Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I will press on again. The Deputy has described people who are suffering from the economic collapse in the country for a number of years and still are suffering. He described that in very cogent terms and I do not think he will get much disagreement on it either from Labour Party Deputies or Fine Gael Deputies.

The Deputy was incorrect to say that Fine Gael is a high tax party. We happen to live in a high tax country for reasons which we all know about, principally because of the policy mistakes made by the previous Fianna Fáil-Green Administration. I do not want to recite the mistakes again but that is part of the base from which we are working.

Fine Gael is not a high tax party. We will reduce taxes as soon as we have the wherewithal to do so and we have started this year. I suggest the Deputy looks at what we have done since we went into Government. We were not a high tax party when we rescued the tourism industry by reducing VAT from 13.5% to 9%. We did that when we had very little money. We had to raise it elsewhere, principally by a pension levy that many people objected to. We did so because we thought it was a successful policy instrument and it was the first step to rebuild the tourism industry. We continued rebuilding it by abolishing another tax - the travel tax. Those initiatives are not the mark of a high tax party. The travel tax allowed all the airlines, but led by Ryanair, to bring an extra 1.5 million people in and out of the country in the past 12 months. Other developments which were novel but not tax-related, like The Gathering and the Wild Atlantic Way, have added to improving the sector, and now we have a re-investment in hotels. I have outlined a model of a particular sector but the first driver was a low tax position.

We are committed as well to a 12.5% corporation tax. On budget day I said that the rate was a red line, non-negotiable and not to even talk about it to us if one is from another jurisdiction trying to put pressure on us. That is a low tax position. We will also try to reduce personal taxes and we have started this year. I admit to the Deputy that the starting position is a high tax one. I reassert that our policy is to reduce taxes, particularly personal taxes.

The OECD has a hierarchy of taxes. It says that income tax increases are the second most damaging tax to the provision of jobs and that consumption taxes are the least damaging. It is worth considering that in detail. I do not pluck out taxes arbitrarily and nor do I pick my priorities arbitrarily. I try to deal with those measures that have the most economic effect and personal taxation has a big economic effect. By any standards, personal taxation in Ireland is too high. We have the most progressive tax system in the OECD but personal taxation is too high and people get to the higher rates too fast.

People have said we should do more for the low paid. If one does not pay tax one cannot do much for people through the tax system but help can be provided in other ways. The Government was very conscious of the difficulties being experienced by families on low income and significant changes were made in child benefit by the Minister for Social Protection. She is restoring a quarter of the Christmas bonus, again a feature of this budget. That shows there are other ways of directing money to people.

I will defend emphasising those that hit the higher income of €32,800 and that cohort of people up to €70,000. One can make it impersonal and turn it into a statistic.

Who are they? What couple is on €70,000? One gets a young fellow who is just back on a building site, a young fellow working in a factory, or a young schoolteacher or garda who is married to a young nurse or a girl who might work in the local shopping centre who might have €70,000 between them. The Deputy is saying they should not get tax breaks proportionate to their income and that they should contribute to Deputy Boyd Barrett's model where one takes more off them to redistribute it to people who are worse off. That makes no sense. If one looks at the people we are talking about, they are among the 1.9 million people at work who vote for Deputy Doherty as well as for me and he meets them every day of the week. The Deputy should not turn them into a wealthy statistic, because they are not. They are real people who find it hard enough to live.

It is easy to make a case for someone who seeks help from the Society of St. Vincent de Paul. I do not criticise anyone who makes such a case, but it comes back to my fundamental point that this country has come through the worst crisis since the Second World War, and probably since the Famine. It has been an absolute disaster. We are building the economy up slowly. There has to be a set of consistent policies to do that. In my view, the only cure for the ills of society, as described by Deputy Boyd Barrett, which come from low income levels, is to grow the economy and make sure that people on low and middle incomes get a proportionate share of the gains and that the gains are not hived off by a group at the top. That is what we are about. That is why we want to get more people back to work. That is why we want to bring young emigrants home. That is why the budget has been designed in the way set out.

I do not say the Deputies are not entitled to advance their policies, that they are not socially concerned or that they do not believe what they say. Neither do I say the Deputies are not men of goodwill and that their parties are not people of goodwill, but what I say is that their economic model is wrong and it will do harm rather than good. That is the difference between us.