John Lahart (Dublin South West, Fianna Fail) | Oireachtas source

I will respond to the second speaker first. I thank Mr. Berney for his comments and I thank Deputy Boyd Barrett for his resistance.

I shall make a couple of responses. Budgetary oversight is interesting; we met representatives of IBEC yesterday and have listened to different participants. The meetings have left me with a strong sense of the challenges that politicians face in terms of making decisions because everyone has made valid arguments with some interesting contrasts. First, ICTU made a presentation and mentioned the abolition of the VAT rate. Last Monday, Fianna Fáil held a party think-in at which Professor Alan Ahearne made a presentation. He made the point that the abolition of the VAT rate would double or increase it by 50%. The difficulty with removing a tax is one might have to re-impose it.

I agree with Mr. Berney about the questionable treatment of workers. However, I disagree with his belief that increasing the VAT rate and returning it to its original rate would more than likely be passed on to consumers when they go out for a bite to eat or stay in hotels. I would like to hear his response to that.

I agree with Mr. Berney when he said: "Local authorities should take the lead in a major housebuilding programme with funding of at least €1 billion from government, providing at least 10,000 social housing units a year by late 2018." Does he live in the real world? I would love to see such a development. My own local authority of South Dublin County Council will complete ten social houses this year. Therefore, ICTU's request is unrealistic. I wish it were realistic. I am disappointed with ICTU making such a generalisation. I would like to have seen something more concrete, please pardon the pun, in terms of ways to deal effectively with the housing crisis. The figure is totally impractical. I wish I could wave a magic wand and provide 10,000 social housing units by the end of next year. The figure produced by ICTU is unrealistic and I am disappointed with the organisation.

One of my colleagues has suggested that close to €1 billion for the housing assistance payment, HAP, has been provided in the budget. That is a huge payment but it is one of the prices that we must pay.

Neither of the witnesses has said anything about the vulnerable middle classes. Dr. McDonnell mentioned USC cuts. I represent the constituency of Dublin South-West. It represents a good microcosm of the country because it has middle class, working class, working-middle class people and people who are seriously disadvantaged. The constituency also has a really struggling middle class for whom September is the new Christmas in terms of child care costs and back to school allowances. They are the people who budget from month to month. If there is an unexpected cost in a month, let us say the car, fridge or washing machine breaks down and needs a part that has not been budgeted for, these people are thrown into a financial crisis. Therefore, a targeted tax reduction such as the USC would be welcome.

There is a lack of appreciation for people who must budget on a monthly basis. Recently I tabled parliamentary questions on motor taxation. If one pays one's motor tax monthly one is penalised. That situation may not seem much to people who can afford to pay their motor tax for a year. If one budgets from month to month one can pay up to an extra €100 or €150 per year, which means at least €10 a month. I agree with NERI that the property tax, and Fianna Fáil has said it for years, should reflect a person's ability to pay. I like the idea of the offsetting effect. In other words, the State ends up accruing the same amount of income from the tax.

I reiterate that the struggling middle class must budget from month to month and exist on a financial knife edge. Any little break we can give them would be greatly appreciated. I ask the organisations to factor that into their calculations.

Consumption taxes were mentioned such as excise tax. How can one reduce the excise tax on alcohol? There is a political debate on alcohol at present so a call to reduce the excise tax is completely unrealistic.

I shall conclude by discussing child care. I agree that the State has kept child care at arm's length from preschool for some unknown reason. I would co-locate preschool facilities. In the past few years we have embarked on a massive school building programme. Not including preschool facilities is a missed opportunity. School facilities could have been a one-stop shop for parents. Of course, primary school teachers are qualified to teach preschool children. I suggest that we increase the skills level in the sector. Unfortunately, as preschool education operates in the private sector, it means the cost of preschool will increase. I would appreciate any comments that the witnesses can make on these issues. The increased grant has, anecdotally, led to increased charges being imposed by some child care providers.