Michael Noonan (Limerick City, Fine Gael)

I thank the Deputies for their contribution. I will read the speaking note first, to give the official view, and will then comment on the case the Deputies make.

As Deputies will be aware, in every annual budget, the budget book includes tables demonstrating the effects of budget changes in respect of income tax, PRSI and the universal social charge, USC, on single, married - with and without children, PAYE and self-employed income earners over a wide distribution of income levels. The tables in the budget book also demonstrate the effect of changes to some payments from the Department of Social Protection, such as family income support and child benefit. Furthermore, every budget book contains a section which outlines the effect of budget changes on illustrative cases. These illustrative cases examine the effect of budget changes on various categories of income earners, including single, married, lone parents and elderly in a variety of different occupations and with varying income levels.

In budgets where there have been changes to income tax or PRSI, the budget book contains a poverty impact assessment based on the guidelines set out by the Office of Social Inclusion and using the ESRI SWITCH model. The poverty impact assessment is normally in Annex B of the budget book. I remind Deputies that, in line with the commitment in the programme for Government, there were no increases in income tax or PRSI in budget 2012.

In regard to changes to payments made by the Department of Social Protection in budget 2012, I am aware that the Department undertook an analysis of the distributive and poverty impact of the welfare measures on individuals and families in advance of Budget 2012. It is my understanding that this analysis will be published shortly.

As I am sure Deputies are aware, the ESRI usually publishes an analysis of the budget. Most recently it published a study on the distributional impact of tax, welfare and public pay policies from 2009 to 2012. Therefore, given the amount of analysis already available in this area and the information published annually in the budget book, I cannot accept this amendment as I believe it would duplicate the work already being undertaken on the various reports and publications I have mentioned. Deputy McGrath pointed out that even if one argues that the effects of this budget in its totality were regressive, the effects of the fiscal correction over the years since it commenced were highly progressive. There is no doubt that those most in a position to pay have paid - in drastic amounts. As the correction is part of the one programme it is unfair to pick any particular year and not take the programme in its totality.

Much has been made in debate, in particular in the media, about ESRI studies, especially those on VAT increases and how they impact on different levels of income. It is true that much of the comment centred on the 2% increase in the standard rate of VAT, from 21% to 23%. It is true to state, as the ESRI showed, this impacts more on low income families than on high income families. The reason was also pointed out in the ESRI report but that has been left out of the debate. It is, essentially, that low income families spend a greater proportion of their income on tobacco, alcohol and public transport than they do in other areas. Therefore, a combination of VAT and excise increases plus carbon tax increases will hit lower income families. That bit of the argument is left out when the issue is being debated yet that is what was in the original ESRI assessment on the impact of VAT. I believe people should be allowed to spend their money on alcohol, cigarettes or public transport if that is what they want to do but it weakens the case about a budget being regressive when it is those incidents of spending that are subject to the hardest impact.

My main point is that what Deputy Doherty seeks in his amendment is really unnecessary because most of this information is already provided in the documents which accompany the budget. The impact of the changes in social welfare will be in the document that will be published shortly by the Department of Social Protection. The ESRI is carrying out ongoing work in this area and all that information is made public and is available to Deputies.

As a consequence, I will not accept this amendment.

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