Pearse Doherty (Donegal South West, Sinn Fein)

I would like to pick up on what Deputy McGrath has just said about allowing people to access their pension pots. I know it is a controversial issue. People who want to pay off loans or are in negative equity have already contributed to the recapitalisation of the banks. The banks should be writing down the loans that such people have, particularly if they are in serious negative equity or are not in a position to make loan repayments. I note, in the context of what Deputy McGrath said about the lobbying of the Minister, that the Bill before the House contains a provision that will allow individuals to tap into their private mortgages or private pension pots.

However, they may only do so in accordance with strict criteria and the measure is designed for those employed in the public sector who have a pension pot which will have a final value in excess of €2.3 million. The purpose of this is to avoid the excessive surcharge. I am interested in learning, perhaps on Committee Stage, who lobbied the Minister on this matter and the reason for their success in having this provision written into the Finance Bill. I can guess which section of the public lobbied the Minister, namely, individuals who, on the basis of the estimated pension value of €2.3 million, would have an annual pension in excess of €100,000. I hope the Minister will elucidate the House on the matter and Deputies will not be compelled to go through freedom of information challenges to elicit the information we seek.

In two weeks, Fine Gael and the Labour Party will have been in government for a full year. The past year will be remembered as a year of missed opportunities and broken promises. After all the promises of the election campaign, which was in full flow this time last year, and all the detailed commitments outlined in the programme for Government, the first 12 months of this coalition will be remembered not for what it achieved but for how badly it disappointed. Possibly the greatest disappointment, one felt by hundreds of thousands of people, is how little different this Government is from its predecessors. Despite all the promises of change and the lofty rhetoric of a democratic revolution, the hallmark of Fine Gael and the Labour Party's first year in office is continuity with the past.

Where the Fianna Fáil Party cut, this Fine Gael and Labour Party Government cut deeper. Where the Fianna Fáil Party wasted billions of euro of taxpayers' money on bailing out toxic private banks, this Fine Gael and Labour Party Government threw good money after bad, to the tune of €21.3 billion in the past 12 months. Where the Fianna Fáil Party buckled under the pressure of the European Central Bank and combined weight of France and Germany, this Fine Gael and Labour Party Government buckled quicker. Where the Fianna Fáil Party provided well paid jobs for the boys and excessive allowances for themselves, Fine Gael and the Labour Party have followed suit, breaching their own pay cap rules on ministerial advisers and awarding junior Ministers additional allowances.

Twelve months on and where are we? Unemployment remains at historical highs, with 439,600 on the live register at the end of January. Every month, 6,000 people are leaving our shores in search of work. More than 100,000 families are in serious mortgage distress and poverty and inequality have increased to levels not seen in decades. Our schools and hospitals are in crisis and our community services are under daily attack. One could not fault someone for asking whether a general election really took place this time last year, Fianna Fáil really left office or anything has actually changed. Judging by the detail of the Finance Bill before us, the answer to these questions is a categorical "No".

Some of the measures contained in the Bill are to be welcomed, including increases in capital gains tax and acquisitions tax and the removal of 300,000 from the universal social charge net. These are outcomes which Sinn Féin campaigned long and hard to achieve. However, the question must be asked as to why the Government did not go further with these proposals. As I stated previously, this is a Bill of which Charlie McCreevy would be proud. It rewards the rich and punishes the vast majority of low and middle income earners. On the one hand, it heaps extra charges and taxes on families already unable to cope with the financial pressure of rising debt and falling incomes while, on the other, it rewards high earners from overseas with generous tax breaks without any requirement to create a single job.

This is a bad Bill which seeks to enact in law the bad decisions announced in last December's budget. It will make life harder for the great majority of people and drive the domestic economy further into recession. It will do little or nothing to create jobs or fuel domestic demand and will damage families and society for years to come. As in the old days under Bertie Ahern and Brian Cowen, this is a Finance Bill for two Irelands. There is an Ireland inhabited by the unemployed, under-employed, working poor and struggling low and middle income earners which is asking what is in the Finance Bill for them. The Minister's failure to abolish the universal social charge has left more than 200,000 low paid, working poor families in the income tax net. Some of these workers earn little more than €193 per week, yet the Government, like its predecessors, believes it is better to tax them rather than high earners. The hike in VAT is as damaging to the well-being of low income families as it is to the hundreds of thousands of small and medium sized businesses which rely on the spending power of the majority to stay in business.

Today the Central Statistics Office released the findings of its quarterly national household survey pilot module, the details of which make for sobering reading. It found that more than half of households have cut back their spending on groceries, almost two thirds of households have cut back on clothing and footwear and one fifth of households have delayed or missed paying bills to meet payments on basic goods and services. What is the response of the Government? It is to increase VAT, which will further reduce the disposable income of these struggling families. At a time when retail sales continue to decline and domestic demand remains in recession, the Government's commitment to this decision defies not only logic but any sense of social justice. The list continues. The increase in carbon tax charges is pushing low income families further into fuel poverty, while reductions in tax credits for third level fees make it more expensive for parents to send their children to university.

One of the worst legacies of the final years of the previous Fianna Fáil led Government has been the grossly unfair impact of tax increases, as demonstrated by figures released recently by the Revenue Commissioners. What have Fine Gael and the Labour Party done to redress this imbalance? Have they used the opportunity of the Finance Bill to address this inequity? Not only have they left this grossly unequal tax regime in place, they have made it worse by heaping extra charges and stealth taxes on those already overburdened by the bad decisions of the previous Government.

Let us take a comparison of the position in 2010 and the position in 2011. A family earning between €17,000 and €20,000 per annum saw its tax bill shoot up by 215% in 2011, an extra €205 per annum in lost income. A family earning between €20,000 and €30,000 per annum saw its tax burden increase by 36% or an extra €263 per annum in lost income. A family earning between €30,000 and €40,000 per annum saw its tax burden increase by 23% or an additional €1,000 per annum in lost income. When one compares these stark facts with the manner in which the previous Government treated the very wealthy - through measures the current Government has chosen to leave in place - one finds that in 2011 a family earning more than €100,000 per annum saw its tax bill increase by a mere 6.3%, while a family earning more than €400,000 saw its tax bill increase by a mere 1.1%. Worse, a family on an annual income of more than €2 million saw its tax bill decrease by 0.3%, leaving it a staggering €10,000 per annum better off as a result of Fianna Fáil's final budget.

This trend will continue into 2012 and beyond because of the failure of Fine Gael and the Labour Party to undo the damage done by their predecessors. Like Fianna Fáil before them, Fine Gael and the Labour Party are content to run an economy that rewards the super wealthy and punishes low and middle income families. Perhaps the Minister is hoping that we on the Opposition benches have short memories and will not remember what he said in January last year when the Fianna Fáil Party in government introduced its final Finance Bill. In criticising his predecessor the Minister, who was the Opposition spokesperson on finance, stated the Finance Bill would "have a severe impact on the most vulnerable in society." He added that if he were in government, each measure proposed would be "examined and politically, socially and economically proofed so that the social consequences of each proposal are known and we do not enter blindly into proposals that would hurt many vulnerable people." Has the Minister proofed each of the proposals contained in his Finance Bill?

Does he know the social consequences of the measures outlined above, particularly for those struggling every day just to put food on the table or clothes on their children's backs, or to cover their rent or mortgage bill at the end of the month? If the Minister has done what he stated he would do this time last year, he has an obligation to share that analysis with us in this House during the course of this debate as part of his efforts to justify the measures contained in this Bill.

What of the Minister's coalition partners, the Labour Party? What did Deputy Burton have to say in January 2011 about the previous Finance Bill? Then finance spokesperson, the Minister for Social Protection, Deputy Burton, stated that "the swathe of new taxes and extra burdens on families that run through this Finance Bill leaves a very sour taste in the mouth". She went on to state: "the people rightly feel in their bones that all the revenue they raise will add nothing of value to the State but disappear into the black hole created by the banking bailout and the payments of the Fitzpatrick-Fingleton and NAMA debts". The swathe of new taxes and extra burdens on families introduced by her Government this year will raise €1 billion in taxes in 2012, and yet in the same year the Government plans to give €3.1 billion to Mr. Seánie FitzPatrick's Anglo Irish Bank while presiding over NAMA, which is costing the taxpayers €1 million every day. Would people be wrong to feel once again in their bones that this extra revenue will disappear into the black hole that is the Anglo Irish Bank?

Deputy Burton also used her Finance Bill speech last year to make the case for progressive taxation, stating that "everyone should pay their fair share", and criticised Fianna Fáil's proposals for containing "the distortions that diminish progressive taxation and even exacerbate some of them further", and yet a mere 12 months later, here she is supporting a budget that heaps extra taxes on struggling low and middle-income families while reducing the tax burden on the super-rich.

It gets worse. The most outrageous proposal in this Finance Bill is the special assignee relief programme. It allows companies to bring in highly paid individuals from outside the State and have those individuals' tax liability on earnings between €75,000 and €500,000 written off by 30%. This is the equivalent of approximately €127,500 tax free for the high earners of this bracket. Over the five years of the period this benefit is allowed, an individual could earn up to €635,000 tax free. What have we learned from the past? We learned that when Fianna Fáil was faced with a problem in the economy, its instinctive reaction was to cobble together a tax break - we all know the mess that we ended up with as a result - and yet the Fine Gael and Labour coalition is concocting the same madcap schemes offering tax incentives to high earners from other states to come work in this country to receive massive tax breaks without any guarantee that a single job will be created in return. When I raised this last week, the Minister urged me to read the Bill. In spinning with the media, he stated that this was research and development and job creation focused, that I had not read the Bill, and that I should read it again. I had read the Bill and I have re-read it a number of times. It is clear there is no requirement to produce a single job on those who will avail of this tax break. Worse than this, as has been mentioned, companies could abuse this tax break in seeking to downsize their Irish operations which would result in job losses. The Minister needs to be honest with the public. This is not, as Deputy Burton said to me when I questioned her in the House last Thursday last, about each such individual who avails of this being required to create 30 jobs. There is no such requirement in the legislation. Perhaps in some ministerial fantasy that is what we would like to see, and I would support that if it were to happen, but that is not what is in legislation.

What did the Government base this tax break on? Fianna Fáil, in welcoming this tax break, would like it tweaked and cited that other countries have such tax breaks. They cited Spain, for example, which has this tax break. It is called the Beckham rule, named after Mr. David Beckham. Of the 500 persons who availed of the tax break in Spain, 340 of them are professional footballers. They are hardly renowned for their job creating skills in that country and that is why Spain has brought in legislation to change the rule.

It is an abuse of and an affront to those who are struggling to pay a raft of new taxes that we are addressing a measure that will allow an individual who comes to this country to earn €635,000 tax free over a five-year period. It is unbelievable that the Minister got away with introducing such a measure, given that the Labour Party, has, or at least had, some social conscience.

The Finance Bill also includes various proposals demanded by the property investment lobbies such as a reduction in stamp duty for commercial property transactions and exemptions from stamp duty for property transfers between offshore investors.

Then there is the proposal to impose a 5% levy on income sheltered by property reliefs. Last year, during the Finance Bill debate, Deputy Burton criticised the Government for succumbing to the pressure from the developers' lobby and kicking the property tax reliefs issue down the road for another year. This year, now that Labour is in Government, are we seeing the end to these symbols of all that was wrong with Fianna Fáil's approach to economic policy? Unfortunately, the Labour Party is not honouring its election manifesto pledge to:

[P]rioritise the elimination of unnecessary tax expenditures, as we have been proposing for many years ... [including] the legacy property reliefs[.]

Once again, Fine Gael has got its way. The reliefs remain and will be subject to a mere 5% tax, and only on incomes of more than €100,000 per year. This means that an individual with an income of €90,000 per year-----

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