Arthur Morgan (Louth, Sinn Fein)

What has happened in this regard is grossly unacceptable.

What will be the long-term achievement of Government policy in this regard? It has taken away the spending power of a group whose members we need to spend their money in order to turn the economy around. It wants people who have 2009 costs to live on 2004 wages. It has achieved the agenda of Colm McCarthy and company of driving down the standard of living and the rights of the majority. However, it has done little to encourage economic recovery.

As already stated, Sinn Féin's pre-budget proposals would have succeeded in raising and saving in excess of €7.5 billion, a good deal of which would have come from simply introducing more fairness to the taxation system. There are some paltry measures included in the budget. The tax on exiles does not go far enough. The raising of the effective tax rate goes some way towards what is necessary but, again, this will not be nearly enough in the overall scheme of things. There are no wealth taxes or third rate of income tax included in the budget. In addition, the PRSI ceiling has not been abolished. What will be the benefit of the universal contribution, at its low rate, for high earners? The Government and its minions have conducted a great deal of PR in respect of why taxation is untouchable. I believe none of it.

There is still a great deal of inequality in the taxation system. On one hand, the Government informs us that it cannot afford to increase taxes. On the other hand, however, it is informing all and sundry that Ireland remains a low-tax economy and that the latter is one of the Government's greatest achievements. Which statement is correct? This is nothing of which to be proud. We have a €22 billion deficit and the Government is still refusing to create a fair taxation system. We must stimulate the economy and to do that further revenue will be required. Taxation cannot continue to be untouchable and the Government cannot continue to laud our low-taxation economy as being job creation-friendly. If the latter is true, then where are the jobs? Why have we reached a position of stalemate?

I wish to outline the facts. Low taxes at the top are not stimulating the economy and for the bulk of PAYE workers at the bottom, ours is not a low-tax model. The bottom percentage rate of income tax is low, but there is a huge degree of stealth taxation and a lack of service provision that makes Ireland, for this group, a very high-tax economy. These are the people who should not be touched for more tax. However, the Government is determined to have it both ways: high taxes at the bottom; and low taxes at the top. Such a system is not sustainable.

The Government will soon have no option but to address the inefficiencies in the tax system. The Commission on Taxation identified 245 tax reliefs that between them pay back almost as much as is taken in income tax. Many of these reliefs are abused by high earners. The Minister is nodding in agreement. Perhaps he will indicate what he has done about this. I am not a member of the Cabinet but he is. Could he not have negotiated more strongly in respect of some kind of fairness in the taxation system? Does he not realise that people throughout the country, and not merely those in his constituency, expect that of him? What is certain is that the Green Party did not negotiate strongly in respect of this budget.

There is no sophistication in the system. Ireland has two tax bands while most other countries have between three and five. Are we incapable of developing a fair and progressive taxation system or is it a lack of political will to ensure those at the top pay their fair share? The Government claims that there is progressivity in the tax system. There is no progressivity in the system for those earning over €75,000. If anything, one can progressively pay less tax the higher up the earnings scale one goes, particularly if one has access to the services of a good tax accountant, of whom there are quite a few.

The sad reality is that when the Government is eventually obliged to reverse the inequalities it wrote into the tax code, the public finances will have spiralled out of control. I predict the Government will look to lower earners first when it seeks to increase taxes.

The carbon tax will not bring fairness to the system. If such a tax is to work effectively, it should be revenue-neutral in nature. The Government will use the carbon tax in order to raise revenue. Members of the Green Party appear to have lost much of their thinking capacity. Surely, however, they realise Fianna Fáil has only committed itself to this measure as a way of plugging the financial hole. Fianna Fáil is no more interested in saving the world than it is in saving the economy.

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