Simon Harris (Wicklow, Fine Gael) | Oireachtas source

I am pleased to have an opportunity to speak on budget 2016. Indeed, I look forward to having an opportunity to debate many of the measures in detail during the passage of the Finance Bill.

I thank Deputy Calleary for his attendance to represent the Opposition. If Sinn Féin Members were present, I would have questions to ask about their alternative budget. I have been asking those questions often in the media and I hope at some time to get an opportunity to put them in this House, although the questions tend to flow in one direction. The Sinn Féin Party made an alternative budget submission. In its submission, that party, which tells us it wishes to see an all-island and all-Ireland economy, proposed a marginal tax rate in this jurisdiction, the Republic of Ireland, that would be nearly 20% higher than the marginal tax rate up the road in Belfast. Will it explain to the Irish people, if not to the Dáil, why it thinks it is appropriate that people here would have to pay significantly higher taxes than people in Belfast and why it thinks that it would not have a detrimental effect on the mobility of labour and keeping a talented workforce in this country if our citizens are taxed 20% more than they would be taxed in Northern Ireland or the United Kingdom?

Second, Sinn Féin might also explain why it thinks it is fine to be in government in Northern Ireland, where business taxes such as capital gains tax would be approximately 20%, when it proposes increasing capital gains tax in this jurisdiction? In politics, particularly the closer we get to elections, one cannot speak out of both sides of one's mouth. One must ensure the numbers add up and that one has some type of consistent policy. While I do not agree with many policies of the Opposition, and it does not agree with many of our policies, there must be consistency. That consistency is lacking in Sinn Féin's policies north and south of the Border, not just on welfare, schools and public sector jobs but also on the crucial issue of tax and money in the pockets of hard-pressed families.

Many citizens heard yesterday's budget with a great sense of relief. There is no whooping, hollering or popping of champagne corks. The last number of years have been extraordinarily difficult for them, but yesterday's budget marked a scenario in which there was no need for any new taxes, other than an increase in the price of a packet of cigarettes, and there was an opportunity to invest in crucial services such as education, health and putting more gardaí on our streets.

I will comment on a few elements of the budget. The first is the area of child care. As a House and a nation we must decide that this is an area we intend to get right. If one considers the Celtic tiger economy years objectively, and this is not a partisan comment, we have never got this matter right. We have seen increases in direct payments to families, which is important, but we must also have child care structures. Yesterday's budget puts those structures in place by extending the free preschool year effectively to two years, by putting in place funding to develop after-school structures, so that children can be safely cared for in quality environments after school to enable working families to continue to work, and by increasing the amount of subvention for child care to lower income families and families in training and education. These are important measures that are coupled with the introduction of paternity leave, which is two weeks paid paternity leave from next September, so the role of fathers can be recognised in child care and rearing a family. Much more must be done in this area but the Irish people can now see the beginning of a structure and system in which we can increase investment over the next number of years, if we stick with the economic plan at hand.

I am particularly pleased that the self-employed have been recognised in this budget. I addressed the Carlow Chamber of Commerce this morning at a post-budget briefing. I met a man who said, "I was recognised in the budget yesterday. The self-employed were mentioned in the budget." It is true that we have not closed the gap fully between the self-employed and the PAYE worker with regard to tax credits, but we have started to close it. We have made a clear commitment that we will close the gap over the next number of years should we be honoured to continue to maintain the public's finances on its behalf.

With regard to the USC reduction, I have heard a great deal of nonsense, frankly, about the difference between whether one should put in place tax cuts or reduce income tax. One can do both. There is no need to take my word for it, one need only look at the Exchequer figures and returns for this year. In the last budget we reduced USC. We took people out of USC, reduced a number of USC rates, reduced the marginal tax rate and increased the entry point to the marginal tax rate. What happened? We took in more tax. With those taxes we could not only pay down the deficit, which is important, but we could also invest extra money in health, education and the Christmas bonus for our pensioners, people with disabilities, carers and the long-term unemployed. Extra taxes, if used in the correct way, can stimulate the economy.

We must stop having an argument about tax that is just concerned with redistribution. Redistribution is important, and we have a very progressive tax system, but tax can also be used as a tool for growth in the economy. That has been shown with the 9% VAT rate, which I am delighted has been retained. Now we can show it with the USC reductions by removing people from the USC and by reducing the burden of the USC on people's incomes.

Incidentally, these are not wealthy people. The classification that some people in this House use for wealthy people is bonkers and does not tally with the real world. Some Members of the Opposition would have one believe that a nurse married to a garda or a small business owner married to a teacher is wealthy. They are not. They are the squeezed middle. We want those people to play their part in the economic recovery. We want them to be able to pay their mortgage, put their children through college and to be able to work more hours without the Government taking more than half of their income in tax. We must reduce the burden for those people, and we set about doing that yesterday. The Taoiseach made it clear today that if we stick with the plan, it will be possible to abolish the USC by 2020. However, we can only abolish it if we reach full employment and if we achieve a scenario where there are so many people working, more than ever previously in the history of the State, we will be able to continue to fund the State without being reliant on the USC, which was introduced as a temporary emergency measure by the previous Government during the economic crash.

I welcome the investment in education. My colleague, the Minister of State at the Department of Education and Skills, Deputy English, has outlined a number of the good measures. I particularly welcome the 600 extra resource teachers to look after children with special needs and to ensure they can fully participate in, and benefit from, the education system.

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