Michael D Higgins (Galway West, Labour)

I wish to share time with Deputy Quinn.

Debate on the Finance Bill is one of those rare occasions when we have an opportunity of speaking about the state of the economy and the relationship of the economy to society. It is appropriate therefore, to seek to discern some of the values upon which Government policy is based and beyond that, how these values are influencing policy, in particular how that policy is implemented within the usual five years of Government. The first question must be to what extent has the behaviour of the budgets presided over by the Minister for Finance and the general finance policy been regressive or the degree to which they have distributed opportunities or distributed the fruits of economic growth.

Before we could begin to answer that question, we need to be realistic and honest about growth rates. The Tánaiste, Deputy McDowell, has issued a set of statements about the economy which rather sadly have no relationship to accuracy or to truth itself. I refer to the growth rates in the economy. The lowest growth rate in the last ten-year period was a figure of 2% when the Progressive Democrats had begun their contamination of the Fianna Fáil-led Government. The growth rate in 1989 was 4.7%; in 1990, 6.5%; in 1991, 2%; in 1992, 2.5%. I had the honour of being in the Cabinet with Deputy Quinn who was the Minister for Finance. I refer to the growth rates during his period of office. In 1993 when he took over the office, the growth rate was 3%; in 1994, 6.5%; in 1995, 8%; in 1996, 7.8%; in 1997, 10.3%. If the public were foolish enough to believe one word from the Tánaiste — this would be a great risk — they would realise that this is not the description of what he calls a "slump performance" in the economy. In 2002 the growth rate of GNP was 2.8%; in 2004, 3.9%; 2005,5.4%. Let there be an end to the myth-making about the economy and growth rates. I am far more interested in the fundamental question of whether the growth in the economy was used to lessen the gross inequalities in society or whether it exacerbated them. Differential access to income has an effect on inclusion and one's access to education, health, transport and so forth.

In the short time available to me I wish to deal with one other inaccuracy which is being floated around, namely the suggestion that low tax rates have been the major impetus towards economic growth. I have already factually corrected the statements about the growth rate made by the Tánaiste, Deputy McDowell. The increase in the growth rate, the increase in volume in the economy and in indirect taxes, has created a situation where there can be a higher tax take without expanding the net to capture taxes. I do not have time to develop this point. I recall the promise at the beginning of this Government that 20% of people would be paying the top rate of tax; as the departmental officials well know, the figure is 32%. We need not discuss these broken promises because I am far more interested in my fundamental question, namely, the degree to which the growth in the economy either did or did not assist the creation of a more decent society.

Figures about gross domestic product are a little suspect with regard to Ireland. They must be submitted to the criticism that the transfer pricing might artificially increase the gross figure so that when it is divided by the population this produces an inaccurate per capita figure. Using that caveat, it is interesting to note Ireland's GDP. The United Nations report on human development ranked Ireland 16th out of 18 OECD countries in terms of income and equality. That report shows that despite phenomenal economic growth, Ireland has the third highest level of poverty in the developed world.

We have been told that we have the second richest economy. Last year some of the economists who were telling us we never had it so good were somewhat taken aback when Mr. Ulrich Kohli, the chief economist of the Swiss National Bank, poured scorn on the notion that since Ireland had surpassed Switzerland in terms of gross domestic product per capita or that Irish people were somehow better off than Swiss people. Mr. Kohli pointed to the huge deficits in Ireland in what economists call public goods. These are schools, hospitals, public transport, roads, public recreational amenities. Switzerland's investment in these public goods is much greater than Ireland's and whatever the GDP figures show, anybody who has visited Geneva or Zurich will know why these two cities are in the top two positions for the best places to live for quality of life while Dublin is ranked 23rd.

What has been quite scandalous is the manner in which direct taxation has been substituted by indirect charges, accurately termed stealth charges. Those families who are the most vulnerable in terms of education, transport and access to health care, have faced a whole series of indirect charges so their net disposable income is very little.

There is a malign element in this budget as there was in many others. Once again the gap has been widened between dual income families and single income families through this Finance Bill. The real test of an economy is its impact on society and what it achieves. If one does not accept this, one is speaking about some version of the depeopled economy of which I have often spoken. If people exercise a choice that they are unwilling to pay gross charges for a crèche, that they should not be forever sitting in traffic jams with long commuting distances, worn out and unable to participate voluntarily in their community, and if they exercise a choice that one of the parents will be involved in the primary tasks of child care, they are penalised yet again in this budget. That is what the tax structure has delivered. We need to move away from a depeopled economy that has little but regressive effects on society and move to one that distributes chances equally.

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