Micheál Martin (Cork South Central, Fianna Fail)
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Yesterday's budget was strong on rhetoric and somewhat poor on substance. There are many issues one could discuss such as the lack of initiatives on small-to-medium-sized enterprise, the lack of transparency on the health Estimate, water charges and the lack of a substantial public investment programme, but my focus this morning is on the tax changes introduced yesterday. Without question, they are unfair and disproportionately benefit the wealthy and discriminate against low-paid workers. A worker earning €17,500 a year will only gain €174 for that year, which does not include the water tax. Someone over €70,000 or someone on €150,000 will actually get €746 of a benefit. We live in a low-wage economy and there are approximately 660,000 people earning between €10,000 and €30,000. Most developed societies are moving towards low-wage economies and governments must intervene in a positive discriminatory manner to improve the lives of people on very low incomes. A couple with a single earner on €41,000 will still only get €174 whereas a single person earning over €70,000 will get €746. That is not to mention the impact of water charges, which will by definition impact to a greater extent on low-paid workers and low-paid working families.

In relation to the tax question, I ask the Taoiseach a basic question. Does he think it is fair that someone on €100,000 plus gets €746 whereas someone earning less than €30,000 only benefits by €174? Is that a fair way to do business? Finally, what is the net figure the Government will receive in revenue terms as a result of the imposition of water charges?

Enda Kenny (Mayo, Fine Gael)
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We signalled very clearly that the mandate given to Government was to fix our finances and get our country working. As far back as early summer, we indicated that the priority in respect of tax was to deal with the crushing burden of 52% imposed on workers through a combination of dealing with the tax band, the USC and PRSI. Deputy Martin asked me if it is fair. It is very fair to say that Government set out with the specific objective of reducing that burden so that the tax changes being made over the next three years will result in approximately 15,000 extra jobs being created over and above what might normally come from growth. That is very different from the 52% tax burden imposed by Deputy Martin's own Government which made the country uncompetitive, unattractive and not fair in the sense of the proportion of tax people had to pay. Deputy Martin's Government did this while borrowing to go to €15 billion with rising interest rates and at a time of out of control emigration and unemployment falling off the cliff. What we have said is that the changes in the tax system - the reduction in the rate and the increase in the band - are designed to create 15,000 extra jobs over three years. The path out of unemployment and poverty is job creation. This is the start of a three year programme of tax changes designed to do that. It is an entirely different matter from the perception that is being put abroad that tax changes are in some way related to the issue of the provision of Irish Water and water for businesses and consumers.

We said very early on that we needed to change the tax system to reduce the burden of tax on people. We have taken serious numbers - 80,000 - out of USC at the lower level. For those who still have a tax liability, there is a reduction in the USC at the two lower levels. In the first budget the Minister for Finance, Deputy Noonan, brought in, 330,000 were people taken out of USC altogether. The increase in the tax band will take many thousands more out of the higher rate of tax liability altogether. Beyond €70,000, it has been between €30,000 and €70,000 that has been the area where people have had to pay all of the sacrifices, all of the charges and it is there that the priority impact of the budget has been. The tax changes are the first of three years to bring about a reduction in the rate of tax and other adjustments that will create 15,000 jobs over and above anything that occurs in the normal way.

Micheál Martin (Cork South Central, Fianna Fail)
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The Taoiseach did not answer the specific question I put to him. Is it fair that someone on €18,000 gets €174 a year before he or she has to pay the water charges while someone on €100,000 gets €746? That is the basic proposition I put to the Taoiseach and I asked him a very simple question. Is that fair? I asked the Taoiseach a second question, namely what is the net revenue figure expected from the water charges regime. The Taoiseach did not answer that.

To come back to the first question, there are more than 660,000 people earning between €10,000 and €30,000 in our society today. The Government has taken a deliberate decision to ignore them. That is what was decided in the budget yesterday. When one puts in water charges and so on, they will not be better off as a result of the budget, they will be worse off. That is the bottom line. The Taoiseach took a political and principled decision to ignore people earning less than €30,000 and he did so to favour people earning over €70,000, over €100,000 and over €140,000.

Does he believe it is fair that someone on a low income will receive €174, while someone on a high income will get €764?

Timmy Dooley (Clare, Fianna Fail)
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As well as the fact that the Labour Party agreed to it.

Enda Kenny (Mayo, Fine Gael)
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I have already pointed for Deputy Micheál Martin to the plan we have set out to change the burden of 52% tax imposed on people. Deputy Micheál Martin is aware that this is the first step in this and the next two budgets to reduce the 52% level of tax. The increase in the threshold above which the universal service charge, USC, becomes payable, at €12,000, will remove a further 80,000 from the charge, a move that will benefit lower paid workers, on top of the over 200,000 taken out in 2012.

Timmy Dooley (Clare, Fianna Fail)
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What about those who will benefit by only €174?

Enda Kenny (Mayo, Fine Gael)
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Over 400,000 people will now have no liability for the USC. A further 33,000 will be removed from the higher rate of income tax as a result of the increase in the bands introduced yesterday. The 1% cut in the 52% tax rate will benefit 635,000 middle income earners. For earnings above €70,000 and €100,000, two new rates of USC have been introduced. While everyone benefits from the reduction in the tax rate, for those earning above €70,000 and €100,000, that is set aside by a higher increase in the USC.

Timmy Dooley (Clare, Fianna Fail)
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Unless they are paying at the higher rate.

Enda Kenny (Mayo, Fine Gael)
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The emphasis has been on lower paid workers and middle income workers from €70,000 down.

Micheál Martin (Cork South Central, Fianna Fail)
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That is the opposite, as every commentator has acknowledged.

Enda Kenny (Mayo, Fine Gael)
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That is where the priority is. For two middle income public servants, the saving will be about €100 per month.

Timmy Dooley (Clare, Fianna Fail)
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They are the ones the Government has gone after.

Enda Kenny (Mayo, Fine Gael)
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The billing process for Irish Water will commence from October. There will be a surge in applications to be registered before the end of October. Until we have the absolute numbers registered for the household charge, as a consequence, we cannot determine what the actual level of income will be from Irish Water until the bills are issued and paid.

Micheál Martin (Cork South Central, Fianna Fail)
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Does the Taoiseach have an estimate for it?

Enda Kenny (Mayo, Fine Gael)
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Yes.

Gerry Adams (Louth, Sinn Fein)
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The Taoiseach is not very convincing on this issue of fairness. Yesterday, the Government had the opportunity to relieve the burden on long-suffering families by getting rid of water charges, the family home tax - the property tax - and taking the lowest paid workers out of the tax net. However, it decided not to do any of this. Instead, the Taoiseach put his own very conservative interests and electoral ambitions before the interests of the people. His budget lacks ambition, vision and inclusivity. He does not deal with the crisis in employment, health or housing. Half a million people have been forced to emigrate in the past eight years, at huge human cost to society, communities and families. However, the Government did not deal with this. There is no fairness in its budget. There is not even the pretence in the Taoiseach’s answers or his Minister’s statements yesterday to deal with citizens on the basis of equality. That is why he is not convincing in responding to these questions.

One in seven people is at risk of poverty. One in four lives in a jobless household. The people concerned cannot afford to pay the Government’s water charges or property tax. Even middle income workers whom the Taoiseach claims will benefit from the budget will have their modest benefits offset completely by the upcoming water charges. The Taoiseach will be four times better off than a married couple with an income of €35,000. That is the truth of the matter. That is his choice, as well as the Labour Party’s. He cannot blame anyone else. Does he believe it is fair that he will be four times better off than a married couple earning €35,000?

Enda Kenny (Mayo, Fine Gael)
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The Deputy has lost the measure of credibility. He has come into the Chamber time and again with his budgetary proposals which have a €550 million hole in them. Yesterday, he called for property tax and water charges to be abolished, but he had no proposition for how these services would be provided other than increasing corporation tax and introducing a 78% rate of income tax.

Emmet Stagg (Kildare North, Labour)
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Deputy Gerry Adams will not have to pay charges on any of his three houses.

Enda Kenny (Mayo, Fine Gael)
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He should not come in here to talk about credibility or being convincing. He presented his budget propositions with a massive black hole in the middle of them. He goes around the country saying, "Pay for nothing; all these services should be free of charge."

In its budget proposals, the Government has set out how it will deal with the questions of poverty, unemployment and employment. The best way to deal with the issue of poverty is to give a person a job. The previous Government imposed a 52% tax burden on workers, which made us uncompetitive and unattractive to further investment. It was an issue that needed to be addressed for a long time. This is the first budget in which there have been no tax increases or spending cuts. It was the Government’s decision to set out to reform the income tax system and start the process in the budget through a reduction in the rate of tax and an increase in the bands. That applies across the board. Owing to the fact that the priority is given to middle and lower income workers, those earning above €70,000 and €100,000 will pay an increased USC rate to make it perfectly obvious that priority is given to those earning less than €70,000. We have taken a further 80,000 workers out of USC liability. For workers on lower incomes, there have been reductions in the two lower bands of USC. Owing to the increase in the income tax band, a further 33,000 workers have been removed completely from the higher rate of income tax liability.

That is the start of the first three years of reform of the income tax process. It is designed to create an extra 15,000 extra jobs on its own. Unlike Deputy Gerry Adams who wants people to wallow at the lower end and live in poverty, this is an incentive for people to come off the live register, as well as having the confidence associated with having a job and a career.

Peadar Tóibín (Meath West, Sinn Fein)
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What about the Taoiseach’s own tax band?

Enda Kenny (Mayo, Fine Gael)
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This is the first year of three in which we intend to apply it. I believe that is fair.

Michael Healy-Rae (Kerry South, Independent)
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It is an election budget.

Gerry Adams (Louth, Sinn Fein)
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Therefore, the Taoiseach thinks it is fair. Rubbishing the proposals put forward by Sinn Féin in a dismissive way does not convince anyone. We put forward a thoughtful and costed proposal. The Taoiseach might disagree with it because he comes from a different political and ideological position. He has a different view and vision of how Ireland should be governed and society ordered. However, he also talks about the first three years of recovery. Is there not going to be an election sometime in the next three years? Is it not a little presumptuous of the Taoiseach to take the people for granted? Is there not a wee bit of humility required? Is it not part of his notion of a democratic revolution?

Bernard Durkan (Kildare North, Fine Gael)
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Take it easy, Gerry.

Patrick O'Donovan (Limerick, Fine Gael)
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What about the results in Dublin South-West?

Gerry Adams (Louth, Sinn Fein)
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The Government continues to overtax ordinary families. We put forward a fairer budget that would shift the burden of taxation on to revenue sources which would be less harmful to the domestic economy, while ensuring finance for front-line services such as health and education. This would deal with the plight of the homeless, as well as the coping classes and working poor. Abolishing the property tax - a deeply unfair family home tax - would be a massive stimulus for lower and middle income families and the domestic economy.

Joe Carey (Clare, Fine Gael)
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That is only one proposal.

Gerry Adams (Louth, Sinn Fein)
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Stopping water charges would have an even greater effect. The Taoiseach’s proposal for a tax credit of 20% of the water charges to a figure kept at €100 in no way compensates for the impact on hard-pressed families.

I do not know what the Taoiseach does not get about this. It is not that people will not pay; the fact is that they cannot pay. People will not be able to pay their bills next week because of the Government’s stealth taxes. That is what they are telling me in County Louth.

Jim Daly (Cork South West, Fine Gael)
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Are they saying the same to the Deputy in County Donegal?

Gerry Adams (Louth, Sinn Fein)
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That is what the people told the Taoiseach on the streets of Dublin last Saturday. I am sure it is the same in County Mayo, but it is not too late.

There is no point getting up and waffling and rubbishing Sinn Féin. We did it in the North. Domestic water charges were abolished by us in the North.

Patrick O'Donovan (Limerick, Fine Gael)
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Until 2016.

Ray Butler (Meath West, Fine Gael)
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It is cloak-and-dagger stuff.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Members should stay quiet.

Gerry Adams (Louth, Sinn Fein)
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The chorus of hecklers will not drown out the voice of the people on these issues.

Patrick O'Donovan (Limerick, Fine Gael)
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No, just put a balaclava over it.

Gerry Adams (Louth, Sinn Fein)
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People cannot afford to pay. The Taoiseach made his choice and the Labour Party made its choice. The people will have their choice in due course but the Taoiseach can still scrap water charges.

Enda Kenny (Mayo, Fine Gael)
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The Deputy asked if there was an election on the way. There is always an election on the way and the next one is due in spring 2016. At that stage, I hope the Government will have introduced its fifth and final budget of its term of office.

Gerry Adams (Louth, Sinn Fein)
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Yes, final.

Enda Kenny (Mayo, Fine Gael)
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I hope we will continue the progress made in securing the recovery for the future, getting our deficit below 3%, having more than 100,000 new jobs created, giving the opportunity for prosperity and confidence to our people and restoring us to where we should be.

Deputy Adams asked me not to rubbish Sinn Féin and I will not do so. I will give him some facts. Yesterday's budget dealt with questions in education, health and agriculture deliberately raised by Deputies.

Pearse Doherty (Donegal South West, Sinn Fein)
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No, it does not.

Jonathan O'Brien (Cork North Central, Sinn Fein)
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Funding was cut for every school.

Enda Kenny (Mayo, Fine Gael)
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The Sinn Féin finance spokesman came in and made a claim and the Sinn Féin deputy leader ran out of words halfway through and had to evacuate the House because her script was not long enough. Anything for an excuse to get out of the place. In fairness, Sinn Féin said it was providing €300 million to reverse domestic water charges. What it did not do was recognise the €550 million black hole, because its propositions put the cost on the public pay bill. Sinn Féin did nothing about that, yet it goes around the country suggesting the abolition of water charges and property charges.

Sandra McLellan (Cork East, Sinn Fein)
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The Taoiseach did not read it properly.

Enda Kenny (Mayo, Fine Gael)
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Sinn Féin wants to introduce a third rate of income tax, leaving the top rate at income tax at 59% with USC and PRSI. Sinn Féin wants to increase employer PRSI, which is a tax on new jobs, to 15.75%. The additional taxes proposed amount to a 12% increase in taxes on jobs.

Pádraig Mac Lochlainn (Donegal North East, Sinn Fein)
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There are some nervous Fine Gael members.

Enda Kenny (Mayo, Fine Gael)
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Deputy Pearse Doherty, who is an articulate young man, accepted that €6 billion worth of consolidation measures had been introduced over the past number of years but could not say which ones he accepted. Sinn Féin wants to tax the middle group through the back door. Where a son or daughter inherits a house worth €250,000, he or she would pay a further €15,250 in tax.

Peadar Tóibín (Meath West, Sinn Fein)
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If they are not homeless when the Government has finished with them.

Enda Kenny (Mayo, Fine Gael)
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Sinn Féin wants to abolish the marginal rate of tax relief on pension contributions. When Deputy Adams goes back to Louth, he should talk to the garda married to the nurse who are on a salary of €40,000. They would lose a further €800 according to the Sinn Féin proposition. I am not rubbishing Sinn Féin but giving back its figures with a little interest.

Patrick O'Donovan (Limerick, Fine Gael)
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Sinn Féin should let us know when it finds that €550 million.

Joan Collins (Dublin South Central, United Left)
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Is it not the case that any limited gain from changes in direct taxation for those on low to moderate incomes will be wiped out by the water tax in January? Changes in the budget are extremely modest. A single worker earning €15,000 will see a weekly €2 rise in take-home pay, which is barely the price of a cup of coffee. A married couple earning €15,000 with one income and two children will see a €4 increase in their wages per week, which is barely enough for two cups of coffee. Is it not the case that the Government panicked after the massive demonstration combined with the result of the two recent by-elections on Saturday and responded with a series of Mickey Mouse measures to curtail reaction?

The Minister for Finance announced tax relief on water charges at the standard rate of 20% up to a maximum water charge of €500 per household per year. Is this an acceptance by the Government, contrary to what we have been told repeatedly, that some households will pay up to €500 a year in water charges? This is double the amount the Taoiseach repeatedly stated would be the average charge per household. The Minister for Public Expenditure and Reform, Deputy Howlin, also announced a water subsidy worth €100 per year to those on the household benefits package and fuel allowance. However, almost 200,000 people who are short-term unemployed or who do not earn enough to pay tax are excluded from the measure. They were not included in the tax reliefs outlined by the Minister for Finance. Rather than Mickey Mouse measures, why does the Taoiseach not accept the inevitability of abolishing water charges and do so?

Enda Kenny (Mayo, Fine Gael)
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We have no intention of abolishing water charges. The setting up of Irish Water to deal with the provision of water to everyone, including business and consumers, with proper standards and infrastructure has been neglected for far too long. The Government has provided a subsidy to Irish Water of between €550 million and €600 million, which is for every household in the country. This is a household charge. In addition, the allowance of 30,000 litres per household and 21,000 litres per child applies to every household and every child in the country. Beyond that, other conditions apply to people with medical conditions. Those charges are capped.

In addition, the two other benefits announced by the Department of Social Protection for those in receipt of the household benefits package means that, between the tax credit available and other facilities from the Department of Social Protection, they will cover the vast majority of households in the country. From that point of view, I agree that the changes made yesterday were modest. They were never intended to be extravagant and we are not in the position to write blank cheques. In terms of the tax position, what is involved is the first of a three-year programme of changing the income tax system to demonstrate that it pays to work, that work is rewarded, that workers are rewarded and those not in employment have the opportunity to come off the live register and get into the world of work. As they progress up the line from low-paid to middle income earners, that is where the priority of the Government has been. In the next budget at the end of 2015, and if the people decide to re-elect this Government in 2016, the same measures will apply to income tax changes. It is designed to lessen the burden on people, make it more obvious that work pays and ensure that people have a sense of extra money and confidence to invest and spend in their communities. In this way, we can build a society and the kind of country that we know we can have.

Joan Collins (Dublin South Central, United Left)
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Some families will receive bills of up to €500. If they get tax relief of €100, they will be faced with a new austerity tax of €400. An old-age pensioner living alone faces a new austerity tax of €70 or €80 if he or she receives €100 from the Government. We are subsidising a private limited company set up by the Government to raise €500 million and now the State will subsidise the same company with €500 million or €600 million of a subsidy. This is economic madness.

Whatever measures were introduced for the short-term unemployed, this is a tax they cannot afford. That was the message sent out last Saturday when nearly 100,000 people came out from Dingle to Donegal, from Gorey to Galway and from Dublin. They said they would not be able to pay the tax. It was a simple message. One placard said that when the bill comes through the door in January and there is a choice between paying the water tax and feeding the kids, that person would be feeding the kids. That is the message the Taoiseach must take from the protest and the by-elections. Anti-austerity and anti-water-tax candidates took those seats. This is not about elections but about what people have left in their pockets. Any gain in direct taxation has been wiped out by the austerity tax of water. Will the Taoiseach accept the inevitable? On 1 November, people are coming back out onto the streets. We will see if they come out in their hundreds of thousands as they did last Saturday. I hope it sends a clear message to the Government that the tax must be abolished.

Enda Kenny (Mayo, Fine Gael)
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That is why the priority of the Government has been to focus on middle and lower income earners, from €70,000 down, and why the rate of tax was changed.

The band has been changed and we have taken another 80,000 people from the universal social charge, USC, net completely. That means that 410,000 people do not have to pay the USC. Two rates of USC have been reduced to help lower paid workers. In addition, there is the household benefits package, while those with a tax liability can claim a tax credit. That is the start of a three year programme in respect of income tax in order that people can be rewarded for the work they do and an extra burden can be relieved, which means that they can spend more in their own communities.

I understand the challenge any introduced charge brings for many. We have tried to make this as affordable, fair and equitable as possible in the interests of providing proper facilities and high quality water for the entire country. It is different in many places in rural Ireland, where people may have paid for water for years because of the necessity to engage in pipework and so on, instead of having to bore wells on bad land, for example. Therefore, it is an issue. We have tried to make it fair, affordable and equitable, as we need to invest in and fix infrastructure and repair treatment works. In this city we do not want to lose 40% of water through leaks and cannot go on like that. The changes are being made to contribute to the system and they are to be fair and affordable. We will help people in the introduction of changes where they apply.