Eamon Gilmore (Dún Laoghaire, Labour)

I think I understand why the Government has done this. The Government has capsized the economy and found itself in a position where it must increase tax. Having sold itself to the Irish people as a tax-cutting party and a tax-cutting Government, however, it cannot use the "T" word. Therefore, it is bringing in a new tax and calling it a levy. This is a new tax. It is a dishonest and a regressive tax. It is dishonest because the Minister will not say that it is a tax and it is regressive because it applies across the board. The people on the lowest incomes will end up paying this 1% levy.

When one thinks about it, in the context of the pay deal that has just been negotiated, the local authority road worker on a low level of pay who is told, under the pay agreement, to take a pay pause until next September or October, is now, in effect, having his pay cut by 1% as a result of this levy. It applies, not on a graduated basis but to everything, from the first euro he earns to the little bit of work he does on overtime.

If the Government had wanted to increase taxation, it should have introduced a proposal that was honest, stated that it was taxation and introduced it on a graduated basis, but it has not done that. It wants to live the lie that it is a tax-cutting Government while at the same time applying what is a new tax to the lowest levels of pay.

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