Seán Kyne (Galway West, Fine Gael) | Oireachtas source

In February 2011, the Government - Fine Gael and Labour - received a mandate from the people to regain our economic sovereignty, restore our economy, jobs and investment, and put our country back on the right, sustainable, compassionate path. Budget 2013, although undoubtedly difficult, is part of the process. The Government faces the most challenging task it could face: to rebuild our economy on solid foundations of jobs, enterprise, exports and innovation rather than the old, shaky foundations of property speculation and financial trickery.

We are a long way from the days of Charlie McCreevy’s giveaway budgets when populist but short-sighted measures were compounded by the squandering of public money, which often found its way to those in society who least needed it. Unfortunately, every decision in budget 2013 has been drawn up in one context, the reality that must be clear to everyone inside and outside the House. The painful reality is that the country is spending close to €17 billion more each year than we raise through taxes and revenue. This is not sustainable and cannot continue.

Some in society would prefer deep cuts in social welfare and other spending areas while others prefer higher taxes or levies. The challenge we face is to listen to the different interests and to reach a compromise rooted, first and foremost, in fairness. Despite the denials, our tax system is the most progressive in Europe, a fact espoused by the OECD, the ESRI and the European Commission. Those most able to pay taxes and charges in Ireland do so and budget 2013 continues this. For example, capital gains tax, capital acquisition tax and DIRT have all been increased by 3% following last year’s increases. Tax relief on pension contributions has been significantly reduced and capped, and PRSI and the tax base have been broadened with unearned income now subject to tax. However, despite these new measures, the primary weekly rates of the many social welfare benefits and schemes have been protected. I believe in the safety net social welfare provides as it is a system on which all citizens will depend at some point in their lives.

The confirmation of no income tax increases, no reduction in tax credits and no changes to tax bands as well as no VAT increases is welcome news to workers grappling with the effects of the recession. To help as many citizens as possible reduce their need for social welfare, a Government must support job creation and small to medium-sized enterprises. Budget 2013 achieves this with the ten-point tax plan for SMEs to help reduce administration costs, to protect and increase cashflow and to assist Irish SMEs compete on the global stage. Competing abroad requires efficient transport systems, and the rebate on diesel for our hauliers will help achieve this. The positive support the tourism industry has received will continue with the retention of the lower rate of VAT introduced in the stimulus plan of 2011.

Repairing the damage takes time but it also requires reform in order that we learn from the mistakes of the past. The Government has begun fundamental reform in the delivery of public services to safeguard essential services while maximising value for public money. Public representatives, Deputies and Senators cannot be, and are not, immune from reform. Budget 2013 is the first in many years to specifically cut public representation expenses, abolish ministerial severance payments and inject much needed transparency by abolishing entirely the system of unvouched expenses.

This budget is unquestionably a difficult one. However, there was not a credible, workable alternative put forward by any Opposition group in Dáil Éireann. The fact that no Opposition group sought the assistance of the Department of Finance for costing and estimating proposals is proof of this. Budget 2013 will be difficult for all as we try to maintain public services while closing the gap between State income and spending. We are on the correct path and about 85% of the measures needed to restore sustainability and economic confidence have been put in place. To succeed, everyone – young and old, public sector and private sector, urban and rural-based - must work together. The future of the country depends on it.

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