Robert Troy (Longford-Westmeath, Fianna Fail) | Oireachtas source

I welcome the opportunity to contribute to the debate on the Finance Bill. I will reply to a couple of Deputy Bernard Durkan's remarks. Thankfully, I do not go as far back as him, but he forgot to remind us of what happened in the 1982-87 period. I wonder why. He stated our debt would not be levelled on our children and grandchildren and, of course, presumed inflation would eat away at it. I hope he is right.

Two weeks ago we gave qualified support to the legislation. We were acting reasonably and responsibly. As in the debate on the fiscal treaty, we on this side of the House supported the legislation because we believed it to be in the best interests of the country.

Given the fiscal treaty and the establishment of the European Stability Mechanism, ESM, fund, I wish the Government well in its negotiations on the National Pensions Reserve Fund, NPRF, money used by the previous Government to recapitalise AIB and Bank of Ireland. I mean this, as success in the negotiations is in the national interest. They were originally due to be completed by June this year, but we have since learned that they will not.

The Finance Bill gives legislative effect to many aspects of budget 2013. It also gives us an opportunity to reflect on and debate the many choices made by the Government. In this context, I ask two questions: are the measures fair and equitable and are those who can afford to pay the most doing so? Unfortunately, the answer to both is no. Just as the ESRI described the 2012 budget, budget 2013 is regressive, as it hits those on the lowest incomes the hardest.

As regards auction politics and Opposition parties competing against one another, we do not need to look too far back - the 2011 general election - to find a time when one party in the current Government had such advertising slogans as "Protect child benefit: Vote Labour" and "No increase in VAT: Vote Labour".

On the other hand Fine Gael pledged not to increase income tax. Despite the promise not to tax employment we had the abolition of the PRSI tax free allowance and the scrapping of the €127 PRSI exemption for those earning more than €352 per week which will cost €254 per annum. Some might say that is not a lot, but it costs €254 per annum for a person earning €25,000 a year and it will also cost €254 per annum for a person earning €250,000 a year. Where is the fairness and equity in that? It is simply not there.

Another proposal in the Finance Bill relates to taxation on maternity benefit. That is an unfair attack on working women. They pay tax on the portion of their benefit paid by employers but by extending tax to the social welfare element of their pay it is an attack on working women. The taxation will also apply to adoption benefit. It is unfair and it is inequitable. I am sorry if the Government parties take offence from the Opposition pointing out exactly where the inequity and unfairness lies in the budget. There is an increase in health insurance at a time when thousands of people are not taking out private health insurance because they cannot afford it.

In conjunction with the Finance Bill we will have the introduction of a property tax. Government Deputies try to distance themselves from this morally unjust tax by saying it was the previous Government that negotiated it in the memorandum of understanding. The truth is that at the time the proposal put to the troika involved a suite of options including a site valuation tax – a different issue altogether. Instead of the economy and the ability of people to pay since then improving, the situation has become worse. If that is the only reason preventing the Government from seeking an alternative, why do the Taoiseach, Tánaiste and Minister for Finance with their great negotiating skills not renegotiate the deal and have the property tax removed? Everyone knows – Government backbenchers and people on the street - that the troika do not care how the targets are met once that happens.

The question was asked about the alternatives that were put forward. It has been said that the Opposition is against everything and for nothing. At the time of the previous budget, our finance spokesperson, Deputy Michael McGrath, produced a fully costed alternative but the Government did not accept it. The Minister of State, Deputy Alan Kelly, is shaking his head. One of our proposals, namely to increase the universal social charge by 3% for people earning more than €100,000 was proposed by the junior member of the coalition Government, but it was not accepted. We were led to believe that was the case. We are not privy to what goes on in government but we were led to believe from the leaks and spin in the newspapers that is what was proposed but it was not adopted. The Government said the reason it could not adopt the measure is because increases in universal social charge and income tax are taxes on employment. However, indirect taxes are okay. Who does the Government think will pay those taxes? They will be paid for out of income but if there is no income in one’s pocket, how could one pay tax?

There are no exemptions in the property tax for people who have already paid large amounts of stamp duty, despite the recommendation of such a measure in a report. People in negative equity are not recognised. There is no clause relating to inability to pay. It is totally and utterly unjust and unfair. That is not just being said by me; it has been said by many Government backbenchers on numerous occasions.

I wish to move to a point where there is an opportunity to create jobs. The best way to bridge the deficit is to get people back to work. A total of 430,000 are unemployed. Recent figures suggest that 90,000 young people emigrated to Canada, New Zealand and Australia in the past three years. I compliment the Government, IDA and Enterprise Ireland for the job they are doing in attracting foreign direct investment to this country. That is to be welcomed. However, a greater emphasis must be placed on small and medium sized enterprises in this country. I welcome the suite of proposals introduced in the budget to benefit them but those measures alone will not support small and medium sized enterprises. I was shocked and amazed to hear while listening on the monitor the Minister of State with responsibility for small business, Deputy Perry, say that the only thing needed to support small business is confidence. He is travelling the length and breadth of the country and he said that is all that is wrong. I wonder who he is meeting because week-in and week-out, all Deputies meet business people who cannot get access to credit. Of the €8 billion that was lent by the pillar banks last year only €2.5 billion was new credit, the rest was restructured.

If one walks down the high street in any provincial town one sees shops closing because once again the Government reneged on one of its key promises, namely, the abolition of upward-only rent reviews. The promise has been swept under the carpet. It could be done before the election but it cannot be done now. In the context of commercial rates the Valuation Acts are outdated and do not take into account a person’s ability to pay. That is something that could be examined. Commercial rates, upward-only rent reviews and the Valuation Acts are three key areas on which the Government should act in order to make a real difference. I am not just saying it for the sake of it. All we have to do is take a look at what has happened in recent weeks. B&Q and HMV were two large employers in this country which cited upward-only rent reviews and commercial rates as being among the reasons they are closing their doors. This is an opportunity the Government can control to ensure we support the retail sector, SMEs and get people off the live register and back to work because that is the easiest way to bridge the deficit. That is a better option because it would not inflict unfair, inequitable taxes and charges on the struggling middle class who simply cannot take anymore.

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