Ruairi Quinn (Dublin South East, Labour)

I am surprised that despite all the leaked briefings to the newspapers we have this regressive measure of taxation. I am particularly surprised it comes from the Taoiseach who has had three years' experience in Merrion Street and has lost no opportunity since he took office to announce his republican values and ideals and his commitment to equality of treatment. This levy is the most unequal treatment of income earners we have seen in recent decades. It smacks of the most extraordinary residue of the dying corpse of the Progressive Democrats, of which I thought we had seen the end.

Illustrative cases on how the income tax changes will affect taxpayers are listed in the Budget Statement. The first case is that of Gary, a single factory worker, and his daughter Gabby. One feels that they should be jumping for joy because, while money is taken from them by the levy, they are shown to be still better off. That undermines the donation that was given to them in the first place.

We know the spin doctors suggested not to touch tax rates but introduce a levy on income. They suggested not to create spin around perceptions of taxation rates but introduce a measure which was introduced before. We did it together in government in 1993 when Deputy Bertie Ahern was Minister for Finance. While that levy, to bridge a gap, was 1%, it was only for one year. Those were different times with different circumstances. We are now in a structurally different set of economic circumstances with revenue and expenditure.

The various illustrative cases listed in pages C.19 to C.23 in the Budget Statement suggest taking money out of one pocket and leaving some in the other. It is less than what was originally decided by the Oireachtas as to what these people needed in the first instance. However, they are expected to feel grateful because they are better off. Whatever else the levy does, it confronts the Taoiseach's professions of commitment to republican egalitarianism. They are torn asunder by this measure.

In one year the levy will bring in €1.1 billion, much needed because of the gaps that have occurred in the tax yield. I am not arguing with the Government's need for a revenue take. However, what would be the equivalent of loading that levy on the 20% and 41% tax rates? What figures did the Government look at when it decided to apply the levy across the board? It is difficult for us on this side of the House to evaluate the full nature of the decision made since we do not know the quantitative nature of the alternatives. What are the administrative implications of taxing an extra 600,000 people who are not in the tax net? On which agency's shoulders does that burden fall? Are the IT and other collection mechanisms in place to deal with this?

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