John Halligan (Waterford, Independent)

I am sharing time with Deputies Mattie McGrath, Joan Collins and Clare Daly.

This legislation is designed to have a long-term impact and it will take some time for it to have an effect. I welcome one of its provisions, the change regarding the research and development fund for companies and individuals. The first €100,000 in qualifying expenditure will be allowable on a volume basis. The measure could have a significant effect on SMEs. The measures to help struggling mortgage holders are timely.

Let me concentrate on the special assignee relief programme, SARP. I have listened very carefully to the Minister over recent days and to his reasoning for the programme. I accept that his giving tax breaks to foreign executives in the hope of stimulating the Irish economy is well intentioned. However, many of my constituents feel we are continuing to export trained, qualified young people at a rate of 100 per day while we are incentivising foreign executives to oversee us. The latter earn more pay and pay less tax.

I have grave misgivings about supporting a scheme that provides benefits to a sector that is more affluent than others. Figures released by the Department in recent days have shown the crippling effect of the austerity drive on low-income and middle-income earners, the so-called coping classes or working classes. The latter are shouldering a huge tax burden. Incredibly, people earning €1 million or €2 million paid 0.3% less tax last year. Those earning between €400,000 and €450,000 paid just 1.1% more tax, which is outrageous. As I understand it, SARP is an extension of a programme that already exists. If I am correct, the programme was introduced in 2008 and was extended in 2010. Before launching the current scheme, did the Department evaluate the results of the programmes from 2008 and 2010? If so, did they have any tangible or concrete effect on job creation?

The programme is an insult to low-income earners and does not guarantee the creation of a single job. In debates on various programmes during the week, the Minister was not able to say the scheme will guarantee jobs. We need evidence of how many jobs the scheme created in 2008 and 2010. I do not know why the Minister is not telling us; perhaps he will tell us tomorrow.

Notwithstanding its 279 pages, the Bill fails to get to the heart of the problem. There is little in it to encourage ordinary people to spend. While the crisis continues, the economy is going downstream interminably.

Recent figures from the ESRI savings index show that 48% of people are now saving money regularly, up 8% on the figure released in December. The reason people are saving is they are terrified of spending money. The ESRI figures show that 31% of people are not saving at all because, by the time their diminishing salaries have covered their mortgages, home heating, food, fuel, the universal social charge, the household charge, the VAT increase, the university registration fee and septic tank charge, they do not have any disposable income left. There was a decrease in grocery sales of 56% among low and middle-income families last year and a decrease of 64% in regard to clothing. How will this promote spending in an economy and make it grow? It is not possible.

The Bill makes provision to allow for the increases in the costs of petrol and diesel. If the increases are maintained, the average motorist will stand to be worse off by €1,000 per year. Since the emergency budget in late 2008, there have been five separate tax increases, including the increase in VAT, the introduction of the carbon tax and excise duty hikes. The result is a cumulative tax of 21%. This is hardly an incentive to go on a spending spree.

A reference was made to there being too much negativity. None of us wants to be negative but perhaps the Deputy should address his remarks to the 440,000 who are unemployed, the 260,000 children who are living in abject poverty and the 600,000 adults living in poverty. Does the Government want these people, totalling nearly 1 million, to jump up and down and say it is doing well? It is completely out of touch and that is the problem.

The Finance Bill's effects over the next few years will be disastrous for middle and low-income groups. The Bill will be particularly disastrous for the economy in that certain of its provisions will not encourage growth.

See this speech in context