Eamon Gilmore (Dún Laoghaire, Labour) | Oireachtas source

There have been difficult decisions but there have also been important achievements. Education has always been a core priority, and for a third year in a row we have protected the pupil-teacher ratio. This year there have been no cuts to the budgets for schools, and an additional 1,250 teachers will be recruited next year. When we came to office there was no money left to run the schools, but in the past three years the Minister for Education and Skills has facilitated the building of more than 2,700 classrooms. This year, the Minister for Communications, Energy and Natural Resources will deliver the final part of a three-year programme to ensure that every second level school has a 100 Mbps broadband connection.

In the area of taxation, too, the raising of additional revenues is being linked to reform. Rather than imposing taxes on work, this Government has been broadening the tax base and protecting working people by increasing capital taxes. Under this Government, the rate of capital gains tax and capital acquisitions tax has increased from 25% to 33% and DIRT has increased to 41%. Under this Government, taxes on unearned incomes have increased and tax reliefs have been closed off, and in this budget we are introducing a bank levy so that the banks that have for so long been a burden on the taxpayer will make a contribution to ease the pressure on households.

The budget documents contain the latest information from the Revenue Commissioners on the implementation of the so-called horizontal measure, which restricts the use of tax reliefs by high earners. That measure was introduced after a long campaign by the Labour Party, led by my colleague Deputy Joan Burton. The report for 2011 vindicates the argument, indicating that the horizontal measure is working, that effective tax rates have been increased and that the tax take from high earners has increased by more than 100%. Under this Government, reliefs have been restricted further through a charge on section 23 reliefs, by capping pension relief and by curtailing health insurance relief. At the same time, in our first budget more than 300,000 people were lifted out of the USC net. As a result, Ireland now has one of the most progressive tax systems in the developed world, with the top 1% of earners now paying 19% of all income tax, the top 5% paying 41% of all income tax, and those on the lowest incomes paying little or no tax at all.

There must be some limit on the hypocrisy that we can listen to in this House. We are treated to pious lectures from Fianna Fáil on the need to protect the vulnerable, but it was Fianna Fáil that cut headline social welfare rates three times; this Government has protected core social welfare rates in all budgets.

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