Peadar Tóibín (Meath West, Sinn Fein) | Oireachtas source

In Sinn Féin's alternative budget we allowed for the differentiation between active and passive investment. That is important, because lumping both together does not make sense. Active investment, where investment is being made to improve the functionality and health of a business, will have outcomes for the State in that it will make the business more competitive and, hopefully, lead to more employment. There is no doubt that this type of investment needed to be differentiated from passive investment.

My concern here is that the Government took a huge jump in reducing rates here and that this is a significant cut. There has been significant analysis in regard to the Government having hollowed out the tax base, to a certain extent, in the budget. USC contributors to the tax base who are on salaries over €75,000 have shared in the €169,000 in cuts to the USC on income below €75,000. This cut, along with the collapse in CGT here, is a difficult blow for Revenue. Fine Gael has mentioned it expects to reduce USC further in the future and I understand there is an €8 billion fiscal space in the next five years to get rid of USC, which would amount to €4 billion. This makes for a further significant cut in the tax base. Given that we face so much pressure in regard to public service delivery, for example, the Minister for Health, Deputy Varadkar, stated yesterday that universal health insurance is too costly and ambitious, the reduced revenue from USC and CGT at the same time, is a concern for us.

We welcome the differentiation between active and passive investment. We wereen routeto a 33% rate for active investment and a 35% rate for passive investment but we were taken aback that the Government collapsed that to 20%.