Tommy Broughan (Dublin North East, Independent) | Oireachtas source

I thank the Acting Chairman for the opportunity to speak on budget 2015. Last night I voted against Financial Resolution No. 1 as the only means I had of showing total opposition to the many failures and missed opportunities of this budget. Budget 2015 should have been the perfect platform for turning away decisively from austerity and embarking on a new national path. Unfortunately, to echo the Minister, Deputy Michael Noonan, we did not take the road less travelled. In fact, that would have been the road of breaking free from cuts and decisively moving to a fairer distribution of taxation to benefit all our citizens. For the fifth budget in a row, Deputy Noonan, as I expected, has continued on this well-travelled well-worn harsh road. It is the road travelled by so many other European countries at the behest of Chancellor Merkel and Germany. It is the harsh road of protecting great vested interests and keeping public services expenditure in a continuing straitjacket. A cursory glance at the comprehensive expenditure report of the Minister for Public Expenditure and Reform, Deputy Howlin, confirms this view. The social protection budget, including social insurance payments by workers, has been cut by 1%, or €200,000, in budget 2015. The education budget will rise by only 0.7%, or €60.4 million, and includes continuing cuts in the school capitation grant and other charges from past budgets.

Even the health budget will increase by just 2.3% to €13.46 billion, despite the Minister, Deputy Varadkar, arguing time and again in the media that the 2014 outturn had to be at least €13.6 billion just to maintain basic hospital and patient services this year. The ongoing scandal of hospital waiting lists and extreme pressures on emergency departments, such as in Beaumont Hospital in my constituency, cannot be addressed by the Estimates before us. Deputies have already said that the health budget is a once again a phoney budget which will impinge heavily on the most vulnerable of our citizens - the sick - and that is certainly borne out when one looks at the full expenditure review. There is also a projected €130 million in savings in the health budget through procurement, drugs costs, agency costs, clinical audit and special investigation, but will this be achieved? We know what happened last year to the so-called probity medical card savings.

There are also major cuts in the budget for the Department of Communications, Energy and Natural Resources, at over 5%, and in the budget for the Department of Transport, Tourism and Sport, at 2.6%. These two Departments are, of course, led by very inexperienced Ministers who perhaps did not distinguish themselves in other roles. The belated 42% increase in the environment budget is welcome, but the increase of 1.2% or €638 million in overall gross capital and current expenditure is hardly the dramatic end to austerity that was being hailed by the usual media chorus this morning.

I note that Ministers have been suggesting that lower- and middle-income families will be slightly better off after this budget. That is not the case when one takes into account the impact of water charges on household finances. Even with the subsidy for social protection payment recipients of €100 per year and the tax relief for income tax payers to a maximum of €100 per year, the net impact of water charges on many lower and middle income families will be to make them worse off. Today, I again call for the abolition of Irish Water, this unnecessary incubus with its cosseted, highly paid and unnecessary staff which effectively places a barrier between the work of this House and ordinary households and local authorities. There is also the nonsense we go through at present whereby we contact a post office box in Cork to get some type of response. It then contacts Fingal County Council, in my case, which then contacts me and Irish Water. It is a circle of totally unnecessary bureaucracy. Let us get rid of Irish Water. I hope the Acting Chairman, Deputy Twomey, will put that point of view to his party, because that party, with the Labour Party, is heading for annihilation at the next general election. The Government will lose at least 50 or 60 seats, between both parties, if Irish Water survives. It is a most unnecessary and unjust tax. Irish people will simply not accept it.

In the run up to the budget, Fine Gael Ministers and lobby groups such as the Irish Business and Employers Confederation, IBEC, continually raised the impact of the 52% marginal tax rate on middle and higher income earners. The Minister's proposed income tax changes, including the cut to the 41% rate, a higher entry point to the higher rate of €33,800 and the USC changes, are said to reduce the tax burden, but many of us have considered what the impact would be of a 1% or 2% cut in VAT overall. It must be recognised that all citizens are taxpayers and there must be recognition of the very regressive nature of consumption taxes such as VAT.

Budget 2015 contains a significant amount of tax expenditures, particularly for agri-business - I estimate that expenditure of approximately €30 million was announced yesterday by the Minister, Deputy Noonan - and other big business interests, which amounted to perhaps another €80 million, including the new knowledge development or patent box. Yet, other than preliminary headline figures for the cost of each new tax expenditure, we do not know the cumulative impact of tax expenditures on the public finances. For the past two decades of my membership of this House, the Minister and his predecessors have come to the House with a huge finance Bill mainly concerned with these tax expenditures, but we do not have any information or cost-benefit analysis on the cumulative impact of all of those expenditures. In fact, would we have had a budget deficit at all this year or last year or in any year since the crisis developed if we had not had such expenditures?

I welcome the proposed abolition of the "double Irish" tax arrangement, basically for the sake of our country's reputation. I also acknowledge the Government's commitment to retaining the 12.5% corporation tax rate. The Minister, Deputy Noonan, told me a few months ago that the average effective corporation tax rate was 10.7% or 10.9% since 2008, but I do not know what that means. What does it mean when we know that some huge companies are paying only 1% or 2%? Most of the citizens we represent would expect us to deliver a 12.5% tax rate. They pay the PAYE standard rate or 40% rate and the VAT rate, and they would expect corporations to pay the tax rate that this House has designated. We have always dodged that issue.

In the budget submission I made last week to the Minister for Finance, Deputy Noonan, and the Minister for Public Expenditure and Reform, Deputy Howlin, I advocated two solidarity taxes to raise approximately €900 million. These were a new 48% income tax rate on individual incomes above €100,000, something I and a number of other Independent Deputies have proposed over the last few years, and a bank levy of at least €500 million, to continue through the years until the national debt-to-GDP ratio falls below 60%. Of course, there was never a chance of such a solidarity tax being introduced by a Fine-Gael-led Government, and neither Minister had much to say yesterday about banking.

I am delighted to have the opportunity to offer my comments. Yesterday, unfortunately, was not the end of austerity, but a missed opportunity by two Ministers who might well regret it when we are all on the hustings, perhaps next year.

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