Seymour Crawford (Cavan-Monaghan, Fine Gael)

The Finance Bill 2008 is the last section of a completely discredited budget, with many U-turns and a total failure to face reality. Since last July, the Taoiseach and his Ministers prepared the country for what they said would be a tough but fair budget. They would look after those in need, but instead the budget attacked the medical card for the elderly, the education of our children, and by raising taxes on employment, the incentive to work.

In County Monaghan over the last five years, 1,200 jobs have been lost in the furniture industry. Along with the losses in the building trade, hundreds have also been lost in the timber frame manufacturing companies IJM and Century Homes.

The Bill before us increases VAT at a time when the VAT rate in Northern Ireland has been cut. This will have a devastating effect in my constituency and the entire Border region. The VAT rate in Northern Ireland is now 15% compared with 21.5% in the Republic. The price of petrol was also increased in the budget by eight cent per litre, bringing it close to the price in Northern Ireland and therefore discouraging people from travelling South to buy petrol and other goods.

I urge the Minister, even at this late stage, to reconsider the VAT situation and take account of the proposal made by Fine Gael last summer to introduce a VAT rate of 20% and claw back some of the windfall benefits obtained by the ESB and others. It is vital the Ministers for Enterprise, Trade and Employment and Finance take a serious look at the price differentials north and south of the Border in the same retail chains. They must deal with the anomaly that exists, especially with regard to food products, to which VAT does not apply. Taxes on car parking spaces and tax relief for bicycles will not affect the Border region.

We understood that the Taoiseach had a plan to take the country out of recession but this Bill introduces 17 new taxes aimed at ordinary taxpayers, raising an average of €2,500 from a typical household. The Minister has been forced by the Opposition and the general public into a U-turn on the income levy provision, which is now a little more equitable than its original form, but there are still serious problems for self-employed people where their gross income is being utilised as the base. In the farming sector, for example, most farmers have been forced to make major investments on their farms for environmental reasons. That investment will not increase their incomes by one cent but the normal depreciation allowance will not be allowed.

When the Government took initial steps to deal with the banking problems it was supported by the Fine Gael Party. However, it is totally unacceptable that the current uncertainty be allowed to continue, putting serious pressure on small industries for whom necessary and normal overdrafts are no longer available. It is vital the Minister brings his discussions with the banks to a speedy conclusion to ensure that finance is available to small businesses. Otherwise, more jobs will be lost and our best workers will either emigrate or join the swelling dole queues, thus increasing costs to the State.

It is unreal that at a time of economic difficulty, the Government has chosen to target education. There is no doubt the increase in class sizes and the lack of teachers and support services will mean that disadvantaged children and those with disabilities will have a lesser chance of obtaining employment on leaving school and will, in the long term, cost the country much more.

I cannot leave the subject of the budget and this Finance Bill without referring to the complete lack of leadership and responsibility at the Department of Health and Children and the HSE. The Finance Bill itself does not deal with the medical cards for those over 70. I understand that the medical card fiasco will be dealt with in separate legislation. However, it is impossible to understand the logic of a Minister and her appointees closing public hospital wards, such as the orthopaedic ward at Our Lady's Hospital in Navan, where there are state-of-the-art theatres and top quality staff. Patients who should have been operated on in that facility are now being sent to private facilities and their treatment is being funded under the National Treatment Purchase Fund or under private health insurance. Clearly, for the Minister for Health and Children, it is more important to prop up her friends in the private sector than to deal with the mismanagement of public health services.

While I welcome the U-turn in the Finance Bill vis-À-vis the original budget statement that full tax relief would not be available to those who must pay nursing home charges, the fact that the so-called fair deal has been delayed indefinitely and its financial structures severely limited will have a major effect on many families in the future.

I welcome the fact the Minister for Finance is committed to examining the overall cost of public service. Once again, however, rather than demand responsibility from the 33 Ministers and Ministers of State, he has decided to set up another independent review. Unfortunately, the track record of this Government in dealing with problems highlighted by the Opposition, the national media or independent reviews is not promising. I do not expect a better result from this latest review, unless the Taoiseach and Minister for Finance accept that major surgery is needed to bring the cost of running this country under control and to regain our lost competitiveness.

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