Kieran O'Donnell (Limerick East, Fine Gael)

This budget is probably the worst and most severe budget for the vulnerable, the lower paid and those on a middle income since I can remember. This budget will hit lower and middle income families and more particularly the old and the infirm.

What is proposed with regard to medical cards for the over 70s is that more than 125,000 of the 139,000 in receipt of medical cards, or 90%, will lose their medical cards. This has implications not only for medical expenses, it also has implications for accident and emergency charges and long-stay beds. It also has an income tax implication with regard to health contributions. The Government has not made this public but any person earning more than €26,000 a year without being in receipt of a medical card will pay a 2% health contribution. This means not only are they caught for the 1% levy on occupational pensions but they are caught for another 2%. This is a 3% Lenihan super-levy on old people.

People who telephoned Joe Duffy's "Liveline" programme today are worried about their elderly parents and the fact they left the VHI because in early 2000 Fianna Fáil gave medical cards to those aged over 70. If they can even get back into the VHI they face a ten year waiting time for the conditions they had prior to leaving the VHI. They must wait two years before any new conditions will be covered.

Is this fair for a return of €100 million? At present, the Government is guaranteeing the banks to the tune of €500 billion. I expect the Government to obtain more than €100 million. It will see €100 million in savings in terms of medical cards but it will also receive money from the 2% levy from many of these people. Shame on the Government. I expect the Fianna Fáil backbenchers to come out in support of this measure. It must be reversed. The Minister of State, Deputy Kelleher, knows it and I have no doubt constituents have contacted him.

Everyone here has elderly parents. When this was introduced people planned for life on the basis of it. They are now facing bills of €1,200 for the drugs refund scheme and paying fees to doctors and hospital charges. A constituent who rang me expects it to cost €2,500 extra per year which the person can ill-afford. These people have paid their dues to society. The Government proposes to introduce a measure which is unfair, crude and defies logic. I expect the Government to reverse the decision. A typical retired person on a €30,000 occupational pension will pay almost €1,000 extra in tax to the Government. He or she does not even know how the Government will use the money because to date it has wasted money and not used it wisely.

The Government states it will save €150 million in terms of nursing home charges and normal medical expenses. Every family with an elderly parent in a nursing home receives tax relief on it, many of them at the higher rate. Typically, it costs approximately €50,000 to keep a person in a nursing home. People will lose €10,000 on this.

Going through all the measures, this budget is absolutely crippling for the elderly with the 1% levy, the 2% super-levy on health contributions, the tax on savings through DIRT increased by 3%, VAT increased by 0.5%, accident and emergency charges increased by 50%, the cost of drugs increased by 11% and they must also pay doctors fees. The old age pension has increased by just over 3%, less than the rate of inflation. The Government talks about being a caring government and looking after the elderly. The budget reverses this.

Last night, the Taoiseach stated the income levy was a fair measure. Over successive budgets, Fianna Fáil boasted that it brought countless thousands of people out of the tax net. In last year's budget it was stated that 878,000 were not in the tax net. This does not apply any more. Everyone is paying tax. The Government has gone for the soft option. Lone parents will not be taxed on social welfare benefit but will be hit by the 1% income levy if they get a job. The Minister of State at the Department for Enterprise, Trade and Employment, Deputy Billy Kelleher, knows small business employers will have to compensate their employees for the levy. It will mean uncompetitiveness and job losses. The budget contains no provisions to arrest the rate of unemployment. The budget's measures will make it worse by adding 1% to the inflation rate and sapping money out of the economy. It will sink us further into recession and eventually a depression.

Fine Gael, on the other hand, proposed no increases in taxes but increases in social welfare to keep pace, and even go above, the rate of inflation. We proposed proper public sector reform, an issue with which Fianna Fáil is incapable of grasping and dealing. The Government ratcheted up public sector expenditure in the past ten years by 150%. Therein lies the issue that needs to be tackled. Instead, the Government, seeking €2 billion, will make it up with the Lenihan levy, some €1 billion, and a raft of other measures which hit low and middle-income families.

The payment of corporation tax has been pulled back by five months to balance the books. Businesses are already under severe pressure with cashflows, yet the big arm of the Government puts more pressure on them with this measure. I am very sure the Government will not be giving businesses much latitude in the payment. Instead of paying it in November, companies will be expected to pay half of it in June. This is to cover up the Government's mistakes and lack of proper reforms.

There have been increases across all taxation areas — income tax, motor tax, capital gains tax and excise duties. Last night, people in Limerick were queuing to fill up their car tanks because of the increase in the price of petrol. People are under enough pressure. Limerick has seen a 53% increase in its live register. The budget has proposed nothing to correct this through proper re-training.

A €10 levy has been introduced on flights out of Shannon Airport.

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