Enda Kenny (Mayo, Fine Gael)

The Government got it completely wrong in this case. We oppose this group of Financial Resolutions because they will hit low and middle income earners. The imposition of income tax as proposed by the Government will destroy the traditionally low level of tax levied on the wedge between the employer's bill and the take home pay of the employee. The Government is going to force down the standard of living for those on low and middle incomes.

Fine Gael proposed not to increase income taxes in 2011 and we demonstrated this could be done by making savings of €250 million through 6,000 further redundancies in back office and administration throughout the public sector. There are further alternatives for making savings, such as greater cost reductions and further changes to the public service.

Under this imposition, a single person on the minimum wage will be worse off by €879 annually or €17 per week. If one takes account of the changes made in respect of income tax and the universal charge, such an individual will lose twice as much as if he or she was on welfare. This is a savage imposition on the lowest earners. It is not the kind of progression we need and, from that point of view, must be rejected.

According to the figures outlined in the budget, the income tax that is now to be imposed means a couple with three children and a single gross income of €50,000 will be worse off by €1,800. Such a family would be better off by €1,600 under the alternative plan proposed by Fine Gael, which makes it clear that it is not necessary to increase income tax in 2011.

The Minister for Health and Children, Deputy Harney, was previously an advocate of streamlining income tax and reducing the tax burden. She will be aware, therefore, that these proposals are short-sighted, lack ambition and will force down the living standards of people on low and middle incomes. They contain a series of landmines which were never acknowledged by the Minister for Finance. They are appallingly short-sighted and retrograde and, for these reasons, I oppose them resolutely.

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