Tom Barry (Cork East, Fine Gael) | Oireachtas source

I welcome the opportunity to speak on the motion. It is in the context that, between 2008 and 2011, some 250,000 people in the private sector lost their jobs.

The motion states that the percentage of households suffering from deprivation increased from 24.5% in 2011 to 30.5% in 2013. Unfortunately, these figures are out of date. If the Technical Group was running a business, it would not do its cashflow projections on figures going back that far.

Strong recovery is now under way in the economy, with GDP estimated to grow at 4.7% in 2014 and projected to grow by 3.9% in 2015. These are good figures and are the best in the EU. The best route out of poverty is to have a job. The Government is determined to return the economy to full employment by 2018. Since 2012 and 2013, the period to which the survey refers, there have been significant improvements in the economy. For instance, unemployment and long-term unemployment have fallen significantly. The January live register figures published yesterday show a reduction of over 70,000 in the number of unemployed people since 2013. The unemployment rate fell yesterday to 10.5%. We are aiming to have 2.1 million in employment. Those are the figures we should be considering.

The motion refers to the explosion in the housing and homeless crisis over the past three years. A lot of people who come to my office tell me they have been on the housing list for ten years or more. It is a problem, but the Government's social housing strategy and its commitment to deliver 35,000 new social housing units in the period to 2020 has to be welcomed and recognised. Poverty is strongly linked to unemployment and as employment increases, we can expect to see decreases in poverty and deprivation. The best way to reduce poverty is for people to get jobs and the Government has protected the incomes of those in the bottom 20% quintile, as it is termed, by maintaining core welfare rates.

While deprivation has increased, it should be noted that the at risk of poverty rate has declined from 16.5% in 2012 to 15.3% in 2013. The at risk of poverty rate in 2013 is lower than in 2005 when it was 18.3%. The main beneficiaries of income tax and USC changes introduced in budget 2015 were those on low to middle incomes. The Government's intention, subject to physical constraints, is to continue to introduce further changes of this nature over the coming years. I welcome the social impact assessment of budgets from the Department of Social Protection. It is important.

The motion refers to the Credit Suisse global wealth report of 2014, which provides some statistics. For example, there are 92,000 millionaires in Ireland. I had a quick read of the report. On page 97 it states:

We recognise that the rich list data have limitations. The valuations of individual wealth holdings are dominated by financial assets, especially equity holdings in public companies traded in international markets. For practical reasons, less attention is given to non-financial assets apart from major real estate holdings ... Even less is known - and hence recorded - about personal debt.

This country knows plenty about personal debt. There is no point in adding up a person's wealth and assets on one side unless one adds up his or her debt on the other side. Most people would give away a lot of assets which are highly leveraged to the banks. Many SMEs invested in non-core areas and now find themselves in a position whereby they are trying to pay back non-core debts while keeping businesses going.

Farm businesses are investing. While they might seem to have a lot of equity, the income that can be derived from it is actually very low. Last year, 15,000 farmers were in receipt of farm assist payments to bring them up to the level of social welfare payments. There are also people who have large levels of debt because they are expanding to get themselves to the scale that will make them viable for the next generation.

Sometimes referring to reports is a little bit sloppy and skews opinion. I refer to the think-tank for action on social change estimates based on an Economic and Social Research Institute study carried out in 1991. That was 24 years ago. I remember the time very well because as I finished my PhD many more graduates had to emigrate than have to today. All one could hope to earn was £13,000. Thankfully, we are living in different times where people's skills and expertise are recognised and paid for. If one invested money at that time, one would have earned an overnight rate of around 50%. They were very tough times.

The CSO household finance and consumption survey 2013 suggested that the top 20% of incomes have almost 40% of the wealth. Family homes were mentioned. Many of the people to which Deputies have referred are the working poor. They pay all their bills, are trying to put their children through college, do not qualify for grants and have very little left. They come to my office - I am sure other Deputies also know of people in this position.

It has been stated that the top 1% of earners have an average income of €403,000 per year, but I remind the House that they pay a lot of tax. The top 1% of income earners who are paid over €200,000 are projected by the Revenue Commissioners to pay 20% of all the income tax and USC in 2015. Targeting people on higher incomes involves the major risk of excluding people who have very highly transferable skills, such as those in the ICT sector. It is something about which we need to be careful.

Introducing rent controls was mentioned. Many people have second homes which they bought for all sorts of reasons and are now stuck in negative equity. They have paid all their taxes and there is a discussion about interfering with their property rights which would reduce their chances of making an income from those properties. We must remember that the problem pertaining to Dublin cannot be translated to the rest of the country. Rents outside Dublin have not come close to what they were during the so-called boom periods.

The aggregate costs of abolishing local property taxes, water charges, USC and all that goes with that would be about €4.25 billion. We are still borrowing €6 billion. The Technical Group wants to go back to a position where we would be €10 billion out of kilter. We cannot afford to do that. We might love to, but it is not going to happen. Such changes would require the 40% rate of tax to increase to 71%. There would be absolutely no reason for anybody to get up out of bed and go to work. It does not make sense. Inequality can be dealt with in many ways. Education is one of the solutions which should have been mentioned. The role of DEIS schools is highly valuable in Irish society.

Rural growth is happening. Milk quotas will be abolished in a number of weeks. The rural development plan is due to be introduced. Single farm payments have been negotiated. We are seeing an emergence of our rural society for the first time in many years. This motion is very interesting and serious. I would hate people to believe we are in a Dickens-type society because we are not. We are in a society which is emerging from a desperate financial mess and the Government needs to be credited for the work it has done.

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