Alan Shatter (Dublin South, Fine Gael)

I will confine my remarks to the first financial resolution. This levy, which could be properly described as Lenihan's levy, is the most dishonest aspect of the budget. It is described as a levy merely as a fig leaf to maintain the pretence that tax rates are not being increased. If the Government had any real integrity and was not interested in a sleight of hand public relations exercise, it would raise additional taxation in an honest and open way. As Deputy Quinn and others said, it would examine the 41% rate or the 20% standard rate and would in an honest and considered way bring a measure before the House. I am not saying I would support that either, but at least there would be some thought process attached to it and some sensible judgment would be made with regard to the affordability of a tax increase for those confronted by it. However, a fig leaf is maintained that we have not changed tax rates, we have only introduced a levy. I am sure Government spokespeople on radio and television will defend the fact that tax rates have remained the same, but this is a piece of nonsense.

This is a regressive measure. I watched the Minister for Finance on the "Six One News" this evening describing this as progressive taxation. This 1% levy applies to everybody across the community. Perhaps we should explore that a little further. Are we going to send tax inspectors into all schools, including primary schools, to check out whether children are doing part-time work for a couple of hours in their local newsagents or cutting the neighbour's lawn once a week? Do we now expect every post-primary student to make a tax return? How are we going to inquire into such matters? As a 14 year old in a family that had very little income, I can recall doing a newspaper round in my school days. I got up at 6 a.m. to deliver newspapers around the local estate where I lived and earned spare pocket money by doing so. Even in those days such work did not fall into the tax net. If any young schoolboys are doing newspaper rounds today, however, they will have to contribute financially for the mess the Government has created.

It is extraordinary that the Minister for Finance and the Taoiseach, who have had an involvement in the new national partnership deal, can introduce a 1% levy right across the board, having agreed an extra 0.5% tax reduction for the low paid. It is a grossly dishonest way to deal with the social partners. Fine Gael has set out its platform for a different approach. This levy will hit people who cannot afford to pay it and who should not be brought into the tax net. The labyrinthine bureaucratic structure that will now have to be created to collect this levy may well result in a substantial portion of it simply being flushed away in administration. By imposing this levy and other charges, the Government has done exactly what should not be done in an economy facing recession. A central objective of the budget should have been to protect jobs and ensure that small businesses do not close under financial pressure from reduced consumer spending. However, this provision and the budget generally takes more money out of the economy at a time when it needs to be stimulated and when people seek reassurances that they will have reasonable funds left available to them. This levy is essentially the wrong way to go. It is inequitable taxation.

At a time when the Progressive Democrats are going out of business, we are not just reversing the tax policy, which the Government has stood by in two successive elections and the Progressive Democrats proclaimed as being central to their policies, but are doing it in an unprecedented manner. I do not believe this is a once-off levy or one that we will see for one or two years.

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