Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

The Minister of State will be glad to hear that I will do my best to prosecute the Government in a fair and transparent manner. As an Opposition Deputy, I believe in acknowledging where genuine progress has been made. The Government will hold up the exit from the troika programme as an achievement. In implementing the programme for several years, it certainly helped the markets to gain further confidence in Ireland. I submit that the actions of the new President of the ECB, Mario Draghi, in respect of the OMT initiative, were also highly influential in bringing down the cost of borrowing. The Government should take credit for fulfilling a programme that it inherited to allow the country to exit on time and in the manner originally envisaged.

The second major campaign for the Government is on the jobs front. The Minister of State spoke about the progress made in job creation. I warmly welcome the significant increase of 60,000 in the number of people at work over a 12 month period. I leave it to independent commentators and those who are creating the jobs to comment on whether they are the direct result of Government policy, part of the economic cycle or in spite of Government policy. I was delighted to hear the announcement today that a further 150 jobs were to be created in Cork. All of us want to see people return to work because unemployment remains far too high. In addition to the 400,000 on the live register, more than 80,000 people are participating in various activation programmes and cannot be regarded as fully employed. Thousands of people who were formerly self-employed have failed means tests and as a result, are not recorded by the State as being out of work. Tens of thousands have left our shores for economic reasons. I hope many of them will have opportunities to return to the country to rebuild their lives here. It is a shame that we have lost so many young people, albeit I hope for only a short period. Their loss is felt in communities around the country, particularly in rural communities for which they are the lifeblood of community groups and sports clubs. The Government could be doing better on the main measures of employment. There is a lack of action on issues that affect businesses, SMEs in particular, such as local authority rates, climbing rents, spiralling energy costs, red tape and the lack of credit. The Government needs to do more work on all of these issues because they are barriers to employment.

For several weeks the Government has suggested income tax will be reduced as early as the next budget. The inescapable conclusion from recent announcements and the debate in the last two days is that the Government is firmly in election mode, with an initial focus on the European and local elections on 23 May and an eye on the next general election. What makes me cynical about the promise to reduce income tax is not the substance of the proposal because we all would welcome any reduction in the income tax burden, particularly on young families, but the fact that the Taoiseach made the promise before the decision to take €2,500 out of the pockets of single parents by way of an income tax hike had taken effect. Nobody in this House can predict with certainty whether the State will have the financial capacity to deliver on that promise in October. There will be a further adjustment of €2 billion in the next budget, but this carrot was being dangled before the measures announced last October had even taken effect.

The Government claims that it has not increased income tax rates. It has largely but not entirely honoured its promise in respect of income tax bands, credits and rates; however, it has increased the tax take in a sneaky way by implementing 13 separate increases in the taxation of income. These include the universal social charge being put on a cumulative basis, an increase in DIRT to 41%, maternity benefit being taxed, the abolition of the PRSI allowance, an increase in minimum PRSI for the self-employed, the abolition of the PRSI block exemption for income from trade or professions, the restriction of the one parent tax credit to the principal carer, the restriction of tax relief on medical insurance premiums and the abolition of top slicing relief.

Those are merely some of the measures, and the way in which the Government has taken a greater amount of tax from people's income, albeit not directly in relation to tax rates, bands or credits, except in the case of single parents, many of whom have lost up to €2,500 a year.

DIRT tax, while not a tax on employment income, is an income tax and the massive hike, from 33% to 41%, in budget 2014 is another example of short-term and shortsighted action on the part of the Minister. While the aim of reducing income tax is laudable, when it comes from a Government which is committed to taking a further €2 billion out of the economy in October's budget the people will listen to those promises with a pinch of salt. The truth is that nobody knows for sure whether the capacity will be there to deliver on that commitment.

The local property tax has been a direct hit on those families the Government claims it wants to help. The Government doubled the local property tax while at the same time reneging on its commitment to ensure that 80% of the funds raised are spent locally.

The Government has so far introduced three regressive budgets. The last budget, in particular, targeted older people and young people who are out of work. It has been a consistent pattern of the Government that those with the least capacity to carry the burden have been the hardest hit through the measures that have been implemented.

The medium-term economic strategy set goals in areas, including debt sustainability, financing and labour market policy, but was short on specifics. The Government proceeded with the sale of Bord Gáis, in my opinion, massively undervaluing it, but the projects the privatisation programme are supposed to fund, such as the children's hospital, are stalled. The private medical insurance market is disintegrating directly as a result of Government taxes and charges.

The personal insolvency regime is not dealing with anywhere near the number of cases that it was intended to deal with because of the way in which it was established. The social dividend which was promised from NAMA is not being delivered because more than half of the properties it identified for social housing have been turned down by local authorities.

The legacy bank debt issue dates back to the June 2012 summit. The Government needs to work much harder to bring about the implementation of its outcome, which was heralded at the time by the Tánaiste as a game changer for this country. My party wants to see the retroactive recapitalisation of Irish banks proceed in line with the agreement that has been reached and there are important questions that need to be answered in that respect.

The Government promised, but has so far singularly failed, to deliver a strategic investment bank which would be focused on lending to enterprises, especially SMEs, in this country. According to Central Bank statistics, the amount of lending to SMEs and those wishing to buy a home for the first time continues to decline. In the banking sector, there is a dearth of competition and a far greater effort needs to be made to introduce additional competition. My party has called for a White Paper on the banking sector so that we can have some sense of an overall strategy and what sources of credit SMEs and individuals can realistically tap into.

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