Pearse Doherty (Donegal South West, Sinn Fein)

It is also abolishing maintenance grants for postgraduate students. The Government is pulling down the shutters on the futures of thousands of young men and women not lucky enough to be born into a wealthy family. In this day and age, in a First World country, I do not know how anyone can stand over this. This is a mantra that is meant to distract people while the Government is holding them upside down and shaking the spare coins out of their pockets with its VAT increases, household charges, water charges and other stealth taxes.

Keeping rates and bands the same means keeping them the same for everyone. Therefore that means that those on €20,000 are treated the same as those on €200,000. That is nothing to be proud of.

We have proposed the abolition of the universal social charge, to be replaced with the income levy, with the lower rate reduced to 1%, while reintroducing the health levy. This would mean that everyone earning under €75,000 would be better off under Sinn Féin's direct taxation proposals. The Government has failed to do that today. It would also mean 500,000 people being taken out of the tax net.

The Government has claimed that people will come out of this budget with the same take home pay. What it does not say, however, is that when they get home with their pay packets, they will be fleeced by higher bills, charges, stealth taxes and a range of other measures aimed at reducing their disposable income.

The Minister for Finance has announced a tinkering with the universal social charge. I welcome the fact that he has ensured that those earning less than €193 per week will be exempt from the universal social charge. However, does the Taoiseach think it is fair that people earning €193 or €194 a week are still paying this unjust charge? There were 514,000 more people brought into the tax net as a result of the universal social charge. The measures announced today will leave 184,000 of them still in the tax net. These people are paying a regressive charge that is not only damaging their quality of life, but also economic activity in terms of consumption.

To have lifted everyone earning under €15,000 out of the universal social charge would have cost €120 million. Taking everyone out from under the minimum wage would have cost €170 million. Sinn Féin would have abolished it, but even this measure would have been fairer than what the Government has done today.

We look at tax in a different way. We go after wealth, tax breaks and loopholes. Reducing the pension ceiling and capping or standardising pension reliefs would bring in €550 million alone. Halving mortgage interest for landlords would bring in €400 million. The changes that we proposed to capital acquisitions tax and capital gains tax would bring in €360 million. This is a strategy that increases revenue without damaging the wider economy.

Flat rate taxes are regressive. The Labour Party seems to have mixed up the definitions of "regressive" and "progressive" since its election manifesto, so I will simplify it for the party. Regressive taxes are unfair and not as productive. If they look it up in the dictionary, they will find it beside property taxes.

Nowhere is the Minister for Finance's political choice to go after the socially and economically vulnerable more stark than in his decision to levy a flat rate regressive tax on households. A household charge is a stealth tax. The way he has levied it will hit those struggling the hardest. Regardless of income or property size, everyone will pay €100. A family with three children, a mortgage of €1,000 a month, and mounting energy and food bills will pay €100. A wealthy individual, however, who is living in a valuable home with no mortgage, will also pay €100. Perhaps the Taoiseach can tell me how this measure is fair.

Some Government party Members will say it is only €100. They will say that because they have simply no idea what €100 means for a family that is already on the breadline. Add that €100 to increased bills, increase travel costs and cuts in income, as announced yesterday, and we will see what it starts to mean and how it adds up. It is only €100 this year but we know from the programme for Government and the memorandum of understanding that Fianna Fáil negotiated that it is to increase year on year.

What is more distressing is that the Minister for Finance is levying this charge on people, many of whom are in mortgage distress. These people took out huge mortgages, at high interest rates in some cases, and paid massive sums in stamp duty just to own a home. The Minister has done little or nothing for the 100,000 households in mortgage distress. Today he has said he expects them to pay the Government a €100 household charge on top of their bills. It is neither right nor fair.

The Minister has lined up stealth taxes in this budget but I wonder if he has given any thought to their effects. Take motor tax, for example. I know from my own county of Donegal - and it is the same right across rural Ireland, including the west - that people are dependent on cars for transport. We do not have trains in Donegal or public transport networks like other regions. People need their cars to get to work, drop their children to school, take care of relatives and go to the shops. They need their cars to get from A to B. That is thanks to the legacy of bad transport planning by previous governments, which ignored the west. None the less, the Minister has increased motor tax and, in addition, fuel is going to go up. We also know that there is a proposal to examine VRT, resulting more motor taxes when the report comes back next year. Therefore, the driver of a mid-range car can expect a €46 increase in motor tax, and people are angry about it. People in County Donegal will ask whether they are expected to pay €46 more given the roads on which they are travelling, but they already pay €46 nearly every second week to have their shock absorbers fixed due to the potholes. Incidentally, these potholes will not be repaired because the Minister has cut €750 million from the capital budget.

The changes to capital acquisitions tax and capital gains tax do not go far enough. Yesterday, the Government attacked child benefit to save €70 million in a full year. When I heard about these cuts I was reminded that last year, Deputy Joan Burton told this house when Fianna Fáil cut child benefit that it was a reflection of how few women were in government and how little power women had. As she is now in government, the Minister for Social Protection, Deputy Burton, could have gone to her Cabinet and explained that an increase in capital gains tax to 40% would have raised €195 million. In addition, reducing all the capital acquisitions tax thresholds by 25%, while increasing the rate to 35%, would have raised €165 million. In today's Budget Statement, however, the Minister for Finance has allowed capital gains tax exemptions. If the Minister for Social Protection had been able to convince the Cabinet of the need for these measures, she would have saved the cut to child benefit. She could then have rightly declared that she, as a woman, had wielded considerable political power.

The Minister for Finance has failed to deal with the legacy of Fianna Fáil property reliefs which drove the bubble. He has extended a capital gains holiday for people who choose, once again. to speculate in the property market. He has cut stamp duty for non-residential property from 6% to 2% from midnight. His attitude to property should be compared with his attitude yesterday to young, severely disabled people, whom he told he valued half as much as the day before. He is the same as Fianna Fáil Ministers he condemned last year. He will protect high earners whom he fears will become insolvent, but he will go after the most vulnerable and tell them that he has no choice. He is trying to create speculation in the property market yet again but will not deal with upward-only rent reviews which are destroying businesses and killing jobs. Not dealing with upward-only rent reviews means the State will pay €10 million in rent. The State rents properties that are locked in to upward-only rent reviews totalling €58 million. As late as this morning, the Taoiseach told us that matter was under review. Did the Minister for Finance not give him a copy of his script before the Taoiseach took the Order of Business?

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