Peadar Tóibín (Meath West, Sinn Fein) | Oireachtas source

With the agreement of the House, I will share my time with Deputy Martin Ferris.

Any Deputy who tells the House we have no choices is telling a lie. Anyone who studied economics knows that the world of economics is replete with theories and mechanisms to manage an economy and with levers to pull to stimulate different parts of the economy. It is a lie to say to the Irish people that there are no choices. It is important to state those facts so baldly. There are different routes to achieving Irish economic regrowth. The Government has chosen an extremely regressive route of retraction which is based on Margaret Thatcher's economic theories. We are all aware of the context of the Bill. The domestic economy is hammered as a direct result of the calamitous mismanagement of Fianna Fáil, but in a democracy, by definition, there are always choices.

The Finance Bill 2013, as part of the budget process, is an example of the type of socioeconomic choice the Government has made. There are a number of routes back to growth, balanced budgets and a sustainable debt-to-GDP ratio. The route to which Sinn Féin subscribes is one where commercial debt is dealt with on a commercial basis. It is not the perverse Fianna Fáil-Fine Gael-Labour policy that private debt is paid for by people with disabilities through cuts in respite grants, by poor families through cuts in child benefit, by pensioners through cuts in fuel allowances and by targeting maternity leave. They are all the choices the Deputies on the Government side of the House have made.

The route to sustainability to which Sinn Féin subscribes is through fiscal responsibility, ensuring those who can pay do so and not through the fiscal irresponsibility of the Government which has re-nationalised the Fianna Fáil golden circle of debt. The route to growth to which Sinn Féin subscribes involves the reduction of cost to business through the reform of upward-only rents which the Minister refuses to acknowledge is the source of many job losses in the retail economy. It also involves reform of the rates system and the introduction of progressive rates. Growth through the refocusing of funds from the National Pensions Reserve Fund, the European Investment Bank and the private pension industry would build badly needed infrastructure now, put people back to work now and create efficiencies and competitiveness the country could enjoy into the future.

These are the choices Sinn Féin would make. They are not unique to Sinn Féin. If Government Ministers would only open their eyes they would see that many governments throughout Europe and the rest of the world are currently carrying out these policies to great success. Such choices would, of course, demand strong leadership and, unfortunately, we have no leadership in the Government. We have a Government that bends to the vested interests of Europe and the various lobby groups in Irish society.

To date, the economic management choices of the Government have led to continuous high unemployment and a disgustingly high level of emigration. One of the major costs of the Government's economic plans is the shocking figure of 167,000 people who have left the State since it came to office. They face no chance of a job, collapsed living standards, higher and unfair taxes and increased costs. Many of those individuals left through no choice of their own. What is left behind is 350,000 out of work, 60% of whom are long-term unemployed.

These figures would have embarrassed the Governments of the 1980s. In some way, the Government tries to spin them as progress. We are told the programme for Government is being implemented and we are meeting the criteria of the troika. These figures represent failure by any economic measurement. When Sinn Féin met the troika I asked if the policies they were espousing - unemployment, reduced living standards and emigration - were not economic failures. They acknowledged that while the debt collector was being paid, they could not stand over these economic indicators as in any way positive. We have seen major increases in poverty levels, child poverty levels and mortgage distress. The domestic economy continues to shrink, creating a cycle of economic retraction.

While the export sector is performing better, there are a number of structural problems in this area. Pharmaceutical patents are running out, exports to the United States fell in the last year and our major export markets, Britain and the rest of the EU, are falling in and out of recession.

From the point of view of jobs, enterprise and innovation, I welcome a number of the initiatives in the Finance Bill. Qualifying group expenditure on research and development will increase from €100,000 to €200,000. Investment in research and development is investment in jobs and innovation. The Bill contains other job creation initiatives. When our party was briefed by the Department of Finance, however, I was surprised by how little evidence these policies are based on. It seems that unseen lobbyists are having policies introduced that are not evidence based.

Tax credits for key employees engaged in research and development will be reduced from 75% of the time engaged in research to 50%. We asked why this was the case and what were the projected improvements to the system, the projected costs to the State and the likelihood of increased investment in research and development. The Department of Finance did not know the answers to any of those questions. The same is true of section 9, which seeks to include additional countries in lists for which companies can claim tax deductions on employee pay. Again, the staff of the Department of Finance could not give us figures for how this was already working for the countries that are included and had no projections based on fact for what was expected to be achieved from the other countries that were included in the lists.

These may be good initiatives. It may that, through luck, they will offer improvements and growth within the market, but this is not evidence-based policy. The least that could be expected from the Minister is that there would be cost-benefit analysis of schemes that are focused on job creation and measurement of jobs created, jobs retained and jobs displaced. That is not the foundation on which these initiatives were created. A number of other tax concessions are clearly lobby based rather than evidence based. From now on the Minister should provide full assessments of the cost of schemes. The airplane leasing industry enjoys considerable tax breaks. We have not been able to find out the cost-benefit of these to the economy. The incentive to Georgian homes in the Minister's constituency of Limerick seems like stroke politics. I respect the need to maintain inner city streetscapes, but when one gives money to the owner of a Georgian house in a city, one takes it away from someone else. There is an opportunity cost there, and we need to know the opportunity cost of that initiative.

The initiatives in the Bill cannot mask the fact that the medicine, Government policies, is killing the patient. The Bill will place further pressure on those on benefit and the working poor. It disproportionately hurts lower and middle income households. Excluded from the Bill is a wealth tax. The Minister for Finance said a wealth tax would likely bring in €500 million. In direct contrast to the wealth tax, the Government has introduced a family home tax with no regard for stamp duty, negative equity, unemployment or ability to pay.

Instead of reform of upward only rents, we have incentives for landlords. A number of weeks ago, The Sunday Business Post reported that landlords lobbied Fine Gael to stop it from reforming the upward only rent system. Once again, the budget provided more goodies for landlords, goodies that could re-inflate the property bubble.

This budget will suck money from the economy; it will remove €3.5 billion. It is a retracting budget by its very nature. The Minister will claim to have limited room to manoeuvre, which is often the response from Fine Gael or Labour Party Deputies, but they say this simply to close down debate because there are other ways economically and democratically.

The Government has chosen to tax families rather than tax the most wealthy. It has chosen to cut benefits while giving tax breaks for Georgian home owners. It has incentivised property developers and failed to act for tenants with upward only rents. It has failed to burn the bondholder and has instead burned the Irish citizen. This budget fails the test of fairness and it fails the test of promoting economic growth and jobs.

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