Seanad debates

Wednesday, 11 December 2013

Finance (No. 2) Bill 2013: Second Stage

 

4:15 pm

Photo of Brian HayesBrian Hayes (Dublin South West, Fine Gael) | Oireachtas source

I thank all the Senators who have contributed to Second Stage of the Finance (No. 2) Bill. We greatly appreciate that contribution. It was a very worthwhile debate in allowing us to survey where we are in terms of the general economic picture and to tease out some of the ideas the Ministers, Deputies Noonan and Howlin, have advanced as part of the budget. To answer my good colleague Senator Mooney's question, we have an adjustment to make next year but the objective is that if we get the 2% growth, or more, that adjustment becomes easier. Every 1% growth in GDP equates to €1.6 billion in additional revenue for the economy. If our GDP grows by 2% we would get €3.2 billion and that would ameliorate the adjustment required. It is predicated on growth. As former Taoiseach, Charlie Haughey, said years ago, "We are going for growth." I remember that famous strategy he outlined in 1987. Mr. Haughey was right then, as the Taoiseach and Ministers are right now. If we get more GDP growth, more taxes and revenues will come in to ensure the adjustment required is not as dramatic. That is something we have not managed to do because of the general problem in the eurozone economy in recent years.

I very much agree with Senator Bacik on the advantage of having the budget now. Going into the Christmas period the budget is effectively behind us. People know what they will have to live on next year and the tax and VAT rates that will apply and there is a degree of certainty. As we go into a crucially important period for the domestic economy in terms of sales and services, we have that certainty.

Taking up the point Senator Reilly raised on behalf of Sinn Féin, my argument with NERI is that it bases it figures on CSO data, which is household data. It examines the total income in a household and divides it up per person but the real world does not work like that. We base our projections on Revenue data. They are a much more reliable indication internationally. It is real taxpayers with real amounts of money they pay on their tax and real data from the agency responsible for collecting that tax revenue. We argue that our figures are a good deal more reliable. One can get any projection one wants based on whatever starting point one obtains, but the international view is that Revenue data is more reliable than CSO data.

My good colleague Senator Michael D'Arcy mentioned the recent The Irish Times survey on who pays for what, what wealth is and to whom we refer when we talk about people who earn €75,000. The results of that survey were very interesting.

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