Dan Boyle (Green Party)

In the times in which we live, the distinctions between politics and political parties are becoming ever more blurred. As politics moves increasingly towards the centre the traditional ways of defining policies as right wing and left wing are becoming more irrelevant. The distinctions in politics today are exemplified by the election of President Barack Obama, and are the politics of hope and the politics of disillusionment. Unfortunately, in the times in which we live, and in our own country, the politics of disillusionment are holding sway.

We see how these politics play in other jurisdictions and how it helps the rise of racist and xenophobic politicians and political parties. It also leads to a type of politics which is about quick and easy solutions to the depths of problems that have not been faced in generations. We find ourselves in this Finance Bill, the second in an eight month period, trying to deal with the scale and depth of those particular problems.

It can be fairly argued what has been proposed and put in place now represents short-term solutions to immediate problems. I do not think they can be argued in any way, however much other political parties may try, as an attempt to cause offence or create greater economic disharmony. There are international economic factors at work, and we have our own indigenous factors that have made the situation in this country worse. We require a radical change in how we structure our economy and make decisions about it, and this Finance Bill, building on the previous one, is a sincere attempt to do that.

Those who prefer to practise the politics of disillusionment will live on soundbites and play to prejudices, but will avoid answering, in public at least, how they would respond in similar circumstances. The reality is the situation would be the same whoever was in Government, and the room for manoeuvre in dealing with the situation would be as small.

It is fair to compare the current circumstances to those which existed in 1987. Much has been made of the Tallaght strategy, when the incoming Fianna Fáil Government took the budgetary parameters of the outgoing Fine Gael and Labour Party Government, and the new leader of Fine Gael at the time, Alan Dukes, was seen to facilitate that. The reality was the incoming Government would probably have acted in the way it did anyway, because the room to manoeuvre was so painfully small, just as it is now.

The gap between what we receive in our taxes and intend to spend, an expectation that has arisen during the Celtic tiger years, is so vast we can use the three mechanisms available to us, that is, cut expenditure, increase taxation or borrow more. It has not been admitted in the last 18 months that the mechanism which has been used most by Government and which has the longest impact for future generations in terms of paying back, is borrowing more than we have additionally taxed and cut services. That will still be the mechanism chosen, because to do otherwise would have a serious affect on public services.

The measures in the Finance Bill, particularly the levy, represent a short-term response to the immediate situation. I welcome the fact the levies, in their second incarnation, are far more progressive than when they were originally introduced. They include many anomalies, as Senator Quinn has said, and it is possible some of them can be addressed when we look at the Bill.

I suspect most can only be addressed in the context of next December's budget and the following Finance Bill, because we need the report of the Commission on Taxation, which, I am proud to say was an input from my party in the programme for Government. When the commission issues its report, including its recommendations, what is accepted and included in a future budget and Finance Bill will be the means that can iron out many of the anomalies which have been introduced as a result of the introduction of both levies.

It is fair to say the amount of change in taxation brought about in such a short time has probably been the largest shift this country has ever seen. It is too large an increase over too short a time period. Yet, when one looks at the basket of taxes collected in this country, including income tax, VAT, capital gains tax, corporation tax and money gained through social insurances, we still collect less in the total combination of taxes than any other European country. Despite this, we have an expectation that our services should be similar to those in other EU countries. I am afraid we cannot do that. We cannot have an economic recovery and the sense of expectation of the highest possible public services with taxes that are below the European norm. The problem we have with our taxes, which I hope the Commission on Taxation will be clear on, is that we collect the wrong taxes in the wrong way and in ways which affect disproportionately the wrong people. People who are on low incomes and different types of income are affected disproportionately, and we need a fairer, more effective and efficient taxation system.

It is a debate which will arise in next year's Finance Bill. This Bill is a series of short-term measures to address the immediate issues facing us. It could be fair to say it is a sticking-plaster approach to the economic difficulties we have. It is necessary. The fact the European Central Bank, the European Commission and the ESRI have talked, sadly, about these measures being necessary shows confidence the Government and the Minister for Finance, Deputy Brian Lenihan, are doing the right thing.

It is also confirmation that any alternative Government or Minister for Finance would have to do the same thing. That is the reality. Senator McCarthy can mutter under his breath, but the reality is that unless the Opposition can say, if there was a new Government tomorrow, which of these measures would be changed and which alternative measures would be put in their place-----