Peadar Tóibín (Meath West, Sinn Fein) | Oireachtas source

Incredibly, some 140 companies pay 70% of all corporation tax. The focus on this narrow sector of society reminds me of the focus on another narrow sector of society - the construction industry - some years ago. The Government has created an unbalanced economy, with 90% of exports coming from the foreign direct investment sector. Countries like Denmark and Austria provide approximately 40% of their own exports indigenously. We provide 10% of our exports indigenously. That leaves us extremely exposed. Exposure to shocks is an instability in itself. If, God forbid, the US President who is elected at next year's election in that country decides to change significantly the tax scenario upon which this country focuses its strategy, that shock could significantly reduce both the tax base on which we have become more dependent and this country's level of exports, which make up a considerable element of gross domestic product.

I would like to make another point in response to the Minister of State's remarks about "stability". The Irish Fiscal Advisory Council has spoken about an output gap. We have gone from a very high peak in the Bertie days to a very deep trough in the era of the current Government. There is a degree of pent-up spending. There is also deflation because of the recession that occurred. That, accompanied by the Government's gouging of billions of euro from the economy, has led to the significant but volatile bounce-back we are seeing at the moment. The Irish Fiscal Advisory Council is of the view that the output gap is shrinking so much that an inflationary aspect would emerge in this country's economy if €4 billion were taken out of personal taxation in the form of the universal social charge. In other words, the accentuated pro-cyclical system we are in would continue. The Government's policy for taxation over the next five years is to take €4 billion out of personal taxation in the form of the universal social charge.

If the Government does that, then, according to EU rules, the money will have to be taken from public services. Therefore, not alone is the Government destabilising the economy and shifting the stability of the taxation base in doing so, it is also destabilising future public services.

Another issue raised by the Irish Fiscal Advisory Council in the context of stability relates to the fact that mid-term forecasting by the Department of Finance is not accurate. The council said the Department needs to use more accurate tools and highlighted the inaccuracy in the corporation tax estimates. Interestingly, anybody who took an interest in the banking inquiry would be aware that one of the main issues arising was that the forecasts of the Department of Finance were not accurate. Fortunately, a significant level of external factors are blowing behind the country and bringing it to a healthier economic space. These factors include low interest rates, favourable exchange rates, quantitative easing - which is flushing cash through the system - and low oil prices. However, we should not forget that in Bertie Ahern's time as leader of the Government, there were extremely low external interest rates blowing behind the economy and we had little control over those.

What we need to do to create stability is to create a stable, indigenous export sector, which hardly exists here at present. This sector is very small in comparison to those of countries of a similar size. We also need to ensure we have a broad taxation system that focuses on ability to pay. In the 1980s, a school of economic thought existed which suggested that taxation would be better levied based on the ability to pay. The Government has sought to divorce itself from that concept and separates taxation from ability to pay and the reason this Bill is before us is the failure in that regard. When the Government introduced the property tax, it stated that property was a form of wealth and income within a household and, therefore, that it is a reasonable way to focus on the wealth or income of a family. However, the truth is the crash we have experienced has sundered the value of houses and the income or wealth of families. For example, people could face a property tax on a house worth €300,000 but they could owe €400,000 on that property. In that case, the property tax is a tax on their debt, which is incredible.

I know a pensioner in my constituency who worked all her life but who finds things tough. Her heating oil was stolen from her tank during the summer and she had to replace it. In order to be able to afford that, she stopped getting up early and now gets up around noon, thereby saving money by not having breakfast. She has a small lunch and then goes to her daughter's house where she has dinner. She has done this to save enough money to get the oil to heat her house. Despite her low income and circumstances, this woman must pay property tax.

We now face an extreme situation where tens of thousands of people throughout the country are knee-high in water, with farms waterlogged and people in extreme difficulty. Some of these individuals cannot even live in their houses at present.

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