Brian Hayes (Dublin South West, Fine Gael)

I welcome this amendment tabled by Deputy Burton and the Labour Party. As she rightly says, a Finance Bill, while it deals with income and expenditure and sets out a tax code for the full administrative year, is probably the only vehicle through which Members of the House can seek from the Minister and the Department of Finance a report on issues of concern that arise from time to time within the tax code.

No doubt the Minister of State, Deputy Martin Mansergh, is aware from his constituents in Tipperary South that the matter Deputy Burton raised is an issue of genuine concern. Despite the minimal changes that have occurred in recent years, there is a necessity for a comprehensive report, as Deputy Burton has said, to be able to reassure compliant taxpayers, the PAYE sector in particular, that there is fairness in terms of how these individuals are treated, what their status is, the length of time they stay in this country and the parameters around that. It is inherently right to insert this amendment in the context of this Bill to allow for that report. Even if the Minister was to assure the House that while it might not be possible in the context of this Bill but at some time in the near future a report would be issued by his Department along the lines suggested by Deputy Burton, some good could come from that.

The changes announced by the Minister for Finance on 7 December, the changes on budget night and those being enacted in this legislation have a dramatic effect on ordinary people, particularly those on low means. We know the consequences of the new social charge in respect of taxpayers on incomes of €4,000 or more now in the net, despite the amendments announced yesterday. The most obvious unfairness, irrespective of the failure to index tax credits, is that there is now a marginal rate for taxpayers on an income of €32,000. Once an income reaches €32,000, a person is paying the top rate of tax, along with the 7% and 4% social charge, effectively bringing the top marginal rate to 52%. Having had a period over many years when tax was relatively low, we are rapidly moving to a very high marginal rate. It is a difficult situation, where incomes are being slashed and in many instances where people are on part-time or no longer able to access overtime. They are also being affected by a very high new marginal rate of tax of the order of 52%. It is within that context that this debate is being framed.

People know the scale of the adjustment that has to occur in this country over the next few years to bring Ireland back to some form of economic stability. People are prepared, albeit in difficult circumstances, to make the adjustments in terms of their household income and in terms of the income that exists within this society. However, what they want to see throughout is a fundamental principle of fairness. People will do the heavy lifting in respect of the adjustments that have to occur if they believe that those at the top, in particular, are shouldering the burden and are prepared to make a contribution over and above ordinary and lower income taxpayers. We have an unusual situation, a type of "flight of the earls" in which people enter and leave this country, being treated as some type of high-bred class in terms of their tax status. That we allow such a situation to exist within the tax code adds to sense of unfairness that has to be tackled, so I very much support the amendment.

I am all ears to hear from the Minister of State, in the event that it cannot be done in the context of the Bill, why this might be the case. However, we have to be aware of this issue if we are asking people on relatively small means to do much of the heavy lifting in this economy over the course of the next few years. The tax code has got to be and must be seen to be fair to all.

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