Joan Burton (Dublin West, Labour) | Oireachtas source

On the amendment but more particularly the budget and the subject of USC, what was missing from the Taoiseach's speech at the weekend and budget 2019 was a reference to the enormous population changes happening in Ireland. The demographic changes taking place here are in sharp contrast to what other European countries are experiencing. While they will provide a great boon for Ireland, it would be very foolish for any party to suggest the enormous increases in the numbers of older people and children will not be costly, particularly in areas such as health and education.

In the context of USC, there is a lot of merit in looking back to what was in place before the charge was introduced. If we are serious about Sláintecare, for example, which has received cross-party support and the development of a national health service in Ireland, we need funding streams. However, we cannot just say, as the motion implies, that a couple earning €100,000 should be taxed at a rate of 50%. That would be way out of line with what ordinary people could bear. In the original paper written by the ESRI USC was described as a universal social contribution. When I was in government, I proposed reducing the USC burden on individuals or couples with an income of less than €70,000. USC, as originally proposed approximately 12 years ago, should be converted into a universal health contribution, with the funds raised to be used for the establishment of Sláintecare. A specific fund for its establishment and some funding earmarked for the HSE over and above that provided by the Minister for Finance every year would allow for planning to meet the growing demands on the health service. When I was in government, medical cards for the under sixes were introduced. As I understand it, the Minister agrees in principle that medical cards should be provided for children under 12 years and then children under 18. We should also bring down the age at which older people are entitled to receive a medical card. In that way, we could provide universal medical care for most of the population. By all means, the Minister should review USC, but at this time, given the demands on the Exchequer on foot of population growth and an ageing population, it must be accepted that the financial position is still quite tight. Rather than abolishing USC, we should earmark the funds generated for spending on health services.

The Taoiseach made a lot of comments at the weekend about the self-employed in the context of payment of income tax. That is fine, but it is important to bear in mind that the Government has not yet implemented the recommendations made in a report on bogus self-employment that I commissioned when I was in office. The report examined the incidence of people who were not declaring themselves to be employed but forced to declare themselves as self-employed. The PAYE tax credit was introduced to provide for an element of fair play for PAYE workers vis-à-visthe self-employed. As the Minister knows, self-employed persons can legally write off against tax expenses incurred in the course of employment but those in the PAYE sector cannot.

In fact, we understand the Minister is about to abolish the origins of the very small allowances for those who work in the retail sector, including shop assistants. They are in place to provide for a small evening of the scales as a consequence of the significant allowances available to the self-employed. This is all about balance and fairness and raising sufficient amounts of money in a fair way from the tax system to allow us, as a country, to do the things we desire. The way the amendment is worded, were the Minister to carry it out, it would certainly be a bonanza for his officials, particularly in the case of somebody like the deputy manager of a retail shop who is earning about €60,000 and whose partner or spouse is perhaps earning about €40,000. The suggestion is their tax liability would be upped to 50%, which is pretty draconian. That may not be the purpose of the amendment, but that is what it is stating.

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