Kieran O'Donnell (Limerick East, Fine Gael)

We will be opposing both these resolutions. Prior to the announcement of the budget, the Government gave the impression that it would be a fair one, would spread the pain across all income groups and that it would not be extremely unfair to families. Financial Resolution No. 1 proposes a doubling of the income levy for people on a moderate income. People earning below the minimum wage will now have to pay the income levy at a rate of 2%. A married couple in receipt of one income of, say, €50,000 a year, will pay a €1,000 extra a year in terms of this income levy. It is a punitive measure and lacking in innovation. It is a book-keeping exercise. It does not take into account people who are suffering and under pressure in terms of the cost this imposes on them.

Many couples and single people have mortgages. It is proposed that all mortgage interest relief will be eliminated after first seven years of the mortgage. These people would have bought their houses in 2002 at prohibitive prices as the building boom was getting under way. One of the reasons they bought them was that they qualified for mortgage interest relief. The Government is now pulling the rug from under these people and, effectively, abolishing any form of mortgage interest relief.

These two measures are outrageous in any person's language. If the Government had hit the very high income earners with the imposition of very high rates, they would have been the people who could have afforded such a hit. Under the income levy proposal, the Government is hitting a couple on an annual income of, say, €50,000 with a levy of €1,000 per annum and this measure will now cost them an extra €500 per annum. A couple in receipt of an income of €40,000 per annum, will be hit with an income levy of an extra €400 per annum. We will be voting against this resolution.

This budget hits middle income earners suffering financial difficulty. It also hits the lower paid across a range of measures. A person on the minimum wage will now have to pay the income levy. People will also suffer the loss of mortgage interest relief at a time when they are struggling to make their repayments, even those interest rates are decreasing. We will oppose both these financial resolutions.

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