Leo Varadkar (Dublin West, Fine Gael)

Dealing specifically with the income levy, it seems to go against all the canons of taxation. It will cost a lot to administer and will bring 600,000 poor people into the tax net, which is socially unjust. The comments of trade unions were interesting, with ICTU suggesting this decision may, in itself, scupper the national pay deal. It was led to believe that low-paid workers would receive a 0.5% increase, but they will get a 0.5% cut. That is because they will now be eligible for taxation while before the budget they were not. There were other options. First, the Government could have taken the Fine Gael route of introducing a pay freeze for everyone earning over €50,000. That would have brought in approximately €600 million and the Minister would not have had to do this. It is ironic that it appears the pay deal may go down anyway. The Minister had that choice but he did not do it.

There is another alternative, which the Minister probably still has tonight. I should not really speak for both parties, but I think that most Members on this side of the House would prefer that the Minister would not opt for this regressive attack on the poor and that he would instead increase the standard rate of income tax to 21% and increase the higher rate to 43%. It would have the same effect, there would be less administrative costs and it would at least be socially just. Perhaps the opportunity still exists for the Minister to withdraw this proposal and to increase the standard and higher rates of income tax instead. If he must increase taxes, he should do it that way rather than introduce this levy. He should not attack the poor and vulnerable in the way he has done.

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