Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I welcome the opportunity to speak about the Finance Bill 2014. We must look at what the essence of this legislation is. I think we all know that it is to give statutory effect to the provisions announced by the Minister for Finance on budget day. That brings us back to the basic question of whether this is a good or a bad Finance Bill. That can only be judged on the basis of whether the budget announced a couple of weeks ago by the Ministers for Finance and Public Expenditure and Reform was a good or a bad budget, or a fair budget. It certainly failed the test of fairness. In a nutshell, it was a budget for the high earners, and those on lower incomes suffered. There are some people in Ireland who believe that is good. I do not think so.

Are the follow-through pieces of legislation - the Finance Bill and the Social Welfare Bill, which are based on an unfair budget that lacks a social conscience - good or bad Bills? Overall, the Finance Bill is bad legislation, and this House should reject it - and the Social Welfare Bill, when it arrives - because it is the legal implementation of an unfair budget. Many of the fine details in the Finance Bill, which I think is 120 pages long, are very good in their own right. There is a list of them, section by section, covering all the various areas of taxation in Ireland. Many of the individual proposals will not be debated because they are not too controversial and people will be happy enough that some specific measures are going through.

Be that as it may, we have a responsibility to assess the overall impact of the budget, the Finance Bill and the Social Welfare Bill. This budget fails the test of fairness. The previous speaker noted that claims on the Government side normally exaggerate the positive impact of a budget, Opposition claims are probably overly pessimistic and the truth is somewhere in between. The truth about this budget is simple. Households earning more than €70,000 are the winners but households with incomes of less than €40,000 per annum, or €800 per week, are losers. This budget and the Finance Bill can be condensed down to that sentence. That is the ethos behind the Bill and it is the reason why it should be rejected.

I have taken the impact of water charges into account in arriving at those figures. There may be some changes to the universal social charge and child benefit but, while these are all well and good we cannot ignore the water bills which are due to arrive early in the new year. I acknowledge the Government is in a state of flux and does not know its own mind on that issue. It is probably still looking at the opinion polls. In any event, one cannot divorce the impact of government decisions from people's daily lives. Like the local property tax introduced last year, water charges impact on people's daily lives. The Minister for Finance was forthright in arguing that the impact of water charges should not be lumped into the consideration of the effects of the budget. They are magically off the balance sheet, as if they are not real bills. I do not know where the Government got its fascination with keeping the accounts off balance sheet whenever it wants to do things that the State was able to do in the past. Even the homelessness issue is going to be dealt with off balance sheet. A special vehicle for social housing is to be created through a public private partnership. All of the key areas that a Government should be funding directly out of its capital expenditure and current budgets are now mysteriously going off balance sheet. This reflects the Government's preference to avoid dealing with issues directly and to have somebody else take responsibility.

However, the Taoiseach let the genie out of the bag in regard to mixing the two issues when he stated that if we do not proceed with water charges, the top rate of income tax will have to increase by 4%. He has thus clearly linked income tax to water charges. This gives the lie to what his own Ministers have said in previous weeks. They were bravely holding the line in their efforts to keep the two apart but the Taoiseach blew their cover. It is interesting that he referred to the top rate because it would impact on the people he looked after by lowering it, and who are probably his supporters. He wanted to put the fear of God into them. However, these are just funny, off balance sheet figures. The Department of the Environment, Community and Local Government produced an estimate of €533 million for Government expenditure on water services this year. As there is already income of €222 million from commercial sources, I do not know how we would require an increase of 4% in income tax. However, when people assess the impact of the budget, they will have to include the cost of water charges if they are to follow the Taoiseach's example.

The Minister, Deputy Noonan, referred to the provision of tax credits for up to €500 worth of water at 20%, which could be €100 in a year, and will be calculated in arrears on a monthly basis based on the payment cycle. It is possible that one will get a tax credit 24 months after paying a water bill. However, he forgot about all the people who are not in the tax net. Hundreds of thousands of people in employment will not benefit from the social welfare concessions announced by the Minister for Social Protection or from the income tax concessions announced by the Minister for Finance. These are ordinary people who were left out in the Government's rush. People who become unemployed will not benefit because they will not qualify for the free fuel allowance. It is necessary to be long-term unemployed to qualify for that allowance. The Minister is discriminating against people who lose their jobs. I will deal with that issue further when the Social Welfare Bill comes before the House.

This is a Finance Bill for high income earners. There is an income tax cut for those on the top rate and everybody else has been left behind or ignored. That suggests a lack of social conscience on the part of the Minister for Finance. Perhaps he believes that people will vote in the next election based on their pockets rather than their social conscience but I suspect, after the difficulties Ireland has encountered in the last several years, that there is a higher level of solidarity among the people. What upsets people is the preaching about the country picking up. As if it was not enough that they were not feeling any benefits in their pockets, they are now being told that others are benefiting.

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