Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

I have heard that. However, I am unconvinced. I am not aware of the Minister's schedule or meetings in London. Perhaps he can tell me about them afterwards. Maybe he will convince me.

This is the second time in two weeks that we have dealt with critical legislation dealing with the finances of this State at a time when they are in the worst state they have ever been in the history of the State. To my mind, it is problematic that this should happen twice in two weeks into the early hours of the morning. I see a connection between what happened two weeks ago and what is provided for, or not, in this Bill. Two weeks ago the Government used a late night session of the Dáil to present as a great victory a Bill which was in reality simply a repackaging of the treasonous decision of the previous Government to pin €30 billion worth of the gambling debts of former Anglo Irish Bank to the backs of the citizens of this State. The Minister presented that repackaging as a great victory and implied that there was something in it for the citizens of this country and the economy when the real substance of what went on during that late night session was that the Minister confirmed the disastrous decision made by the previous Government, legally committing us to paying every cent of those gambling debts and guaranteeing we are facing into long-term economic stagnation.

The quid pro quo of making that commitment is that the Government now has no room to manoeuvre. That is the point I am making. The reason there is nothing in this Finance Bill that will make any substantial difference is because the Minister has given away all of our room to manoeuvre. What he should and could have done, much as he protests it is impossible and so on to do so, was said that these are not our debts, that our economy cannot afford to take them on if it is to have any hope of economic recovery and if he, as Minister for Finance, is to have any room to manoeuvre to propose measures that could help stimulate the economy and economic growth, and that we will not pay them. To put it simply, because of the guarantees given, this Bill can offer us nothing.

Furthermore, as if committing to paying off Anglo's debts was not bad enough, it has emerged during the past two weeks that even the short-term savings, about which the Minister was crowing two weeks ago we would get in 2014 and 2015, cannot be translated into any measures which make any substantial difference to the citizens of this State. It is somewhat debatable if these short-term savings even exist. It is clear that even if they do, and if the Minister's arithmetic is correct, they cannot be translated into any reversal of proposals to introduce a home tax, water tax or previous austerity measures such as the universal social charge imposed on low and middle income families, all of which not only ensure people suffer but are utterly destructive in terms of the domestic economy and its capacity to recover. The Government claims that none of these savings can be used for public investment programmes or to prevent the troika demanded sale of State assets, which to my mind are sales which move us precisely in the opposite direction to that we need to go if we are to have any chance of economic recovery.

I would like to comment on the sale of Irish Life. I do so not for the sake of it but because I believe somebody needs to puncture the consensus. I cannot believe the Government is congratulating itself, that Fianna Fáil is congratulating it and that, more astonishingly, Sinn Féin is giving a cautious welcome to the sale of Irish Life. It beggars belief. We propose to hold on to all of the institutions that are broke, insolvent and have bad debts and to sell off a State asset that is profitable, resulting in the loss of a couple of hundred jobs, it being asset stripped and all of the profits derived therefrom going to somebody else. How on earth is this a good deal for us? I do not get it. Private financial institutions committed not to the interests of this State or its citizens but to profit caused the financial crisis. The Government now proposes to privatise a profitable financial institution owned by the State. It is beyond belief.

The Minister's comments that this package is part of a general situation about which we should be optimistic and that things are slowly moving in the right direction are utterly unconvincing. The reality is that the key decision made by the Minister ensures there can be no development or growth in the domestic economy and no improvement in employment. What we are left with is a few gestures, which I welcome, which are marginally progressive but almost meaningless in terms of what they will gather for the Exchequer.

These include increasing the level of universal social charge on people over 70 who earn more than €60,000 a year and increasing the level of the universal social charge on self-employed pensioners with more than €100,000 a year. This is progressive, but so small as to be utterly insignificant.

I do not agree with tax incentives because they are focused on the same premise which caused the crisis in the first place. This premise is that we need to incentivise parts of the private sector to deliver the investment and growth the State itself is not willing to provide. Even here, the measures are marginal. They are small tweaks in the research and development credit, the foreign earnings deduction and the living city initiative which, frankly, is a bit bizarre and the Minister will have to explain this one. Why should people with Georgian houses get a particular tax break? I live in Dún Laoghaire but I do not see its logic. The Bill also includes tax breaks for the aviation industry. Aside from the specifics of these measures, the problem is they are part of the same failed approach whereby in so far as we can do anything, it is about incentivising the private sector.

These are small tweaks and extensions to the much more fundamental policy, which the Minister has refused to examine, of stating we must keep tax on the corporate sector low. This means if we must levy taxes they must be levied on low and middle income workers. The most important dimension of this comprises the universal social charge, which is destroying people, the household charge and water charges. Whatever we do we must not look at corporate tax and think about increasing it or even forcing the corporate sector to pay the 12.5% it is supposed to pay. This is what the Bill should be examining and what we should be discussing. We need serious interrogation on this and we will deal with it on Committee Stage.

The sacred cow that low corporate taxation was the key to our economic success could possibly stand up during the period of the Celtic tiger, but four years after the collapse of the Celtic tiger can we really say this sacred cow should not be questioned? The Minister's red-line protection of low corporate tax rates has delivered nothing in the past four years in terms of economic growth or employment. The Minister claims a marginal increase in the export sector, but this is at the expense of the domestic economy. There has been no net increase in employment. This is not a vista of hope for anybody. I propose the Minister examines whether we should do things the other way around and that we have a serious debate on this. The universal social charge should be removed from people earning less than €60,000 a year, which would cost approximately €2.5 billion, and taxes on the corporate sector and those earning more than €100,000 a year should be increased by €2.5 billion. This would be a combination of higher income taxes and increasing the effective tax rate paid by corporations. This would do more to stimulate the domestic economy by creating demand on the high street and by providing us with funds for a public investment programme which could stimulate growth.

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