Éamon Ó Cuív (Galway West, Fianna Fail)

Exactly. I hope that, subject to the normal checks, Garda clearance and so on, we can increase the number of home visits, day care centres and so on. Those involved in these schemes are often very good at this work which they are very willing to do.

A point was made about the price of electricity going up. It is a fair one, which is why it was vital that we were not sneaky and did not cut the electricity allowance by reducing the number of free units. If the price of electricity goes up, the Department will meet the extra cost. When one looks at the list of items we did not touch, one can see we were strategic on behalf of the most vulnerable. The fuel allowance, the household packages and the free travel scheme were not cut. If the price of fuel for vehicles goes up, one will still have one's free travel card and the State will meet the extra cost. If electricity or telecommunications charges go up, the State will bear the cost. We did not touch many elements of the social welfare package which are much more expensive than is realised.

I know this is not a debate on tax but reference was made to high earners. There is a theoretical argument which I accept. We wanted to rationalise the PRSI scheme, a matter which is very relevant to this debate, and apply a figure of 4% to everybody in order that one could deal with the issue of the universal charge and the tax system in a coherent way, something we have avoided doing for a long time and which created glitches in the system. We have abolished the €75,000 threshold and said the figure is 4% for the self-employed. I accept that, because of the way the various systems interact, a small group earning more than €200,000 could, theoretically, make a modest saving. However, one must ask the following question if one wants to be fair. How do the people concerned avoid paying very large amounts of tax and, effectively, get away with paying low rates? The rate was 55% for the self-employed and 52% for employees but now it will be 52% for everybody. People got away with paying low rates of tax through the use of tax shelters and investing large amounts of money in pension schemes. They were the two ways the super rich, in particular, and the self-employed millionaire avoided tax. We considered that, by eliminating tax shelters, there would be a tax gain. People are worried about a possible loss of 3% on a very small portion of income but, by making a 52% gain on a large portion of income, one is significantly increasing the tax take. Similarly, by moving step by step on pension contributions, one will make a huge gain from the very well-off. Hitting them for the full amount of tax is much more effective than making a adjustment of 2% or 3% at the top rate of tax. Therefore, when one looks at the analysis of the budget, one will find people have been hit in the pocket, rightly so.