Pat Rabbitte (Dublin South West, Labour)

This is no way to enact a Finance Bill but then, this is no way to govern a country, with a half of a Cabinet, and with a Taoiseach driving through a truncated Finance Bill that has been dictated from Frankfurt, Brussels and Washington. This is a Finance Bill to legislate for a budget that had a majority in the House on budget night but now the Minister for Finance is bartering with Independents to conclude the process. The reckless mismanagement of our country's affairs has made a severe budget unavoidable and this is the most severe budget of modern times.

However, severe or not, this House is entitled to demand that the measures being enshrined in law are fair. The manner in which the universal social charge is being introduced is not fair. It is not credible in the circumstances in which we find ourselves, to argue that 45% of what the Minister calls, "tax units", pay no tax. However, to bring in a new universal charge that kicks in at an annual income of €4,000 is manifestly unfair. Workers on low incomes are hit by a double whammy. This Government has cut the minimum wage and introduced the universal social charge.

I welcome the minor change for medical card-holders announced yesterday by the Minister, the cost of which will be sourced from high earners. However, he could hardly have persisted with the universal social charge that had an employee on €35,000 per annum losing €12 per week while the self-employed person earning more than €200,000 per annum was gaining €11 per week.

In view of the brief time available I will summarise my contribution. The cumulative tax changes brought in by the present Minister for Finance are so severe that there is no further scope for increases in personal taxation for anyone earning less than €100,000 per annum. The Labour Party alternative budget before Christmas would have raised some €870 million in personal taxes. The actual increases imposed by Fianna Fáil in this budget increase personal income taxes by €1.2 billion. We cannot further tax people on low and middle incomes.

The challenge facing whoever comprises the new Government is to wriggle out of the strait-jacket that is the legacy of the outgoing Government. We have no choice but to get our public finances under control but we cannot bear the burden imposed on us by the IMF-EU bail-out. Our sovereign wealth fund, the National Pensions Reserve Fund, has been thrown into the pot by the Government in the bailout negotiations. The National Pensions Reserve Fund will be cleaned out before the end of the current year. Our freedom of movement to stimulate growth is severely restricted. Everyone knows that unless our economy can be returned to growth, the kind of growth that produces employment, that begins to put people back to work, we will be unable to pay our way.

Finally, I must mention the huge bitterness among the public about what the banks have done to our country. Ordinary people are convinced that no banker will be required to hang his Armani suit on the back of a door in Mountjoy Prison. The circumstances and the damage done to our standing in the Councils of the European Union, where we used to punch above our weight, where our networking was professional and effective, has been damaged in recent years. As a result, the ECB kicked around this country when it came to agreeing the terms of the bailout.

If it is true - as it undoubtedly is - that our banks behaved recklessly, it is also true that those who loaned to them behaved recklessly and the terms of that IMF-ECB bailout was as much to protect the eurozone and to protect German and French banks as it was to aid Ireland. The first challenge for whoever comprises the new Government will be to revisit that bailout and take advantage of developments happening in the wider eurozone to negotiate a eurozone-wide debt relief programme which would give some freedom to move in this country and some capacity to lift the restrictions to stimulate growth and to get people back to work again.

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