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

When they are trying to balance the books on their household budgets, it is an issue which they have to take into account. The Minister established Irish Water and approved expenditure of €180 million in setting it up, as well as a further €500 million for installing meters before a pipe is fixed around the country. He gave the Commission for Energy Regulation its instructions on water charges. The tables published at the back of the Budget Statement are meaningless. They might be meaningful to the Minister or the officials who prepared them but these bills will be arriving through the door in January and, as I have outlined, many people will be out of pocket, especially individuals on low incomes who will benefit to the tune of €174 and who, even net of the tax relief the Minister proposes to give them on water charges, will be paying at least €200 or €300. They are worse off as a result of a budget which we were told was designed to help them. How did the Minister manage to achieve that? He spent €1 billion which he had to borrow because he did not have it, yet the very people he is trying to help are worse off. A couple with one working spouse who earns €40,000 will be worse off as a result of this budget. That is an extraordinary achievement. Others will be better off, and the analysis will emerge in the fullness of time, but the Government has singularly failed in its stated objective of lifting the burden on people who were feeling it the most and, once again, it has failed the test of fairness.

Does it not say something about the Government that when it is taking money off people, it takes no account of ability to pay? When it took money out of pay packets, such as through the abolition of the PRSI exemption, it took €264 from everyone regardless of whether they were earning €20,000 or €200,000 per year. However, when it is time to give something back it does not give everyone the same amounts. It does not look after the person working on the minimum wage or the family struggling on €35,000 or €40,000 per year, who are above the social welfare eligibility thresholds for supplementary welfare, family income supplement, rent supplement or medical cards. They get none of those, and they are worse off as a result of this budget.

We all accept that the marginal rate of tax is high. The Minister would have been better off if he had increased tax credits because they would have benefited everybody equally. Instead, he has decided on a mishmash approach. He is reducing the marginal rate of tax up to €70,000. We were told this is a big issue for inward investment and that when the Minister for Jobs, Enterprise and Innovation goes to New York to attract the big executives, they are worried about the marginal rate of tax. I do not think they are earning less than €70,000. It was about getting the headlines and fulfilling the commitment to reduce the marginal rate of tax rather than using the tax system to redistribute resources and introduce equity to the system.

This brings me to the issue of budgetary reform. When Fine Gael and the Labour Party were in opposition, they were going to do the devil and all on budgetary reform. We were going to have open debates in this House and in committees about the options and take a more mature approach to deciding on the budget of the country. The days of the big bang announcements on budget day were to be gone. The truth is so different. The process of introducing the budget is more secretive now than at any time in the history of the State, with fewer people involved in making decisions than ever before. We are told that the Minister, Deputy Noonan, brought the tax package before the Cabinet this morning.

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