes. These people should be taxed and a target of €10 billion should be set for taxation under this heading. The net wealth of this group amounts to €219.3 billion. If taxes amounting to €10 billion were levied, it would still leave them hugely wealthy.
There is no doubt these people are not paying their fair share and they should be made to pay it. If anyone in this House is listening to the public, they know the vast majority of ordinary people are saying what I am saying now, that they are paying through the nose while the very wealthy are not paying their share and should be made to do so.
There is a great opportunity to tax high earners. Figures from the Revenue Commissioners show that the highest paid 10,677 individuals, 0.5% of earners, earned €6.01 billion, or 7.33% of all income, an average of €563,000 per year. They paid €1.738 billion in income tax, a rate of 29%, leaving them with after tax income of €4.27 billion, an average of €400,000 per head. The opportunity exists if the political will exists to increase the tax take from these extremely wealthy individuals who are not paying their fair share. These two proposals would make €15 billion potentially available through taxation. This Government and the last Government had that choice and neither of them was prepared to take it, being prepared to make ordinary people pay for a recession they had no hand, act or part in creating while the very wealthy get away scot free.
Many of the very people responsible for the recession, the bankers, bondholders, accountants, lawyers and solicitors who were part and parcel of its creation, are now being funded through NAMA, employed by the agency while being paid in excess of €200,000 to manage their portfolios. They are employed as solicitors, accountants and valuers through NAMA. These very people who were the main drivers of the recession are now being thanked by being funded through NAMA. It is time the Government targeted people with real wealth and ensured they are taxed fairly and properly while ordinary people get their fair share.