Michael D'Arcy (Fine Gael) | Oireachtas source

I welcome the Minister of State to conclude the debate on the Finance Bill 2013 between today and tomorrow. It is the crucial legislation in raising revenue for the State.

On Senator Marc MacSharry's points on the 2008 Irish bailout package, Cyprus's deal was deemed so unacceptable that there was not one single vote in its parliament in favour of the package. That should have happened here when the troika came knocking on our door. The deal done at the time of our bailout was so harsh and unacceptable that the Government which has taken up the mantle from the previous Government has tried to reorganise many of the conditions imposed. It has been successful in having the repayment period lengthened and the interest rates reduced. The conditions of the deal were so bad that both Houses of the Oireachtas at the time could have legitimately voted ?No?. We also see it in the ways the troika has allowed certain terms to be changed such as the arrangement for the promissory notes. We have also been told there may be further deals in the offing.

In 2008 ¤34 billion in revenue was raised through taxes. This year it is projected that ¤43 billion, with ¤1 billion in rates, will be raised. In five years there has been a significant increase of ¤10 billion in the tax take coming out of individuals' pockets, corporations, retailers and many other businesses. The public spend in 2008 was ¤49 billion, while this year it will be ¤48 billion. All of the adjustments are being made on the side of the tax take. Some may not be pleased about where we stand with expenditure on social welfare, owing to the fact that there are so many more out of work, or in servicing the national debt. While we are making cuts in Departments, we are spending more in these two specific areas. Individual spending is also tight. Even those who always had money to spend now find it tight. This, in turn, impacts on economic growth and without growth, the show will be over. This also goes for Europe and member states. In the United Kingdom the budget projected economic growth of 0.6% this year, which makes one wonder.

The big salaries in the public sector, as well as those in the private sector, are unjust. There was much discussion earlier about the pay of the chief executive of Bank of Ireland, Mr. Richie Boucher. I am not referring to him, but to the pay of the 1.8 million workers in the private and public sectors. We are told about their gross pay, but there is no discussion whatsoever of their net pay. We keep hearing about fat cats and greedy civil servants. After they pay their taxes, however, there are not that many who are in receipt of ¤450 and ¤850 in take-home pay. I accept that take-home pay of ¤850 is large.

I am saying that take-home pay of ¤850 is in the region of ¤100,000 per annum but when taxed the figure is reduced and a person on that income would not take home 50% of it. That is the reality. I am keen to see a discussion and debate about the real moneys that are going into people's pockets, that is, net pay. I have made this point on several occasions and I am bored repeating it but I believe I must continue to make it. There is a gap between people who are working and those who are not working but the reward for those working is not enough to bridge the gap. I am not referring to impoverishing people who are not working but I am suggesting that people must be rewarded if they get up and go to work. A significant quantity of people do not take home ¤500. Such people go to work but it costs money to put a car on the road and to tax, insure, fuel and service it and so on. There are no tax breaks or anything else in this Bill for people who must commute.

The Pobal HP deprivation index published some time ago shows that the area of most deprivation now is the commuter zone. I am keen to see some target based on those who commute. I live in Gorey, some 61 or 62 miles from here. The number of people on the N11 travelling north every morning is remarkable. I would go so far as to say that many of those people are in the territory to which I am referring, that is, with a take home pay of ¤500. To put a car on the road and get here and home every evening costs a great deal of money.

Everyone should be focused on this issue because these are the 1.8 million people, the worker bees, who are keeping the economy going. They will bring in ¤15 billion in income taxes in this calendar year as well as paying their share in VAT, excise and other payments. People who work contribute perhaps in the region of 60% to 65% of the total but it is difficult to put a finger on the exact figure. I am not discounting others who are paying taxes but I am saying these people are at their limits and there is no more left in terms of taxing these people or increasing excise for the fuel for the cars they drive to and from work. The people in the country who are being most ignored in the debate on taxes are the workers and at some stage we need to refocus on them.

Many people refer to the fact that there is no wealth tax. We are getting close to a rate of 40% for capital gains tax and 40% for capital acquisitions tax and other taxes dating back to the pre-McCreevy era, when it was at 40%. The figure has increased from 30% to 33%.

Section 30 includes the living city initiative. I welcome this section as a pilot initiative but we need to broaden it. I have commented on the commuter zone. Some areas in the commuter zone are larger than some cities. The population of Waterford is 40,000 but some of the commuter zone towns are almost as big. However, for historical reasons we chose to ignore these commuter towns. The Pobal HP deprivation index has indicated that the commuter zone is the most deprived and we should focus on it. I am referring to crucial sites that will be of real benefit in the regeneration of certain areas, sites that represent a huge negative. I am not referring to going crazy as we did in the past with property-based tax incentive schemes but there are areas that need something. I do not suggest I know for certain exactly what that something is but we cannot continue to ignore it or allow those areas to stagnate or stay as they are, because within a period they will begin to reverse or go backwards. It is even more difficult to stop an area declining when it start to decline, and some already have.

I welcome the retention of the position whereby social welfare payments will be exempt from the USC and PRSI. I made the point about the gap between those who are working and those who are not. I believe we should not impoverish people who are not working. However, we cannot ignore the fact that at the peak of the boom there were 140,000 people who did not work. We were bringing in tens of thousands of people from outside the European Union to work here. We choose to ignore this because it is an unpleasant fact. I made the point that there are not 440,00 people unemployed in the State - just 300,000 - because the 140,000 who were not working then are still not working, but they get the same payment as the person who has worked for the past 30 or 35 years and who has paid contributions and paid income tax, health levy and other levies that existed before being combined in the universal social charge. How can it be legitimate and just that those people who never worked are in receipt of the same payments as people who have worked for decades? Under the old stamp system, the more one paid in, the longer one got paid, but the regulations have changed.

It is important that Fianna Fáil does not go "Dallas" on us. Deputy Micheál Martin cannot be like Bobby Ewing and step out of the shower and ask if what happened over the past five years was just a dream. It was no dream. Some people are living a nightmare because of the actions of Fianna Fáil and a senior Minister in that Government. Deputy Martin cannot just choose to ignore that. This is not "Dallas" for many people. These are difficult times and not much fun.