Michael Mullins (Fine Gael) | Oireachtas source

The lack of rancour in the Chamber today and the general level of positivity indicate how far we have come in the past three and a half years. I appreciate the words of Senator O’Donovan in complimenting the Minister for Finance, Deputy Noonan, because he has been a steady hand on the tiller. He has brought us through a very difficult period in our history. We were reminded in the past week that not so long ago consideration was being given to having the army mind the automated teller machines, ATMs. Our public finances are very much under control and ours is the fastest growing economy in Europe. Our debt is on a downward trajectory.

The Minister said in his Budget Statement that budget 2015 is designed to sustain our recovery and reduce our deficit to 2.7% in 2015 and is another step on the road to a balanced budget. The 2.7% deficit is inside our stability and growth pact target of under 3% and reflects the Government’s commitment to prudent economic policies. A real indication of our Government’s success is that the cost of borrowing has dropped so dramatically over the past year. It is only right to acknowledge the work of the Minister and of the people in the National Treasury Management Agency, NTMA, who have secured arrangements that will produce very significant savings for our citizens. This is the first budget in many years that has given a little bit back to the people who have made so many sacrifices to get our country on the road to recovery. The tax and USC adjustments made in the budget are entirely appropriate.

The USC is the most dreaded and hated tax. I would like to have seen a bit more shaved off it because it is the tax that everybody associates with our economic disaster and austerity. I hope we will see significant changes and reductions in that. That the 2% has gone down by 0.5% and the 4% rate is down to 2% is to be welcomed. That the 7% kicks in very soon after the €17,000 threshold is reached is particularly worrying as is the 8% after €70,000. Some self-employed people have raised an anomaly with me. If they earn over €100,000 they will pay 11% in USC, which is 3% more than somebody who could be earning €300,000 or €400,000 but will pay only 8% on those high earnings. That needs to be considered because we are trying to encourage entrepreneurs. We want people to invest in their own businesses. I welcome the fact that the 41% income tax rate has come down to 40% and that the standard rate bands are being increased by €1,000.

If we want to continue to grow our economy and create more jobs it is crucial that we have a fair and competitive income tax system. I welcome the Minister’s commitment to a three year plan to progressively reduce the marginal tax rate on low and middle income earners in a manner that maintains the progressive nature of the tax. This could boost employment by up to 15,000 when the full impact is felt on the economy.

There is still severe poverty and homelessness and all the social problems that many Members raise here daily. The only way to really generate the resources to tackle all these issues is to create more employment, to get more people back to work and contributing to the national Exchequer so that the more deprived sections of our community can be taken care of. While I welcome the fact that the home renovation measures have generated quite a bit of economic activity the construction sector has only seen 6% growth in employment. Other sectors are creating significantly higher levels of growth. I appeal to the Minister and the Government to market that scheme because it has the potential to boost the economy and to give work to small builders and tradesmen and can contribute significantly to our economic improvement.

I welcome section 42 because small investors who put a few pounds many years ago into Eircom shares and were badly burnt and who dispose of them now will not be hit for any further tax, if the investment was under €1,000. The Finance Bill 2014 contains many positive measures and hopefully it will be a building block on which we will see further and major economic development.