Paul Murphy (Dublin South West, Socialist Party) | Oireachtas source

The Government got the headlines it wanted for the budget. The minor spat with Professor John McHale did it no harm in that respect. The budget was described widely as a giveaway budget, including by members of the Opposition. Unfortunately for the Government, that is not how it is perceived by the majority of ordinary people. Certainly, the indications in the opinion poll are that people in the Labour Party's base did not consider it a giveaway budget for them. I believe those people are more accurate than those who wrote the headlines and those who described it as a giveaway budget.

It is a giveaway budget for some, such as high earners and big business, and the continuation of a giveaway to the bondholders, but it is not a giveaway for working class people, middle and low income earners and people on social welfare. We saw in the rhetoric surrounding the budget a further step up in the Thatcherisation of the discourse of the Government regarding work and unemployment, with the suggestion that this was a budget for work and that we have a Government for work, just as the Labour Party presents itself as a party of work. This is about the demonisation of the unemployed and trying to get a benefit from some higher paid sections of society. The details in the Finance Bill confirm that assessment of the budget.

It is the fifth regressive budget in a row. It takes some doing by a government that includes the Labour Party to manage to transfer wealth, year on year, from the majority to the small rich minority. The income gap between rich and poor has been expanded by over €500 per year, and over the past two years it has been expanded by over €1,000. One can compare more extreme examples. When one compares a single unemployed person with a person earning €75,000 per year the gap is even more incredible. The single unemployed person gets €95 per year, which is €2 per week, and the person on €75,000 gets €900 per year, which is €17 per week.

The Government could do with being reminded of what an average income is in this State. It often talks about middle income earners as if the average person in the State earns approximately €70,000 or more each year, that is, the people at whom these budgets are aimed. Obviously, that serves a purpose in terms of the propaganda the Government is trying to get across. However, half of the people in this State earn less than €28,500 per year, and half of the people earn more than that. The reality is that middle income is between €25,000 and €40,000 per year. Those people got very little from the cuts to the USC. Somebody on the average income of €28,500 got an extra €5 per week. If they are in private rented accommodation, that is wiped out. If they were paying the water charges, which thankfully they are unlikely to do, it would be gone. It is also gone if they are paying the property tax. If they are suffering under all of the effects of the continuing austerity in health and education, and in some cases being pushed into the private sector in those areas, it would be gone. There is no giveaway budget from the point of view of low or middle income workers.

As regards the increase in the minimum wage, any increase is welcome. It is the first increase in the minimum wage in eight years. Our minimum wage is still 25% lower than the living wage of €11.50 per hour. The living wage is calculated on what a single person with no children basically needs to survive. There are huge numbers of people - one in four workers - living in deprivation as a result of being in work. In many of the homeless couples who seek my help one of the people will be in work. There is a flowering of low pay, short-term, precarious contracts and this budget does little to deal with it. It says it is okay to have a minimum wage that is 25% below what is needed simply to survive.

Then one looks at what was given, or not given, to people on social welfare, which is still a substantial section of the population. They got nothing, aside from a Christmas bonus. An extra €1.81 per week is all that was given to people who are finding it extremely hard to get by. In many cases they will be in the private rented sector, so they are given effectively nothing. That is the impact of the budget and this Finance Bill from the point of view of the majority.

Contrast the Government's approach to social welfare with its approach to corporate welfare in the budget. Approximately €15 billion is spent each year by the State on various elements of corporate welfare. It is huge expenditure. One never hears about corporate welfare fraud, wasters on corporate welfare or the like. That language is reserved for unemployed people. Corporate welfare was increased again in this budget. There is a cut in capital gains tax from 33% to 20% for SME owners selling their business for a capital gain of €1 million. Most small business owners are not selling their businesses for €1 million, whereby they can take advantage of this. This applies to the larger SMEs.

There is no increase in the bank levy, which remains at only €150 million per year. Banks can still write off the losses incurred during the crash, and bailed out by us, against their profits for corporation tax purposes. This means many of the banks will not be paying any taxes on their profits for years to come. In the case of Bank of Ireland, that is over €1 billion that it will not pay. There are also two cuts to employers' PRSI.

The cherry on the cake in the project of corporate welfare is the so-called knowledge development box. The knowledge development box is a replacement for the double Irish arrangement. It is a means of legal tax avoidance by the major multinational corporations, the developmental model employed by this and previous Governments. That model is about engaging in tax competition across the world to attract multinationals to this country, regardless of the impact on society, employment or anything else. It basically seeks to get them here with an offer that they pay no tax. There is a headline rate of 12.5%, but they do not pay anywhere that amount. Apple, Google, Facebook and so forth are paying approximately one tenth of that, or less. Now we are introducing a new regime with the knowledge development box, modelled on the British model, to facilitate them paying even less.

It is estimated that this will cost €50 million. That is equivalent to all of the increase in capital spend on housing in the budget. If that had not been introduced, the Government could have doubled that capital spend. Furthermore, will this figure expand? Will it cost more than €50 million this year? Will we be budgeting for €100 million for the next year and €200 million for the following year? Will this become the scheme that is central to selling Ireland as an attractive location for big multinationals, on the basis that they will not actually have to pay their corporation tax here?

I refer to the petroleum production tax. It appears to be a marginal improvement. However, if anything it highlights the incredible giveaway that has taken place in this State, particularly under the change of terms under former Minister, Ray Burke, and former Taoiseach, Bertie Ahern, whereby Shell, Statoil and other major multinational oil companies, really dirty big oil companies, were told they could have oil and gas for nothing. There are approximately 20 billion barrels of oil equivalent in Irish waters. At today's low prices that is worth approximately €1 trillion. Ireland has one of the most attractive regimes in the world in terms of a lack of taxation, a lack of royalties and so forth. Companies are allowed to write off all their exploration costs and so forth against their corporation tax. This tax will not change that. It will not make a fundamental difference.

Successive governments have presided over a massive giveaway of huge amounts of natural resources and have denied that they were there. We must have an alternative. That involves taking them into democratic public ownership, developing a State exploration company and, in particular, having a responsible attitude to what amount of oil and gas is taken from the ground. This world does not need more fossil fuels and we might be better off leaving it there.

To conclude, there was and remains an alternative. All the Thatcherite dogma of the Government is simply not true.

The AAA budget statement outlined how the Government could have reversed all of the cuts that have taken place in health, education and social welfare, and cut the regressive taxes on ordinary people, and it could have done it by going after the wealth that exists in our society through income tax, financial transaction tax, millionaire's tax, corporation tax and so on.

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