Joe Costello (Dublin Central, Labour)

I wish to share time with Deputies Seán Sherlock and Aengus Ó Snodaigh.

The budget introduced on 7 December, is the meanest, harshest budget since Ernest Blythe took the shilling off the old-age pension. Social insurance benefit and social assistance rates, jobseeker's benefit and jobseeker's allowance are all reduced by €8 and supplementary welfare allowance is reduced by €10. The reduction in child benefit by €10 and the double whammy of a €20 hit for the unfortunate third child is a disgrace and an attack on children's rights. A generation of third children will be forever stigmatised by the budget of 2011. The greatest con job of all is the abolition of the health and income levies and their consolidation into the universal social charge. The present health levy does not apply to people earning less than €26,000. The universal social charge initiative was promised by the Minister for Finance in last year's budget and described as a revenue-neutral measure. Instead, it has been deviously designed to extract an entirely new stream of tax from the poor. It is a new tax which is described in this budget as such, despite the Minister for Finance's assertion to the contrary and his denial in the House today.

Never before in the history of the State have workers, who earn as little as €4,004 or less than €80 per week, had to pay such a tax on their earnings. The minimum wage-earners will now pay at least 2% on their entire earnings, rising to 4% for the final portion. The budget will reduce the income of the minimum wage earners by a minimum of 14%, rising to 16%, meaning that the lowest paid in our society are being savaged. On the other hand high earners will not be adversely affected by the new charge, as there is no further increase in the universal social charge after €16,016 or the 7% maximum irrespective of earnings. For them the 7% charge is replacing a combined 11% health contribution and income levy and therefore the highest earners are actually benefiting substantially from this measure by a very nice 4%. When the universal social charge is combined with the 10% reduction in tax bands and tax credits, working widows, working lone parents and people with a medical card will be hard hit with the cumulative cuts.

This is the second year in succession that the average individual weekly basic social welfare rate has dropped by €8 for the carer, the disabled, the blind, the widow, the single parent and the unemployed. The meanness of this budget knows no bounds in its ability to target the most vulnerable in our society. At the same time the Minister for Finance who promised to tax the 7,000 tax exiles last year has still not taken a cent in tax from that well heeled international jet set who fly in and out of Ireland at will. The budget proposes to abolish property-based tax reliefs by 2014 but like St. Augustine, not quite yet. The stated intention is good but Fianna Fáil cannot tear itself away from its propertied friends around whom so much of Government tax incentive policies were based over the past 13 years. Even when the game is up and the IMF and EU are running the country Fianna Fáil is still seeking to protect its influential friends and keep the taxation burden on them as low as possible.

The lunacy of what the Government is doing is summarised in the remarks of the Minister for Social Protection yesterday when he stated: "My Department currently accounts for approximately 38% of the total gross Government expenditure and therefore it is not possible to stabilise and reduce public spending without impacting on the Department's budget." The expenditure of the Department of Social Protection will actually increase despite these vicious cuts. The Government has missed the obvious, which is that it is unemployment that needs to be cut. Unfortunately it has no plans for making this happen.

Finally, Fianna Fáil without our consent foisted the debt of the banks on the people of Ireland. With its blanket guarantee of the bank debts it put a millstone around our collective necks. This budget is part of that millstone. We must reject it and put it back where it belongs, around the necks of those who created it. It is time to reject Fianna Fáil policies and politics. The first step is to reject the Social Welfare Bill and the budget in the Dáil today.

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