Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

As the Minister said, all of the data on distributional impact and the number of people paying are available on the website, and the options to reduce the burden are well known. Nonetheless, it is good that Deputy Moynihan has put down this amendment because it allows us to discuss the issue.

I was looking forward to hearing the Minister's contribution in opposing the amendment from the Rural Independent Group, which I would have opposed myself. I would be interested in hearing the Minister's comments because the Rural Independent Group argued that we should exempt the first €70,000 in earnings from USC, which was very similar to Deputy McGrath’s own proposal when he argued and campaigned for the first €80,000 to be exempt from USC. It would be interesting to see how he found his way in regard to that one. It was very much a populist move by Fine Gael to abolish it, whereas Fianna Fáil said it would abolish it up to €80,000. In fairness to the parties on the left, they argued that we have to retain the USC but take those on low incomes out of its clutch.

Deputy McGrath is now the Minister for Finance. The problems arise for people on average incomes in the State. Let us be clear about this and put the CSO data on the record. The median is the best way to average this, given the high wages in some sectors. The median wage in the State is €33,516. When we talk about average incomes, we are talking about that area. If we look only at those in full-time employment, which is very unfair, the average wage would be just €41,000. This is very important because that shapes the narrative in terms of Deputy Moynihan’s point on the impact on low- and middle-income workers. With regard to the USC proposal, a middle-income worker benefited by €92 compared to somebody who earned twice that, who benefited by €292. If we look at the total tax package, that difference of €200 increases to €400.

That is the problem with this Government’s proposals in that those who need it most are the people who did not get it in this budget. Most people welcome a tax cut, particularly during a cost-of-living crisis, and we recognise that. However, the elected representatives in this Chamber did not need a USC tax cut whereas many of our constituents did. The problem is that we got the higher end while many of our constituents got €92; in fact, half of the population who are working got €92. That is a problem in terms of the fairness that underpins this proposal.

When the previous version of the Minister, Deputy McGrath, was arguing about getting rid of the USC tax on incomes up to €80,000, in fairness, he made the point that Fianna Fáil would start by abolishing the lower rate and slashing the second rate, and he said that would be his priority. Now, in government, he has done the opposite. He had made the point that that approach would benefit those on low incomes and that, over five years, he would get rid of it altogether for incomes below €80,000. That was reckless but at least that starting point recognised that those who needed it most would get it. That is not what has happened in the tax package that has been proposed or in how the Minister dealt with USC in this budget. There was a much fairer way to deal with that, which Sinn Féin put forward, and that was abolishing the lower rate and cutting the second rate in half, which is what the Minister proposed back in the day, before he was in ministerial office.

I make that point because there has been abuse of figures in the past. We heard the Taoiseach, Deputy Leo Varadkar, at his event at the weekend say that average earners were €6,000 better off due to the tax changes proposed in this budget. Average earners are on €33,000. The increase in the bands does not affect them whatsoever because they earn too little to benefit from the increase in the bands. Those who are full-time employees did benefit from the increase in the bands but half of the population does not get the full benefit of it. That is the problem. Again, it is about how the Minister's tax measures are targeted, who they are targeted at and who gets the most benefit. It is important when talking about average income earners not to exclude people who are working part-time, which is unfair. We should not talk about full-time workers as if we do not value those working part-time, who perhaps cannot find a full-time job or are providing care for someone at home and out doing 20 hours of work with a business.

The figures are the figures and we should not suggest they are not. It is important to understand that the impact of these figures is that lower and middle income earners, for whom the median is the best calculation, actually benefited by €92 in regard to USC, while higher income earners benefited by €292. That is not fair in my book or in anybody's book.

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