Michael McCarthy (Labour)

I would also like to raise the issue of the Government health levy announced by the Minister for Health and Children yesterday. This is another form of indirect taxation and another attack on hard-working, hard-pressed families who have been screwed by the budget in a number of different aspects. It gives a lie to the Progressive Democrats myth that we have a low tax economy. It is another attack on those who are feeling the pinch of the downturn in the economic fortunes of the country. The levy represents an average increase of 25% for an average family of two adults and two children. The Minister stated she "hopes the cost would not be passed on to consumers". If this was not so serious, it would be funny. That is like saying she should go to Knock and pray for it. Unless there are legislative proposals to ensure this cost is not passed on, it will be.

This reflects the issue of the banks and the reduction in the ECB rate. The Minister for Finance said he hopes the banks will pass on the reduction to mortgage holders, but the Government should ensure they will do so. It should also ensure the levy is not passed on to hard-working families. No one argued this issue should not have been examined because intervention was needed to ensure elderly people with health cover were not penalised. However, a balance should have been struck. More information will need to be gleaned when the detailed legislation is published and this will lead to more awkward questions.

Those affected by the levy are paying huge mortgages and have experienced huge increases in repayments in recent times. They purchased houses that were over-priced in the first instance. Their children are attending third level institutions and they are facing the possibility of the Minister for Education and Science reintroducing third level fees. That issue is very dear to the hearts of those on this side of the House and, I am sure, others also. The abolition of third level fees was a policy initiative of the rainbow Government, of which we are very proud. We abolished third level fees to ensure those from less well-off backgrounds would have the opportunity to attend university. There is an ideology among some members of the Government, first mooted by the then Minister for Education and Science, Deputy Noel Dempsey, who was bailed out by the then Tánaiste, Deputy Mary Harney, of re-introducing third level fees. When the Government cannot do that, it does it by stealth by raising university registration fees, thus reintroducing fees by the back door.

These families to which I referred have to deal also with the increased health levy and a 1% income levy. Their jobs were safe until the previous general election but they are looking to 2009 with no degree of certainty in that regard, given the downturn in the construction industry which has affected many of these families in that they do not now have job security. These people also pay PRSI. The original spirit behind PRSI was to cover education, social welfare benefits and health. A family paying VHI premia will see them rise by 25% on top of paying PRSI and the 1% income levy. When will it stop for families like this? When will we see any form of Government action which will help these people out of their economic difficulties rather than push them in further?

I agree with Senator Frances Fitzgerald that the decision by the Government to reduce funding to the Equality Authority by 43% is a disgrace, as is its decision effectively to dismantle the Combat Poverty Agency. Is it a coincidence that these organisations, the public watchdogs which were critical of the Government's policies, are the targets of its cuts?