Pearse Doherty (Donegal, Sinn Fein)
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I will respond to that without looking to lengthen the debate, as I want to get into it. This is a very substantial issue and it is very clear from the Government's replies that it is coming under some pressure to justify why it is getting rid of €462 million of our tax base, given the crises we have in this area. I stand over the motion we put before the Dáil. To suggest the motion we put before the Dáil is in any way similar to what the Government plans to do with the USC stretches credulity to the limits. As the Minister rightly stated, we proposed to reinstate the income and health levies, bringing in €3.6 billion. The USC took in an additional €400 million because it was levied on individuals with incomes as low as €4,004. I acknowledged earlier, as we raised the issue and the Government decided it was unjust, that the threshold has been moved to €13,000. It was done at an expense to the Exchequer that ran into hundreds of millions of euro. That is why the Fianna Fáil proposal at that point was unjust. That is why we wanted to revert to the system that was there.

We have now seen progress in moving it to that level and that was Sinn Féin's intention in the first place. One of the next amendments I have is to move the threshold further so that everybody earning below the minimum wage would be taken out of the USC tax net. Crucially, over €5 billion of income from the USC would be retained by 2021. The Government's proposal is to get rid of the vast amount of that income and not replace it with anything else. That is the position and Sinn Féin has been consistent in that regard.

The Minister mentioned the "semantics" of it being emergency tax because it was introduced at a time of emergency. I will quote the Minister directly. He stated "I should point out that it was never intended that the USC would be a temporary measure". That is a reference to a "temporary" rather than "emergency" measure. The point I made earlier is that the narrative of the Government has changed to suggesting somehow that the USC was always supposed to be a temporary measure or it was introduced in an emergency; it was just to get us out of the difficulty we were in, it is suggested. The USC and its level of tax base was required to fix the problems arising from reducing taxation, which happened during the McCreevy era and left us with an unsustainable base.

We are discussing a large quantum of money at €462 million in a fell swoop and the Government plans to repeat this next year and for two subsequent years. This is all about options and I appreciate what Deputy D'Arcy has said in that it will put some money in people's pockets that could go into the cash registers of businesses in the community. I believe there are better and fairer ways to put money in people's pockets. The Minister mentioned the high marginal tax rates and the impact being felt most acutely by mothers of school-going age.

The point made by the ESRI was that we need to challenge the idea that marginal tax rates are a barrier to employment. The view is that proper substantial investment in child care would have a greater impact in terms of employment.

Now, the Government is moving in terms of child care and that is to be welcomed. However, the Government is not spending €462 million on child care. We need to ask ourselves certain questions as legislators. If our desire is to create more employment, then which would have a greater effect, a €462 million child care package to help people to get back to work and reduce the cost of living or €462 million as part of a process of eradicating tax breaks? I believe it is wrong.

I call on the Minister to directly answer the point I made earlier. The Minister said: "I should point out that it was never intended that the USC would be a temporary measure." Does the Minister stand over those comments made in the Houses?