John Browne (Wexford, Fianna Fail) | Oireachtas source

I welcome the opportunity to speak. To many people, the Finance Bill seems unfair. It provides no clear vision and no sustainable solutions to the major challenges that Ireland faces into the future. There are a number of changes included in the budget that will have a significant effect on people's lives, including the increase in DIRT tax, the reduction of the tax credit on medical insurance and the abolition of the single-parent tax credit. People who saved either by putting money aside for their pension or on deposit in a bank are being hit by these punitive taxes. While I welcome a certain number of measures which are designed to help the construction sector, there is a complete lack of action on the spiralling mortgage crisis.

The Minister talked about the €500 million jobs package and, certainly, some of the measures in the jobs package are very welcome. However, we are now in a situation where there is a two-tier Ireland. Dublin seems to be moving on and expanding, with a lot of good news in the Dublin area. However, in rural Ireland there are major issues in small towns that are dying on their feet, with retailers under pressure and small businesspeople unable to get funding, while the banks treat them as second class citizens. Not alone are the banks not giving money to develop or expand, they are actually withdrawing or reducing overdrafts. I have come across many people in my own constituency who have had their overdrafts substantially reduced by the banks, which is making it very difficult for businesses to survive.

This is an area that needs serious reflection. It is important to recognise that small businesspeople and retailers provide huge numbers of jobs up and down the country, but, certainly in the smaller towns, there is a major difficulty at present. As I said, retailers are under pressure, they are letting go employees and closing down their shops. If one walks the streets in any of our urban centres at present, one will find anything up to 15 or 20 shops closed down, with the subsequent loss of jobs.

The extension of the pension levy into 2015 is an about-turn by the Government given it had said it would end this year. The levy is taking €2.25 billion from pension funds, many of which are already in deficit. It is important to ensure that the pension system is secure, fair and straightforward. Given the manner in which benefits for the elderly have been systematically eroded by the Government, there has never been a greater need for such a safety net. The Minister for Finance claimed that extending the levy would make provision for potential State liabilities which may emerge for pre-existing or future pension fund difficulties. This underlines the unfairness of the levy as it will also hit defined contribution pension schemes even though they cannot benefit.

The medical insurance tax relief is an area the Minister for Finance should revisit. The Government said this change would affect gold-plated policies but we are all aware that it will impact on approximately 90% of all private health insurance products currently on the market. Customers will end up paying more for their health insurance but more important, and of greater concern, is the fact many people are now being driven out of the private health insurance market despite the Government's stated intention of creating a system of universal health insurance. While we do not know when that will happen, as the Minister is aware, many people are leaving the private health insurance market at present because they just cannot afford to pay. This will add to the burden on hospitals in the public sector, which, as we know, are already overburdened, with people waiting a long time for assessments and operations. To have an extra burden placed on them through people leaving the private health market and going into the public system will only add to the problem.

Of all the issues in the budget, the change to the one-parent tax credit is the one that has caused a major storm. I have had a huge number of representations from people affected by this change. The manner of the change will discriminate against fathers in particular because the new single-parent tax credit will only be available to the recipient of child benefit. I welcome the fact the Minister for Finance said in his opening speech he would revisit the situation. I received a letter from a constituent which I have sent on to the Minister. It asks a number of questions, and states:

Before the credit can be split, it must first be designated. To whom would the Minister propose to designate it? If it goes in the first instance to the primary carer, then we are firmly looking at indirect gender discrimination and I trust that the State would not willingly enact such a measure.

A lot of concern is being expressed about this change. As I said, I welcome the fact the Minister will re-look at this because it seems to cause major problems. Fathers in particular have been writing to me on a large scale to express serious concern. I hope the Minister will see fit to change this because it will be discriminatory and will drive people on lower incomes into further poverty. It is generally accepted from the pundits out in the real world that the proposal will hit very hard on separated and divorced fathers in particular.

The retention of the 9% VAT rate is welcome. The restaurant owners and hoteliers certainly did a good job of lobbying and they were successful. We hear that up to 10,000 jobs have been created in this area. If it is so successful in creating such a significant number of jobs, why not expand it into other areas?

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