Thomas Pringle (Donegal South West, Independent)

It is widely accepted in civil society that the USC is an unequal and regressive tax targeted at low- and middle-income earners. The Labour Party recognised this when it called for a review of the tax in the past. To see a tax introduced that disproportionately affects workers on low and middle incomes and then, when in Government, to support its continued collection is an affront to the hard-pressed workers in our society. A worker earning €25,000 per year is paying €1,069 in the USC tax, which represents an increase of €569 per year compared to the old health levy system. This regressive tax has knocked the wind out of people who are already struggling and finding it more and more difficult to survive this recession. It is even more galling for these workers when they see the billions that have been - and will be over the coming days - poured into the zombie banks in our State.

The Government does not seem to realise that low- and middle-income earners spend proportionately more of their income in the real economy, driving demand for goods and services that in turn generates more tax income. It is no surprise that the Exchequer returns from February of this year show a VAT shortfall of €129 million. This can be directly related to the impact of the USC. The effect will be compounded in the year ahead as people on these income levels see their spending power curtailed further. The USC tax will have the compounding effect of further reducing demand in the economy, and the vicious circle will continue unabated.

The programme for Government states that the USC is to be reviewed. The review needs to bring real change to this unjust tax. However, the Labour Party will probably achieve only a token adjustment from its senior Government colleagues, which will be dressed up as a victory, while low-income workers continue to suffer. For these reasons, I will support the motion as put tonight.

See this speech in context