Mattie McGrath (Tipperary South, Independent)

I concur with previous speakers that the universal social charge is a tax. It was presented as a way of simplifying the tax system by consolidating health income levies. We had no problem with it when it was first announced because there is nothing wrong with the concept of a universal social charge in itself. The problem, however, is that the rates at which it is charged affect low and middle income earners who are already struggling on the breadline or below it. This flat tax targets people earning as little as €77 per week at the same rate as those on annual incomes of €100,000. That is unfair by any standards.

Little notice was taken of the charge until its impact was felt in people's wage packages. We have seen the devastation in our economy ever since in terms of shops and businesses which are not doing transactions. It will have a massive impact on next year's tax returns. I recently spoke with a Revenue official who acknowledged that many small businesses are unable to pay taxes or wages, which has the result of forcing staff onto the dole queues. This was a short-sighted decision by the mandarins in the Department of Finance. I am glad the former Minister for Finance is in the Chamber because I had numerous exchanges with him on the issue. I thank him for changing the measures that affected medical card holders but this charge is unfair and will have the wrong impact.

The budget introduced a cut to the minimum wage but we were unable to introduce a maximum wage. I lobbied the then Minister on that measure but, while he announced it in his budget speech, he conveniently forgot about it when it came to the Finance Act. The high salaries paid across the public sector and to the CEOs of semi-State companies are unjust and inequitable.

The charge must be reversed because it will have an adverse effect on the Exchequer. People will have insufficient money to buy basic necessities and businesses will close or be unable to pay their tax returns.

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