Stephen Donnelly (Wicklow, Independent)

The introduction of the universal social charge was a bizarre measure. I am encouraged that Sinn Féin has tabled this motion and that the Government has agreed to review the charge. Having listened to the debate, there seems to be broad consensus in the House that such a review needs to happen. I accept that we need to broaden the tax base, not because we want lower income workers and families to pay more but because we all have to contribute if we are to get the public finances under control and not drown in the tsunami of debt we face. However, this is not the way to do that. It does not reflect the nature of this Parliament or society.

The universal social charge is a regressive tax. By my calculations, the switch from the health and income levies to the charge caused the amount of tax paid by someone earning €14,000 to increase by 1.4%. By contrast, I calculate that the same switch caused the amount of tax paid by someone earning €250,000 to decrease by the same amount, 1.4%. That is why it is a bizarre and regressive tax that runs contrary to our social values and the stated aims of many Members of the House.

The universal social charge penalises self-employed persons. It provides that self-employed persons who earn more than €100,000 must pay an additional 3% by comparison with those who are employed. It could be argued that those who earn more than €100,000 can well afford to pay an additional 3% - that may well be the case - but they should not be penalised in a way that people who are employed are not. It could be argued that persons who are self-employed face additional stresses and take additional risks. The penalisation of such individuals seems bizarre. The motion has two advantages over the Government amendment. First, it explicitly recognises the regressive nature of the universal social charge, something which the proposed amendment fails to do. Second, it proposes immediate measures to help the most vulnerable, namely, reversing the universal social charge and introducing a health and income levy which, although imperfect, represents progress. The claims by various contributors that the levy would be administratively complex, that Departments would find it difficult to adjust their accounts or that Fine Gael gets things right first time and therefore does not take helpful interim steps are disingenuous and unworthy. I certainly would not tell the most vulnerable people in our society that it is too difficult or that we want to get it right before we help them. For these reasons, I will be voting to support the motion.

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