Michael D Higgins (Galway West, Labour)

I was deeply disappointed in the Minister's speech. The Minister had an opportunity of explaining a number of choices that he has obviously made so far, but chose not to address them. For example, why has he decided not to seek from taxation a portion of the €4 billion to which he referred? Nor has he explained the logic that led to the April financial statement and how it has changed so fundamentally in the preparation of the budget in three weeks' time. One of the most upsetting things about this debate is its evasive quality. It is not a debate about where we want to be economically. Nor is it a debate about a new form of social economy with a better balance between taxation and services, favouring job creation through green jobs, recognising the work of carers and the immense potential of creative industries. It has been negative in that respect.

It is interesting to see the order in which the Minister put the Government's priorities in his speech. He began by saying he is ensuring that we will have a properly functioning banking system, taking steps to ensure that our public finances are stabilised. He then referred to international competitiveness. He mentioned unemployment almost as an oversight. The social consequences of being "where we are", the phrase that is regularly used now, include low incomes, poverty and a lack of job opportunities. Some 15,000 to 18,000 young graduates will be added to the astronomical unemployment figures.

There is, however, a certain revelation in the Minister's poorly prepared speech. On 26 March 2009, he answered Parliamentary Question No. 59, which I tabled. I asked him about such proposals as he may have had for gathering income from wealth. He replied:

I have been informed that no general research has been carried out over the past ten years by either the Department of Finance or the Revenue Commissioners regarding the extent and breakdown of wealth as opposed to income.

It is interesting to note what we should be discussing in the Oireachtas if one had decided, for example, that one was not going to touch non-productive capital. That is political economy, which is important. One may differ as regards ratios, but as regards what is to be gathered from taxation, a balance must be achieved through a reconfigured capital programme or reductions in expenditure. The speech told us nothing about those matters, although it did have a few clichés on taxation.

The history of wealth tax proposals is interesting. I was around when it was attempted before. It has never been opposed in any country on the basis of its yield, but has always been opposed on the basis of what it revealed. Those who have written articles and academic papers on the subject take that position rather quickly. If there is to be no contribution from non-productive capital, what has been happening? The tax concessions that were made in coming to the current position are very interesting. According to the Revenue Commissioners, in 2003, two thirds of those who invested in hotels and holiday camps had incomes of over €200,000. In 2004, annual tax reliefs cost us €8.4 billion, which was 22% of total taxation. In 2003, the Revenue Commissioners told us that three individuals among the top 400 paid no income tax at all because of tax breaks. Some 48 had an effective tax rate of less than 5%.

Something has been done about this, however. According to figures produced by the Minister last July, it was suggested that, as a result of changes, the top 25 people earning over €2 million each had an average effective tax rate, after application, of 20.45%. I could cite more statistics like those, but I will simply summarise the position. Those who benefited from this raft of McCreevy concessions, which have rolled on to the present Taoiseach's time, were a very narrow group of people. People in the street and those attending my clinics ask me what has happened to all the money. As we know, by 2004, some €8.5 billion had been spent on property abroad by Irish owners. The Minister now says he is leaving all that alone, that he can only look at expenditure cuts and it is going to be €4 billion. The media then join in and say the function of the Opposition is to produce where their cuts might be in relation to this €4 billion from expenditure. It is nothing of the kind. My function as an elected representative is to ask if we are trying to get back to where we were nine years ago. Let us accept that we had a disastrous failure in regulation and a disastrous banking policy. In addition, we had a property bubble which completely distorted the State's revenue income. Are we going to try to get to a new place in the economy and forge a new connection between economy and society, such that we will be willing to debate in Parliament the line below which people should not sink? That is politics and what we are elected for. We are not here to dance to some miserable tune.

I do not accept that the cut must amount to €4 billion, as the Government states. It is a long time since I was teaching economics but I am still aware of the dangers of turning a recession into a depression. Where every job is costing between €25,000 and €30,000 and there are associated employment-related costs, the Government's slash and burn approach to the economy is increasing the gap it is trying to bridge. In 2007, 214 high net wealth individuals were subject to an effective tax rate of 20.08%. It is outrageous for the Government to say it is seeking a consensus on leaving that rate intact. The mindless character of the slash and burn approach to economic redress is such that it results in job destruction.

I know the creative industries well. The figures produced by Indecon's recent study show the Arts Council represents a better multiplier than that associated with the money spent in respect of the IDA. The Arts Council, through its funding, is responsible for the direct employment of 2,042 people. Council funding amounted to 40% of the total revenue for supported organisations. The total employment figure is 3,034. If one were to include publishing, video, music, etc., one would note the number employed through very modest grants amounts to 16,689.

When I was Minister for Arts, Culture and the Gaeltacht, with responsibility for film, among other things, I noted how rich this area was in skill. The mindless acceptance of the McCarthy report proposals would be devastating in that it would wipe out a growth area. The value of the creative sector in the eurozone is €564 billion and this figure is increasing. It is the fastest growing sector in the eurozone, yet it is suggested our function in the House is not to speak about the future form of the economy, the jobs in the creative industries or applied technology through science, or those that would exist if we decided to address the issues associated with caring.

If one asked me directly whether I wanted Scandinavian levels of service and taxes and whether I would be in favour of forms of redistributive taxation that would include a tax on accrued and unproductive wealth, I would reply in the affirmative. We should get to a new place and I do not see why we should wear ourselves out in a narrow stupid debate about what cuts one would propose, in which debate one would say, "Show me your cuts". It is a vulgar piece of rubbish and a poor excuse for an economic debate three weeks before the budget. We have had enough of it and I hope Mr. Charlie McCreevy never comes back to Ireland to see the destruction he presided over.

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