Dáil debates

Wednesday, 4 November 2015

Social Welfare Bill 2015: Second Stage (Resumed)

 

4:40 pm

Photo of Peter FitzpatrickPeter Fitzpatrick (Louth, Fine Gael) | Oireachtas source

I welcome this opportunity to contribute to this important debate. There is no doubt that the last few budgets have been very difficult for everyone. As a result of the disastrous policies of Fianna Fáil, this country was left bankrupt and unable to fund its day to day requirements, which resulted in the introduction of the dreaded troika programme. However, those difficult budgets paved the way for our exit form the bailout programme, reduced our public debts and paved the way for real economic recovery, which can be seen by the fact that we are the fastest growing economy in Europe. It is vital that we keep this recovery on track and, in doing so, provide much deserved relief to Irish taxpayers, who have sacrificed so much in recent years to get this country back to financial independence.

We must not only provide tax cuts but we must also improve our public services, including providing more nurses and doctors in the health service, more affordable child care, reducing classroom sizes and have a more efficient public service. We must never go back to the Fianna Fáil boom and bust policies or move to the high tax and high spend policies of Sinn Féin. We must be sensible and take only affordable steps that will keep our recovery going and bring even more benefits to Irish households. We must protect the recovery that is taking place. Even though we are the fastest growing economy in Europe, unemployment is still too high at 9.4%. We need to get more people back to work in jobs that are sustainable.

I am delighted that my own county of Louth is performing very well in terms of job creation and the fact that it gets one in ten of all new jobs as a result of foreign direct investment proves this. In my hometown of Dundalk, we are fortunate to have many high calibre employers, including eBay, PayPal, Sales Sense and National Pen, which this week announced the creation of more than 80 new permanent positions in its Dundalk call centre. I know from my dealings with constituents the effect getting meaningful employment can have on the individual concerned and also on his or her family. There is no doubt that employment is the most effective way of improving the quality of life for those involved.

A sensible approach has been taken to this budget. The measures outlined are affordable and will not overheat the economy. Unlike our colleagues on the opposite side of the House, Fine Gael has a proven track record in managing the economy. This budget will secure our recovery and create even more jobs. We have already exceeded our forecasts on job creation. The tax cuts announced will no doubt encourage emigrants to return home and this, in turn, will attract even more foreign direct investment which, as we all know, will attract even more jobs to this country. It should be noted that over five budgets, this Government has restored our public finances without taxing jobs, a key election promise, and created more than 125,000 jobs since the start of the Action Plan for Jobs in February 2012.

The income tax cuts announced in the budget are fair and spread the benefits of recovery. For a working family of two middle income earners, on around €50,000 each, these changes mean an extra €2,300 in their pockets each year. Other measures announced in the budget include the following measures. The capital gains tax entrepreneur relief will mean a decrease in capital gains tax for entrepreneurs from 33% to 20%. In terms of the knowledge development box, there is a lower 6.2% rate of corporation tax on profits from patents and copyrighted software, which will encourage research and development to take place in Ireland. We are making work pay to increase jobs through cuts in the lower universal social charge rates and bands and a 50 cent increase in the minimum wage. We are making child care more affordable and removing barriers to work, including free preschool for children from the age of three until primary school, the provision of 8,000 extra community child care scheme places, the introduction of two weeks' paid paternity leave and a €5 increase in child benefit. We have a new €27 billion multi-year capital plan to address emerging infrastructural bottlenecks in the economy which will create an additional 45,000 jobs in the construction sector.

This is a fair budget with everyone benefiting from tax cuts. Extra funding is being provided for key services. Extra funding is being provided for housing, with an extra €69 million for social housing and an extra €17 million to tackle homelessness. NAMA will build 20,000 houses over the next five years. Extra funding is being provided for health, with free general practitioner care for the under 12s and a €900 million increase in health funding. There will be 2,260 extra teachers and a reduction in the pupil-teacher ratio from 28:1 to 27:1. There will also be 600 extra Garda recruits. There is fairness for low earners in that they gain the most through the universal social charge cut and the 50 cent minimum wage increase. Lower earners will gain more under the Government's tax cuts than under the previous Fianna Fáil-led Government. A €20,000 earner only gained €255 under Fianna Fáil but that earner will gain €493 under this Government through the universal social charge and pay related social insurance cuts. Fine Gael's universal social charge cuts are worth more to an ordinary family - for example, €717 for a family on €45,000 - than Sinn Féin's populist property tax of €405 for houses valued under €250,000 and water charges cuts of €160. There is fairness for the self-employed in terms of a new tax credit worth €550, which moves them towards equal tax treatment with PAYE workers. The budget provides fairness for families with the decrease in inheritance tax by increasing the threshold and freezing the local property tax until 2019.

I would like to put on the record that this Fine Gael-led Government has been responsible for turning the fortunes of this country from the brink of bankruptcy to where we are today, with the fastest growing economy in Europe.

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