Joan Burton (Dublin West, Labour)

Many of the 52% of taxpayers who pay for private health insurance are on modest incomes. For these ordinary, hard-working and hard-pressed families, the increase in the cost of private beds in public hospitals will mean another round of insurance increases.

It says much about this Government that it cuts the top rate of income tax but not the lower one, and that it pays for this reduction by reducing the scope of other tax reductions. We have always argued that a wider standard rate band and additional tax credits are the best way to achieve tax justice. I am aware the Minister shares this view because he has said so on several occasions, as has the Taoiseach. I am sure Mr. Seamus Mallon will forgive me for using his famous phrase in a different context. What we have today is tax reform for slow learners. On the way, serious injustice was done to people who were forced to pay tax at 42%, as well as PRSI, on modest overtime payments, bonuses or wage increases.

This is a typical Fianna Fáil-Progressive Democrats budget, one that benefits the wealthy few rather than the hard-working many. The headline reductions in taxation will be welcomed by hard-pressed families. It remains the secret of our tax code, however, that tax is often only for the little people and is generally most onerous for them. In 2006, a single worker who earns €32,000 per year and €1,000 in overtime pays tax at 42%, plus up to a further 4% in PRSI. After today's budget, a single worker earning €34,000 will pay tax at 41% and PRSI on any overtime earnings or bonuses he or she receives.

It is not surprising that people in such circumstances wonder at a Minister who facilitates a situation where more than 1,000 of the most wealthy citizens, including 32 millionaire earners, pay an effective tax rate of between 0% and 5%. The Minister supplied these figures for 2003 in a reply less than ten days ago. No amount of massaging the figures, Enron style, can deny that dysfunction in our tax system. The point about lower taxes is that for tax justice to work, and to allow us to fund schools, hospitals and other public services, everyone must pay their fair share.

A reduction of 1% in the top rate of tax is worth zilch to a person earning less than €34,000 per annum. The Minister's tables indicate there are 1.7 million workers who pay tax at 20% or less. The reduction in the higher rate of tax is worth nothing to them. By his own account, only some 400,000 people will benefit from it. For a worker earning €84,000, the value of the cut is some €520; for those on €168,000, it is worth approximately €1,360; and it is worth €1,903 to those earning €250,000.

This budget is an example of Enron economics and Humpty Dumpty accounting. I am particularly interested in the tables set out in the Budget Statement. The table on page C22, for example, shows the numbers paying tax at the various rates. I asked my colleague and party leader, Deputy Rabbitte, to bring a copy of last year's Budget Statement for comparison purposes. Last year, we were told that 658,000, or 31.9%, of taxpayers paid tax at the higher rate. In another example of Enron accounting, the Minister has performed magic by suggest that only 19%, or 438,000, will pay at the higher rate following the changes in the budget. The smile on the Minister's face indicates he knows this is a good stroke. Some 250,000 workers have disappeared from the cohort of those paying the higher tax rate. I believe it was Tommy Cooper who used to say "Just like that". Just like that, 250,000 workers have disappeared. It is a good trick and the Minister has done well.

According to the Minister, 1.75 million workers will now pay tax at 20% or less. In other words, they will pay a higher rate of VAT than income tax. That is some achievement in terms of tax justice. The reality, however, is different. At the recent Fianna Fáil Ard-Fheis, I heard both the Minister for Finance and the Taoiseach proclaim that this reclassification would allow the Government to claim it had met its promise that only 20% of workers would pay tax at the top rate. All this happened in the blink of an eye. In late September, on the first day following the summer recess, I received a table that was calculated in the original format. Some of the Minister's handlers have since been to work to recast the table.

In Alice's Adventures in Wonderland, Humpty Dumpty said in a scornful voice that when he used any particular word, "it means just what I choose it to mean, neither more nor less". Likewise, when the Minister for Finance produces a table showing table rates, it means whatever he chooses it to mean, no more nor less. If he is to acknowledge the rules to the slightest degree, he must explain why he has undertaken this fix. It is an Enron-style massaging of the figures. If the Government wishes to restate the figures, it should follow the rules and explain exactly what it is doing, instead of trying to pull a fast one.

I will put forward a simple test for the Minister's consideration and I ask him to tell me whether I am right in my conclusion. Should a person earning more than €34,000 be offered an overtime or bonus package of €1,000 in the weeks before Christmas, what will be the effect on his or her pay packet? Will the tax be deducted at 20%? Absolutely not. It will be deducted at41%, in addition to some 4% in PRSI. If a nurse, married to a garda, earns €1,000 for an extra long weekend's work, when she examines her payslip, she will not see a 20% tax deduction but a 41% one plus PRSI. People will know the answer when they check their wage packets.

For some time I requested that budgetary tables be included in the statement and today they have been restated without so much as a blush. I suppose it is about the election.

After five years of this Government, it is time to take stock of what has been achieved. In the five years, the Government's spending programme has been awesome. The shortcomings on the delivery side have been no less striking. If the Tánaiste were in the Chamber, he would be asking the Minister for Finance if he got away with it. Despite the glowing promises made before the last election and the unprecedented tax revenues the Government has enjoyed, improvements in public services have not been delivered. We are still waiting for the promised increases in hospital beds, the promised reduction in class sizes to 20 for children of nine years and under and the promised levels of social and affordable housing for young people to start out on the property ladder.

While the package for care in the community is welcome, it is but a sticking plaster measure that will go nowhere near the core of the problems in our health care system. The headline figure for health spending is a large increase but it is still a lower percentage of national wealth when compared to other European countries. Sweden, for example, spends 60 cent on long-term care for every euro spent on health care while Ireland continues to spend only 12 cent. The effect of this massive underspend is seen in the trauma of overcrowded accident and emergency departments.

An extra €100 million package has been announced for health-related disability and mental health services. All Members were touched by Monday's "Prime Time" programme on mental health services for children and the desperation experienced by parents. Of this extra package, €75 million is for disability while €25 million is for the programme on mental health, A Vision for Change. The waiting list in Deputy Moynihan-Cronin's constituency for mental health services for children is four years. The €25 million will only see to the needs of counties Kerry, Kilkenny and Carlow, such is the level of need. Again, we say "thanks" but it is a very limited increase for a particularly needy area.

The health services employ more than 100,000 people, but the majority of employees feel they work hard and do not get due recognition. This is because of the bungling by the Minister for Health and Children and top management and poor organisation.

The biggest health policy change in the Government's lifetime is the loss of direct accountability. Professor Brendan Drumm has become the Minister for Health and Children while Deputy Harney is just for decoration. A sceptical nation was told that the abolition of the health boards and the formation of the HSE was designed to give us a more efficient health service. It is now obvious that the objective of the Minister's expensive reorganisation of the health services was not to improve service to the public, but to establish structures and processes to enable her to avoid having to answer for her actions and responsibilities either to the Dáil or the media.

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