Shane Ross (Dublin South, Independent) | Oireachtas source

Had the Government not levied an additional 50 cent on cigarettes, I would wonder what the Cabinet had been smoking. I am astounded by the unreality of that with which Members have been presented today. I suspect very few Members in this House remember 1977, which was a time when Fianna Fáil bought its way back into government by producing a totally and utterly tailored manifesto to every interest group it could satisfy. This is precisely what is happening again and I agree with Deputy Clare Daly's comments about boom and bust. This is the beginning of the next artificial boom, tailored to various interest groups, presumably found by focus groups being held periodically and without ideology, commitment or conviction. I believe Members today are witnessing the beginning of an unreality which, if the Government listens to what is happening outside Ireland, is not something it should be pursuing responsibly. I also believe the electorate will confound the Government with its ingratitude when it comes to the polls. Nobody will be fooled that this budget today was worked out in a scientific and forensic way for the benefit of the economy. This budget was worked out for the benefit of Fine Gael. I do not believe it will work out for the benefit of Fine Gael but that is the way it was tailored.

In a similar manner to how the €1.5 billion was discovered on Friday night, the growth rate was miraculously raised by the Department of Finance from the Spring Economic Statement figure of 3.8% to 6%. That gives the Government an enormous amount of scope to do exactly what it likes or to state it will do exactly what it likes. However, the experience of election budgets of this sort, as I believe Deputy Catherine Murphy observed earlier, is the amount of money given, in many cases to the poorest, is taken back subsequently because too much has been given at the wrong time simply and solely because an election is around the corner. The warnings from the IMF and elsewhere about world growth are coming thick and fast and China is in trouble. Our debt levels, about which the Minister boasted today, still are absolutely unacceptably high and to bridge the gap, to pay what is being paid today, we must borrow money. This budget is facilitated by borrowed money, whatever way one looks at it. Moreover, it assumes the prosperity we apparently now have will continue at a steady rate until 2021, that is, six years into the future. Most forecasters have got it wrong in the past on a six or eight-month basis in our present experience but to base this budget on a 3% growth rate right out to 2021 is completely unrealistic and highly unlikely to happen.

The issue of the erosion of the tax base is interesting. The Government, in its earlier years, made a great play of the need to broaden the tax base and as a result, introduced property tax, supposedly, and water charges to broaden the tax base. Today, the tax base has been narrowed, which is a highly dangerous course to take. The Government should have listened to a debate that took place in this Chamber only last Wednesday on the issue of multinationals. It is quite extraordinary that multinationals, which I welcome to this country and which have given many jobs and much prosperity, somehow are sacred cows when it comes to taxation. Everybody knows the 12.5% rate on profits is not a 12.5% tax on profits. It is a 12.5% tax rate on whatever the multinationals decide it is going to be and what is happening here is profit-shifting. The Government should broaden the tax base by approaching the multinationals and telling them they must pay their fair share. While we do not wish to frighten them off, the tax base should be broadened and were we to take that attitude, many of the problems evident today would be resolved overnight.

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