Arthur Morgan (Louth, Sinn Fein)

I welcome this opportunity to put forward the Sinn Féin proposals to the Minister. He has stated repeatedly that he does not want to take the measures his Government is about to take, namely, cutting dole, pensions, child benefit and front line services. Sinn Féin's proposals would raise sufficient funds for him to avoid being obliged to introduce any of those measures and we hope he is willing to adopt them. If he does not seek actual proposals but is looking to Sinn Féin to provide political cover to further impoverish the most vulnerable in society, he will be left wanting.

Sinn Féin has examined a series of proposals that will contribute both to bringing borrowing under control in the short term and to raising money for a stimulus package that will address the deficit in the long term. The Government has failed abysmally to recognise the necessity of dynamic stimulus measures to kick-start the economy. Sinn Féin also challenges the other Opposition parties to support these proposals. Our proposals are fair and some are radical. However, radical measures must be taken with a €22 billion deficit. The Government has shown that it is not willing to leave anything off the table except taxing the wealthy. Its proposal to charge medical cardholders for prescriptions shows the moral cowardice of its approach. Sinn Féin is not afraid to take on the big earners and the vested interests. The Government would rather take from children and grannies than from its wealthy friends.

Before I outline my party's proposals, which I launched yesterday, I wish to consider briefly the coalition's own pre-budget outlook. The Government has claimed it is capable of running this State's economy, which is a dubious assertion considering the hames they have made of affairs to date. It has once again set out its plan for recovery in this pre-budget outlook, which is breathtaking in its assumption of correctness despite all the previous misguided and downright wrong forecasts from the Department of Finance. The aforementioned document almost is laughable in its poor analysis of the current crisis and the solutions it offers to us.

First, I note that a heading on page 4 of the pre-budget outlook states "Repairing our banking system – a separate issue to the fiscal challenge". I will credit the Minister for having done a magnificent job of separating the banking issue and his biggest brainchild, NAMA, from the fiscal issue. The special purpose vehicle set up for NAMA to keep the €54 billion the State will be obliged to borrow off the books is one of the greatest con jobs I have ever witnessed. The mantra from Ministers that this State cannot continue to borrow in the region of €500 million a week when, in one year, NAMA could end up costing the state €1 billion a week is one hell of a sleight of hand. Repeating the myth that the problems caused by the banking system are separate from the public finances does not make it true. Moreover, people will see it is not true when faced with a huge debt service obligation because money was borrowed to keep bank executives, shareholders and developers happy and not for public services such as hospitals and schools.

The next page of the Government's pre-budget document sets out five reasons it is necessary to take those crucial actions planned by the Cabinet and I propose to deal briefly with them. The first is "to restore economic competitiveness, without which we will be unable to benefit from the global upswing". This is the global upswing for which the Government is hoping and praying, like the rising tide, in the hope it will lift all boats. Unfortunately, the Government appears to think restoring economic competitiveness can only be achieved by slashing wages and public spending and does not contemplate our serious lack of infrastructure. Sinn Féin's pre-budget submission focuses on using this period of recession to invest in that infrastructure, thereby both readying the State for a return to competitiveness and stimulating the jobs market and hence the revenue stream.

The second reason is "to inspire confidence, internationally and domestically, that the deterioration in the public finances is being arrested". Were I an international investor, last May I would have heard the Government promise that, by the end of this year, Ireland would have a deficit of just €19 billion, which it would be reducing by €4 billion in this budget. It now is known that the deficit will be in the region of €22 billion but the €4 billion adjustment is still the Government's figure. We will be cutting spending to almost a stand still, which hardly is confidence inspiring. My party's proposals include a stimulus which will raise revenue so the cycle of cutting and deficit contraction can be ended.

The third reason is a gem. It is "to prevent the debt level rising to unsustainable levels so that the cost of servicing that debt is contained". My reply to that in a single word is NAMA. The fourth reason is "to assist economic growth by taking responsible action on fiscal and incomes policies, which will avoid unnecessary further adjustment in the labour market". This is interesting. Does the Government have an income policy? Can the Government tell us how this policy applies to Brendan Drumm, or to the Taoiseach? Or does the income policy apply only to people with average and low incomes? Is this necessary to avoid unnecessary further adjustment? Is this a promise from the Minister? Are we to believe that after he has slashed social welfare, pensions and child benefit, put a charge on medical cards and cut the pay of people on €30,000 or less per annum, that he will not do anything else and that there will be no further cuts after this budget? My party would protect those on low and middle incomes and bring fairness to the top of the income scale, particularly in the public sector.

The fifth point is "To restore expenditure and taxation to more sustainable levels." I thought taxation was completely off this Government's agenda. I bet the Minister is wondering how that dirty little "T" word crept in there. Our pre-budget proposals make a start towards fairness, but there is much more to do.

These are the Minister's reasons for his proposed fiscal adjustment and I question the motivation behind each and every one of them. I question everything this Government says because it has lied to us time and time again. It has been wrong time and time again. Not one financial measure introduced over the past 12 months has brought us closer to economic recovery. They have driven us further into recession. In the October budget it increased VAT, despite the State's being already over-dependent on consumption taxes, which the Minister acknowledged this evening, so contributing to the collapse in those taxes. In January it took money out of the pockets of low and middle income earners, lowering their disposable income. In April it doubled levies, bringing some of the lowest paid into the tax net and cancelled Christmas for people on the brink of poverty. The Government has taken from the economy where it makes no sense to take, the bottom and the middle. It has left the top relatively untouched, yet it claims there is no more room for taxation.

Our way of dealing with the social welfare bill is to create jobs, to reduce the live register figure of 422,500. Our total stimulus package of €4 billion must be paid for and to this end we examined the taxation system and genuine waste in the public sector. In total, combined with a transfer from the National Pension Reserve Fund of €2 billion, which is €2 billion less than the Government is giving to the zombie Anglo Irish Bank, we have raised €7.6 billion in our pre-budget submission.

Our proposals are radical and brave. We challenge the Government's assertion in its document that expenditure cuts are more effective than raising taxation measures to close a deficit, an assertion backed up by the disreputable IMF and that bastion of democracy, the EU Commission. The right will always seek and find other creatures within its ranks to back up its biased view of the world and the Government has done that well this year. Expenditure cuts in this budget will not bring about recovery. They will bring about poverty, irreversible damage and more cuts next year, and the year after, until the Government breaks its cycle of slash and burn economics.

The deficit is a result of our economic woes, not the cause of them and only a stimulus package for the economy will create the momentum for recovery that will ultimately bring the deficit under control. To pay for that stimulus and to bring much-needed funds into the State's coffers, the only option available to this Government is to raise money from those who can afford it. A 48% tax rate on income in excess of €100,000 raises €355 million. A 1% wealth tax on assets, excluding farmland, of more than €1 million, could bring in €1.6 billion. Standardising discretionary tax reliefs raises €1.1 billion. Capping public sector pay at €100,000 brings in €450 million. These are just a few of the many proposals we put forward yesterday. In total they help us to pay for a stimulus worth €4 billion that invests in a €2 billion labour intensive infrastructure package; that provides for a €600 million jobs retention fund; that cuts excise duty for the Christmas period and returns the Christmas social welfare bonus. These are all business and household friendly measures that will not only boost confidence in the economy but start bringing in the revenue needed for recovery.

This is not rocket science. It will not be popular for those used to being protected from Government measures except when they have a positive money-raising effect. It will, however, be a damn sight more popular with most on this island who fall into the not so well-off category. More important, it will put the country on the road to recovery.

The Minister spoke last October about patriotism and how it is necessary in these times. He asked for patriotism from the lowest paid, those who could least afford to contribute. I ask the Minister to show patriotism. This is a great land. We are a great people. We are masters at triumphing over adversity and punching well above our weight. We can achieve success again, but it must be a fairer success this time, not one that benefits the few but that benefits the many. To get there, the start must be fair. What the Minister plans for December is not fair and it is not just. Our proposals are both and we urge the Minister to take them on board at this critical time.

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