Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I wish to make a few points about section 2. We will come to the income tax side - the band and the rate reduction - in a moment, but section 2 relates to the USC. Given the way in which this budget was approached and the lack of information that we had as an Opposition party, no one could have foreseen that the Government would have had the resources to introduce a €642 million full-year cost income tax package. Right up to the eve of the budget, the narrative from the Government was that, instead of making an adjustment of €2 billion, we were looking at a broadly neutral budget to achieve a deficit of less than 3%. We prepared our proposals in that context. Instead of a broadly neutral budget, though, the Government spent an additional €1 billion. It was a negative adjustment of €1 billion. We need to address this point because countless parliamentary questions, correspondence with the Department and efforts to establish the State's true fiscal position ahead of budget 2015 were unsuccessful. We received answers that were essentially evasive and we were refused that information. This undermines efforts to achieve an objective to which I hope we all subscribe, that being, to hold a proper debate in advance of and not just after a budget.

That said, I stand by my position, which I advocated on behalf of the party, that 2015 was not the year to start a round of income tax cuts, as we will still borrow €5 billion next year to balance the books, adding to the general government deficit. As we all know, borrowed money must be repaid with interest. The attack on services in recent years due to budgetary cuts has been savage. The impact on access to critical services - the fair deal scheme among others, disability services and services for people across the country who are homeless tonight - could have been addressed to some extent.

When we reach section 3, I will discuss the overall shape of the package and the way in which it was calibrated. I acknowledge that the burden of income tax in Ireland is high. It increased dramatically in recent years and unquestionably needs to be reduced as resources allow, but I stand by my point that, at a time when we are borrowing €5 billion that must be repaid with interest, vital services have been cut to the bone and we are dealing with these issues in our constituency offices every day, this was not the right time to do so.

I make these points in the context of Members having to prepare their own approaches on the basis of a neutral budget achieving a deficit of less than 3%. Instead, the Government went €1 billion the other way, which no one saw coming because there was no evidence that the scope to do so existed. Regardless of who is sitting on the Minister's side or my side of this committee room, we will have to get this process right. If pre-budget submissions are to be meaningful and form the basis of a proper debate, we must at least be working off the same numbers.