David Cullinane (Sinn Fein)

Part of the problem is that we have had four austerity budgets in recent years. The Fine Gael Party and the Labour Party voted against those four austerity budgets because in their view they were unfair, penalised working people and targeted people who were out of work. People on social welfare, on disability payments and older people had their entitlements cut. Generally, the then Opposition parties, the Independents, Sinn Féin, Fine Gael and Labour members said that approach was not working, that we were dipping into the pockets of people who could not afford to give. Those same parties who are now in Government joined with Sinn Féin in saying at that time that an alternative was needed, that we should focus on those who could pay more and who should pay more. One of the Government parties supported our proposals of a 48% tax rate on those with an individual income in excess of €100,000. That measure alone would bring in €400 million, yet what is being proposed with this household charge brings in almost half of that figure.

This is about fairness and whether we are targeting those people who have suffered enough. That should be the context, aside from the fiscal proposals in the budget. Last month a senior unguaranteed, unsecured bond of €700 million was repaid and signed off by the Government. A sum of €1.2 billion more will be paid in January 2012, at a time when we are cutting the disability allowance, child benefit, rent supplement, the lone parent's allowance, again targeting people who will be affected by this charge. The fundamental problem in Ireland is that we are moving away from the principle of fair, just and progressive taxation. We are moving more towards stealth, flat taxes. Again the then Opposition, now Government representatives, joined with us in Sinn Féin in opposing the universal social charge when it was introduced. It was opposed because it was an unfair flat charge and yet the Government is bringing in a flat charge of €100 for households. If somebody earns €3,000 a week, he or she is being asked to pay the same as a person who earns €300 a week. Where in God's name is the fairness in that? It is not fair and there are many alternatives that have been presented to Government where wealth could be targeted, capital gains tax, capital acquisition tax and modest increases in those taxes would raise significant money. For example the 1% wealth tax that we in Sinn Féin have proposed on all assets in excess of €1 million, excluding working farmland, business assets and 20% of a person's primary residence would bring in significant sums of money. We would say it could be €800 million.

A simple measure that the Government could adopt is to standardise all tax reliefs, including tax relief on pension payments. If we would do that, it would mean everybody would avail of tax reliefs at the standard rate of 20% rather than the marginal rate of 41% for top earners. That would raise an incredible €700 million. There are opportunities for the Government to save money and to raise extra revenue. While those on the Government side are shaking their heads and now saying no, when they were in opposition, they were saying something completely different. That is very interesting.

When reading through the Labour pre-election manifesto, I saw no reference to a flat household charge, but there was opposition to the universal social charge and the notion of flat charges. Today the Minister for Finance will take to his feet and introduce a 2% increase in VAT which, coupled with the proposed charge of €100, will devastate the retail sector. It should be noted that 55,000 jobs in the retail sector have been lost since 2007, 40,000 more are at risk and those jobs are at risk because we are targeting the same people. When will the Government learn that for those who have given so much, the well is dry? Now €100 is a significant amount of money for many families, and it is not just this €100 charge. Last week we discussed the €50 charge for registration of septic tanks. People will be also affected by all the other cuts in the budget and the increases that we will hear about today. It is the cumulative effect of what the Minister is proposing to introduce in terms of this charge and changes in the budget, which is having a negative effect and scaring the life out of many working families and those who are out of work and are struggling to pay their bills, mortgage and to provide for their families. Yet, the Minister is not looking at the genuine alternatives which are being presented to the Government, which the Labour Party supported when in Opposition but seems to have abandoned now that it is in Government.