Róisín Shortall (Dublin North West, Labour)

It is not a statement of fact; it is a political statement. It also states that taxpayers must contribute according to their means so those who can pay most will pay most. Again, this is a political statement. It is propaganda. It is entirely untrue, by the way, in respect of the budget. It is propaganda, and we should not be getting this type of propaganda from the Department of Finance. As far as I am concerned, this issue will need to be addressed at the earliest possible stage by the new Government.

I want to speak about the approach taken in the budget and the issues under discussion in respect of the amendment. The approach taken in the budget has been about making cuts in the economy which in our view will do serious damage. The scale of the cuts and their severity on those who can least afford to take them will be extraordinarily damaging and dangerous to this economy. It is not only the Labour Party which is stating this. Yesterday, the ratings agency Fitch was the first to strip Ireland of its A credit status and this was principally to do with the huge level of bank debt attaching to the Irish State. It also warned that the budget cuts might choke the Irish economy rather than reviving it and this is the big fear. This is what the Labour Party has been warning about; that these cuts would choke the economy and do long-term deep damage to it. It is of great concern that one of the international ratings agencies should be of the same view. This is the danger and this is what we face in the coming months.

The amendment relates to the cut in the minimum wage. It is important to point out that at present people working 40 hours a week on the minimum wage earn €346. Under the arrangements to cut the minimum wage they will lose €40 of this, reducing their pay to €306 for a 40-hour week. Under the other budget provision which will prove to be a ticking timebomb, namely, the universal social charge or rather the universal antisocial charge, a person working a 40-hour week on the minimum wage will lose €8.42 through tax. The Minister for Finance told us the reduced minimum wage would not be in the tax net. We know now that this statement is completely untrue. The Department of Finance has stated the universal social charge is a tax; this statement is in the budget book.

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