Pearse Doherty (Donegal South West, Sinn Fein) | Oireachtas source

In recent weeks, people across this State have been gripped by two emotions - hope and fear. They were hoping that the budget the Minister announced today would have made things better, that it would bring jobs and help rebuild our broken economy. They also hoped that it would improve the health and education systems, and that it would ease the burden they have been carrying since 2008.

They are also fearful, however, that the Minister would do what he did last year, that he will continue to repeat the mistakes of Fianna Fáil, and that he will continue to make ordinary people pay for the bad decisions of bankers and politicians.

People want this Government to succeed. Even those who voted against it and did not want it in office, want it to succeed. Like hundreds of thousands of ordinary people, I have shared their hope that this budget would be different, would break with the failures of the past, would chart a new course and would make things better. Today, however, the Minister has dashed all our hopes and has confirmed all our fears. Despite his best attempts to spin what has been announced today, one thing is crystal clear. If I had closed my eyes during either of the Government Ministers' speeches, I could have been listening to Brian Cowen, the late Brian Lenihan or anyone else from Fianna Fáil delivering the same speech. They proposed and implemented many of the decisions that have been announced today. Fine Gael and Labour have swallowed the failed economic policies of Fianna Fáil, hook, line and sinker, and are now implementing them with gusto.

As I listened to the Minister, I wondered if he was living in a different reality to the rest of us. His failure truly to grasp what ordinary people across this State are going through is shocking. I have met these people across the country in towns and villages. They tell me that they are living from week to week; they are finding it tough and are barely able to get by. They are the mothers who go without dinner so their children can eat. They are the fathers who stand in the dole queue, trying to keep some of their pride and wondering if they will be able to meet the bills that are coming in. They are the elderly who gave their lives and taxes to this State and are now living in poverty. Their help is being stripped away from them in every single budget, yet they still hold themselves with dignity.

I am embarrassed to stand in this Chamber, where we are so proud to have been elected to serve, and hear the Minister and the Government let these people down so badly. The Minister pretends that their suffering is not real. What has been delivered in this House today is a bill for the ordinary families of Ireland. It is a bill that picks up the tab for the failed policies of Labour, Fine Gael and Fianna Fáil – three parties that have caused, deepened and lengthened the recession.

In December 2010, Fine Gael and Labour stood on this side of the House and rightly lambasted Fianna Fáil for introducing its fourth consecutive austerity budget. When in opposition, Deputy Eamon Gilmore said Fianna Fáil had introduced cuts that broke new ground in political stupidity. He then crossed to the Government benches and did exactly the same thing, not once but twice.

The position is the Fine Gael-Labour Party Government has implemented €7 billion in taxes and cuts after riding into office on a wave of popular support to end austerity. So much for the brand new dawn or the democratic revolution for which people hoped and the Government promised. Few families have been untouched by this crisis, whether by emigration, unmanageable mortgages, bills they cannot meet or job losses. However, the Minister clearly thinks these families have more to give and so he has hit them with a family home tax, child benefit cuts, increased motor charges and hikes in the price of cigarettes and alcohol. As someone tweeted earlier while the Minister was on his feet, because of the Minister's work in the budget today it will now cost people more to get to work where they will be paid less to take back to the home in which it now costs more to live.

Tá an Nollaig buailte linn, agus i gceann cupla seachtaine beimid ag ceiliúradh na Nollag. Ar fud na tíre beidh cathaoireacha folmha ag tábla an dinnéir arís i mbliana. Nuair a tháinig an Rialtas isteach agus nuair a d'fhógair an tAire an buiséad deireanach, bhí 1,500 duine ag fágáil na tíre gach seachtain. I mbliana, agus é ag fógairt an dara bhuiséid, tá 1,600 duine ag fágáil na tíre. Tá siad ag fágáil na tíre agus ag cuardú post, poist a gheall an Rialtas go gcuirfí ar fáil; gealltanas eile briste.

The biggest cut the Minister has inflicted today is the cut in people’s expectations. It is clear he is removed from the suffering of the ordinary people. It is clear he does not understand what they are going through and what their lives are like. However, there is no forgiveness for not bothering to read or choosing to ignore the many reports that are put on his table explaining to him what such people are going through. A few months ago, the Irish League of Credit Unions published a survey that demonstrated clearly that 1.8 million people now are left with less than €100 of disposable income at the end of each month. It reported that half of all adults are struggling to pay their bills on time and that eight out of ten people are concerned about their ability to cope with increasing energy costs this winter. What has the Government done? It has cut child benefit, the back to school allowance and the household benefits package. Moreover, it has reduced the length of time for jobseeker's benefit, thereby once again punishing people for losing jobs and not being able to find others because the Government will not create them. It has reduced the redundancy rebate, which will affect employers and has increased the accident and emergency admission charge and the cost of prescription medicine. Medical cardholders will now be obliged to pay treble, that is, €1.50, for prescription charges and the Government has lowered the medical card threshold for the over-70s. It has cut the carer's respite grant and has increased the pupil-teacher ratio for small schools in a measure that will have a particular impact on rural areas. In addition, it has announced, albeit not today and not as part of the book, that later on, 100 Garda stations will be consolidated. The closure of Garda stations in rural areas will affect those communities in a terrible way. Moreover, the Government has increased third level fees. Not once, twice or thrice but four times has the Tánaiste, Deputy Gilmore, broken his pledge. How can he sit there on the Government benches? While it is fair that he does not wish to make eye contact, he has broken his pledge on this issue four times because the Government increased it last year, will increase it this year and intends to increase it by €250 for the next two years. Shame on Deputy Gilmore. However, the Labour Party is good at making pledges and then breaking them when in office.

There are parents who will feel the impact of the Minister's budget in the pit of their stomachs. I refer to parents who know their children intend to emigrate next year or who have been obliged to borrow to pay for Christmas or who will be despairing about how to feed or clothe their children on foot of the impact of the cuts to child benefit. Child benefit is the payment that is keeping many families just above the water line and for many working families, it is the only contribution they receive from the State. Many of them will take the blow quietly because so many feel utterly defeated. After shouting so loudly at the ballot boxes a mere 22 months ago, a quiet despair now has crept into and settled into homes across the State. The three members of the Government on the bench opposite are responsible for that despair. They no doubt will try to dismiss what I am saying here as mere Opposition rhetoric, just as the Government dismisses the many calls from external groups and organisations that represent the vulnerable and the struggling. The Government members will say there is no alternative but there is an alternative. While they may not have bothered to read Sinn Féin's alternative budget, it set out a full list of measures, encompassing €2.7 billion in additional taxes and more than €1 billion in savings, which would have allowed the Government to make a €3.5 billion deficit adjustment this year. As the Minister for Finance is aware, these detailed measures were costed through parliamentary questions to him and put on the public record in this House. I believe 45 of them were costed by the Department of Finance and one, which the Government refused to cost, was costed independently by Sinn Féin. The big difference between Sinn Féin's approach and that of the Government is we know the budget adjustment is necessary but can be made without hurting vulnerable low and middle-income families. I recall that Colm McCarthy once noted the Government had not run out of compassion, it had run out of money. I believe he was wrong, as the present Administration has run out of compassion, ideas and principles.

Today, the Government announced it will raise more than €1 billion through a family home tax, motor tax and excise duty increases. Its family home tax will be the straw that breaks the backs of many families. Moreover, the so-called mansion tax is nothing more than a gimmick. If I am struggling to feed my children or to keep the roof over my head, it does not matter to me that someone down the road is paying a bit extra if I cannot afford to pay it myself. This is what the Minister has failed to realise. He could have introduced a wealth tax that asked for a contribution from the very wealthiest in our society. I refer to a tax at 1% on net wealth over €1 million, which would be made up of all property. The Minister should outline how precisely he can claim to be broadening the tax base when he goes back repeatedly to the same people to pick their pockets for a few extra euro. It simply is not the case. He again is hurting the most vulnerable low and middle-income earners in society. He could have introduced a new PRSI rate for employers on income above €100,000. Instead he decided to abolish the PRSI weekly threshold of €127, meaning all workers in the State who earn more than €127 per week will be obliged to pay an additional €264 in tax per year. While the Minister has increased PRSI from the self-employed, what will they get for it? Many people who are self-employed and who worked in the construction trade and other trades have been left high and dry as they are unable to avail of social welfare benefits when they find themselves to be without employment.

The Minister for Finance and the Taoiseach have made much of the Government's pledge to protect people’s incomes. They claimed that under the present Government, people could be sure the wage packets they take home would be secure. Sinn Féin called on the Government to change that policy of protecting all tax earners but only to protect those earning under €100,000 per annum. Sinn Féin asked the Government to increase the tax rates for those earning more than €100,000 per annum. Sinn Féin also asked the Government to remove all those earning the minimum wage from the universal service charge, USC, tax net. People who earn less than €17,000 per year spend every cent in the local economy. Consequently, by taxing such people and failing to remove them from the USC, the Government has hurt both their quality of life and their local economy. Sinn Féin's proposal would have put €10 a week or more than €500 a year back in the pockets of 296,000 people. Instead, the Minister has gone after these people and has asked them to pay an additional €264 per year. The person with a salary of €200,000 will not feel the impact of €264 a year but the person earning €18,000 per year will feel it more than the Minister could ever imagine. This measure will bring in €289 million in a full year but a new 48% tax rate on income over €100,000 would have brought in €365 million. That is what would have been progressive.

The Minister could have called for changes to the tax treatment of private pensions. The changes to the private pension tax reliefs do not go far enough and do not even apply until 2014. It is clear the Government has been successfully lobbied by an industry and once again, the Labour Party has made a spectacular U-turn on its own policy.

We called on it to standardise pension and other tax reliefs because it has been revealed time and again that the top 20% of income earners avail of 80% of those reliefs. Instead, it allows people to continue to claim tax reliefs of up to 41% for private pensions.

What a short memory has the Labour Party and Deputy Gilmore. He was not long in here before his chant went from "Tax the wealthy" to "Tax everybody but the wealthy". Today, it was announced that even maternity benefit will be taxed, so the Government wants to tax children before they are even born. Shame on the Government, as this is only a couple of weeks after the children's referendum.

People in the middle have been asked to give again and again with nothing in return. We can consider how today's budget will affect two people, Micheál and Gráinne. They are lucky enough to each have a job paying just under the average industrial wage and they both need a car to get to work. They have four children and the eldest is in university. We can see how much they are being squeezed by being sent a bill of €1,759.

By applying PRSI to the first €127 of Micheál’s and Gráinne’s salary, the Government is charging them an extra €528 per year. On top of that, the family home is worth €200,000 and has a large mortgage, but it will now be taxed at €405. The child benefit they rely on to make ends meet will be slashed by €456 next year. The band C cars they drive will be taxed at an additional €120 per year. The eldest son in college will now have to pay an extra €250 in student contribution fees. Micheál and Gráinne, with their four kids, are being charged €1,759. If that family does not have the eldest in university but is in receipt of the back to school allowance, the bill would be €1,900. The Government should tell that family that the budget is fair and a measure of success.

One of the more cynical things done by the Government is trying to spin the notion that this budget is fair, and I am sure the backbenchers will be spinning this idea. It is not fair. The Government has claimed it is fair because it has implemented some measures affecting high earners. I welcome the fact the Government has introduced some of policies articulated by Sinn Féin over many years but the action does not go far enough. We welcome the increase in capital taxes, the higher universal social charge on pensions, PRSI being extended to other forms of income, the lowering of the capital acquisitions tax threshold and the increasing of the rates of capital acquisitions and capital gains tax. These are fair measures and I only wish the Government had implemented them before.

Some of these measures are blindingly obvious and we have advocated them for many years. I cannot see why they were not implemented previously but better late than never. The Taoiseach is smirking.

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