Michael D'Arcy (Wexford, Fine Gael) | Oireachtas source

I am grateful to have the opportunity to speak to the Bill and want to touch on a number of issues. We have heard a lot of talk today about equal pay and the full restoration of pay in the public sector. I do not know many people who would have an issue with this. The only difficulty, as with everything, is the cost. The figure we have been given for full restoration of pay in the public sector is €1.4 billion. That is the full amount available in the budget for social protection measures and everything else, including modest tax breaks. That €1.4 billion cannot possibly go to just one sector, nor should it. It is important that it also be understood this is a cost that would apply every year.

I support the reduction in the universal social charge. It was supposed to be a temporary tax, as was income tax when it was first brought in in the United Kingdom. While Fine Gael has a proposal to phase out the USC, I do not know how realistic it is, given that it brings in an amount equal to 25% of the income tax budget. It is a huge amount of money.

Everything we have tried to do in the budget and the budgets since taking office in 2011 has been aimed at getting people back to work. We cannot ignore this. Those on the Opposition benches, particularly those on the left and the hard left, castigate us for supporting jobs and trying to make the environment better and more conducive to the production and facilitation of jobs, without which we would have nothing - no income tax and no one to provide services. The USC and VAT would not be paid and expenditure, reduced. Members on the Opposition benches do not seem to grasp this. All they want to do is throw mud that we are pro-business and pro those who provide jobs. We certainly are. When the crash occurred and jobs were lost, the tax take went down.

One area which is not getting sufficient attention is local government. The local authorities have an important role to play in economic development. Each local authority, whether it be in Wexford, Tipperary, Dublin or elsewhere, has a role, but, at the same time, it does not have the funding base to impact sufficiently on economic development. While local authorities may know that there is a space that could be filled and thus encourage job creation, they have to try to find a funding stream to fund a capital project. There is an example in New Ross, County Wexford, where a superb tourism project, the Dunbrody project, requires money. Those involved have to go to Fáilte Ireland, the Minister for Transport, Tourism and Sport and similar bodies to seek funding. The local authority should have an amount from a national pot of money broken up into equivalent amounts for authorities of different size. That money should be made available outside normal local authority resources and local property tax proceeds. Each local authority would spend the money wisely and well. It is an issue at which we will need to look in future budgets.

I welcome the additional social protection payments, given that there are groups who were impacted on and who have had not received a raise in years. I make the point that it is those in the squeezed middle who pay for almost everything. The income tax take in 2011 was a little over €12 billion, whereas in this budget the figure is over €20 billion, an increase of more than €7 billion, or 55%, in the moneys coming in directly in income tax. As we have said all along, we are not satisfied that this is the best way of doing it, given that increased income tax is a tax on jobs.

I welcome the allocation of €150 million for the farming sector, given that cash flow has been hugely impacted on. It is important, when the banks sit down with officials of the Department of Agriculture, Food and the Marine and the Strategic Banking Corporation of Ireland, that the criteria be such that the money will go to those who require it.

I support the Minister for Housing, Planning, Community and Local Government, Deputy Simon Coveney's plan for the housing sector, Rebuilding Ireland. I also support the first-time buyer's grant. Of course, it is important that it go towards the right areas and I believe it will be.

I have spoken to a teacher in the community school in Gorey who is striking today, although they do not want to strike. I explained some things that are very important. We are closer to the next recession than we are to the last one of eight years ago. There will be another recession before the next eight years are out. In 2007 the national debt was €40 billion; it currently stands at over €200 billion. We have to deal with the facts. Everybody thinks most or all of that €200 billion is due to the banking sector, but it is not. It accounts for some €30 billion of it; the remainder represents the moneys we have borrowed for day-to-day spending. Therefore, we did not have a Greek-style recession, with people living in real poverty. The reason we did not have it is we were allowed to borrow our way of the last recession.

The difficulty for this and future Governments is that we will not be allowed to do that in the next recession because of the fiscal compact rules and the treaty agreed in 2012 on foot of the referendum. The reality is that, in the next recession, adjustments will be in the form of tax increases and reductions in services. When I explained it to the teacher in question, they were unaware of it. We are failing in getting our message across that these are the confines within which the current and subsequent Governments must operate. It is important to get across the message that if we act prudently today, we may not have to cut as deeply and widely as anticipated. In this way, we may ensure cuts and reductions of the type we experienced before will not occur again.

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