Róisín Shortall (Dublin North West, Independent) | Oireachtas source

I am pleased to have the opportunity to speak in this debate. It is surprising that so few from the Government benches are offering to speak in this important debate, which takes place every year. Precious few Government people have been around between yesterday and today.

I wish to make specific reference to section 27, which relates to the windfall tax. This windfall tax was introduced in 2009 by the late Mr. Brian Lenihan. It was intended and designed to prevent speculative land transactions based on the rezoning of land. It was designed to ensure we learned from some of the mistakes of the past and the litany of abuse of our planning system, that we heard about in the subsequent planning tribunal.

In a reply to a question about the tax from Deputy Michael McGrath at the end of September, the Minister for Finance, Deputy Michael Noonan, stated: "The windfall gains provisions were introduced primarily to discourage overheating of the property market by way of speculative transactions involving rezoned land rather than as a revenue-raising measure." By the Minister's own admission, this tax was never intended to raise money but to prevent overheating of the property market. We now find ourselves in the incredible situation whereby we had an anti-speculation tax that existed when there was little or no speculation in the property market but is now being abolished by the Government precisely when there is significant evidence that such speculation is returning to the property market. This makes no sense whatsoever. Have any lessons been learned from the past? Who is dictating Government policy in this regard? Why is it that the current Government seems to be in a position of repeating mistakes that were made previously when it comes to land speculation and the property market?

I am keen to know more about the advice that was taken in respect of this measure. I know from a reply to a parliamentary question that I received in recent days that the Minister has said he listened to the submissions and, presumably, took on board the pre-budget comments made by the Construction Industry Federation, the Dublin Chamber of Commerce, the Society of Chartered Surveyors Ireland, Property Industry Ireland and Chambers Ireland. These are the same people who were giving all the advice in the build-up to the boom and who contributed in large measure to the bust that we are all still reeling from. We are seeing Fine Gael looking more and more like Fianna Fáil in the bad old days.

I am keen to discuss the role of NAMA in all of this, because the Minister said he consulted with NAMA about this measure. The windfall tax was a potentially significant policy instrument in respect of land rezoning. In the reply to which I referred earlier, which I received last week from the Minister, it emerged that the views of NAMA were sought, among others, when the Minister was considering a review of this tax. I am keen to know precisely how great an influence NAMA had on the final decision to abolish this tax. This is an important point. From the point of view of the transparency and accountability of that body, it is important that we know the extent of that influence. As we know, the role of NAMA, legally enshrined, is to maximise the value of the State land and property assets it controls. This role puts it in direct conflict with sustainable planning and rezoning policies. I believe NAMA should have no say whatsoever in how planning and rezoning is determined. This is part and parcel of the rezoning policy that was pursued for so many years, disastrously, in this country. To dampen down speculation, the windfall tax was introduced. One of the bodies that stands to benefit significantly from the abolition of this tax was one of the bodies that the Minister consulted on the matter. At the very least there is a conflict of interest, and it is wholly inappropriate that this has been the case. There is a need for some transparency on the matter, and I would welcome the Minister's comments.

I will comment on some of the other provisions and the budget in general. The backdrop to this budget is the fact that we are now finally starting to emerge from an exceptionally black period in our economic history. Fingers crossed, things are starting to pick up. We are all holding our breath to see whether these early signs of recovery will continue. This is the first budget in which there has been any leeway to do anything and the first that has not been dictated by bottom-line figures, although we are still obliged to meet earlier commitments. What this budget required more than anything else, given that we are starting the comeback as a country and as an economy, was a vision for the country. It needed a vision that recognised the extraordinary damage that has been done to the country and the economy in recent years. It required a vision that was about repairing that damage and uniting people around a shared vision of the future. It should have been about restoring confidence in ourselves as a people and as a country as well as restoring confidence in the political system to handle the situation. Unfortunately, we have got none of that vision. What we have got from this budget is the Taoiseach's vision, which, we can all see now, is a vision not for the people but for re-election. That is the beginning and the end of what this budget is about.

We know that during the period from 2008 to the present, everyone took a hit from the collapse of the economy.

However, the brunt of the recession and of austerity was undoubtedly borne by those who were least able to shoulder it. Two groups stand out in particular, welfare recipients and the working poor. The latter are people who perhaps lost their jobs or found it very difficult to stay in jobs or, after struggling to get jobs, the jobs turned out to be very poorly paid and they ended up not much better off than being on welfare. That is due to the low pay culture that has developed in this country in recent years. These people, by and large, were worst hit. They suffered cuts in their income. They were especially affected by cuts in services. People who are a little more comfortably off, although they experienced cuts in their income, in many cases were still in a position to pay for the services their families needed. However, people who were welfare dependent or who had low incomes, the working poor, did not have the money to buy services. They were doubly hit in that regard because the recession saw severe cutbacks in services across the board at social and community level.

In addition, the people who were hardest hit were also hit by the introduction of so many new taxes and charges. The manner in which those taxes and charges were introduced was very regressive as, to a large extent, the new charges did not take account of people's ability to pay. If one tells people they must pay for services and pay new charges, people on low incomes are proportionately far worse hit because they do not have anything to spare. The introduction of new charges imposes a far greater burden on them, to the point where many of them simply do not have the money to pay them.

A significant subset of the welfare dependent group and the working poor group is poor children. Last week, the UNICEF report showed that in the period 2008 to 2012 the number of children living in poverty rose by 10%, bringing the level of child poverty in this country to 28.6%, which is close to the bottom of the league in terms of developed countries. By any standard that is a matter of shame for this country. All of what one might call the developed world, OECD countries and so forth, was affected significantly by the recession, but the vast majority of countries managed to have policies to protect children from shouldering the brunt of the recession. This country did not. It was not done in the period in question, from 2008 to 2012, and it has not happened since then. Ireland is now fifth last in the league.

In the run up to the budget the Taoiseach said that the first priority for the Government was to cut the top rate of tax. Incredibly, and presumably supported by his colleagues in the Government, the Taoiseach said that after eight years of severe austerity and all it entailed for families the first priority in the budget was to cut the top rate of tax, a measure that would benefit the top 18% of earners in this country. Imagine the difference it would have made if the Taoiseach had said the first priority in the budget would be to end child poverty. Think about what it would have done in terms of confronting the reality of the worst damage that has been done by the recession and putting in place a vision and a course of action for forthcoming years in respect of identifying what our priorities should be. Think of the confidence it would restore to people that the appalling situation in which families have found themselves and the growing rate of child poverty were going to be reversed. Think of what it would do for our country and its future. The 28% of children who are currently living in poverty are tomorrow's adults and parents, which means we are back into the intergenerational sequence of poverty. That could have been broken if there had been vision from this Government. Regrettably, there was no evidence of that.

Consider, also, the confidence it would have restored in the Government and in politics that, at last, after the awful times of the last few years, the Government was looking at reality and deciding that the priority for this country had to be the 28% of children currently in poverty. Instead of that, the Taoiseach and the Government decided that the priority at this point in the development of the economy is the 18% of people who are best off in this country. It is just outrageous. The Government has chosen to introduce a tax package that will cost over €600 million. Let us consider what will happen as a result of that tax package. A millionaire gains €747 from the budget. A person on the minimum wage gains €173. How is that fair? A part-time worker on €9,000 per annum gains nothing from this budget. A high earner on €109,000 gains nearly €750. The gap between the lower paid and the better off widened significantly in the budget. No amount of Government spin, wishful thinking or contrived statistics will change that fact.

It is quite galling to hear Ministers and Government backbenchers uttering the nonsense that this budget was about cutting tax for low and middle income earners. It was not about that at all. This was predominantly about cutting tax for the better off. Of course, there were other ways to deal with it. There are measures and steps that can be taken to target any tax relief, but the Government chose not to do that. It sought to mislead people, I believe deliberately, by saying there was a clawback, that while it reduced the top rate of tax by 1% there was a clawback through USC. Overall, when one takes into consideration the widening of the standard rate band, which benefits all those earning very substantial incomes, that clawback did not exist. Everybody earning over €70,000 per annum benefits to the tune of €747 per year and double income, high earner households gained double that amount. By no stretch of the imagination can this be seen as a fair budget.

The UNICEF report to which I referred showed that children bore the brunt of the recession and identified what measures the Government should have taken to tackle the problem. It should have invested in family support services, which have been decimated in recent years, and properly funded preschool services. The provision of a year of free preschool education is all very well but it is seriously under-resourced, especially in the poorest areas. The report states the Government should also have invested in education. Rather than improving education services, however, it chose to implement more cuts. It failed to take the opportunity to reverse the forthcoming 1% cut to the capitation payment. Despite hitting the poorest and most vulnerable children in society, the Government believes it is all right to allow it to proceed.

The Government should also improve health services for children. At community level, primary health care services have been slashed and long waiting lists have developed for speech and language therapy and occupational therapy. Some 9,000 cases involving child welfare and protection have not been allocated a social worker. Moreover, 400,000 people are on waiting lists for hospital services and 60,000 are on waiting lists for primary care services, which are very important for children.

This legislation is a missed opportunity. The Government had a chance to show we live in a caring and decent society and have set the right priorities. It declined to take it, however, choosing instead to introduce a regressive budget and this regressive legislation which have widened the gap between rich and poor, further alienated many sections of society and increased cynicism about politics. It was for these reasons that 150,000 people took to the streets last week.

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