Paul Bradford (Independent) | Oireachtas source

The broad scope of section 2 relates to the USC. We do not often have an opportunity to have the Minister of State, or his senior Minister, before us to talk about broad taxation policy. I tabled a matter on the Adjournment perhaps a month or so ago specifically on the USC. I was fortunate, given the way Adjournment debates generally happen, that the Minister for Finance, Deputy Noonan, himself came in to respond. If I recall correctly, the wording of my motion asked the Minister, in view of the fact that the USC had been introduced as an emergency measure with a view to amending or changing it once the emergency had passed, if plans were now being made to dramatically overhaul - I hate to use the word abolish - the USC.

In light of what has been said since by other Ministers and the Taoiseach in the broader political establishment, the more I think back to the Minister's reply that night, the more surprised I am. He made it abundantly clear that as far as he was concerned it was never an emergency tax proposal. He pointed out what I know myself - that it was designed to replace the health insurance levy and the youth employment levy but, as far as he was concerned, once it was introduced by the previous Minister, the late Brian Lenihan, it was a permanent part of the architecture of taxation policy in this country and he had no proposals whatsoever to change it.

I do recognise that the USC is bringing in approximately, give or take, a few hundred million. It is bringing in approximately €4 billion. It is not possible to simply wish it away and hope life will go on. However, I hope it will become the subject of a serious debate in the wider context of national taxation policy. What I stated to the Minister for Finance that night was that, notwithstanding the myriad of commissions on taxation down through the years, we really need to put in place a commission to look at how the State is now being funded. The USC is a heavy penalty on working people. I appreciate the measures taken in the budget, but the Minister of State will also appreciate that the USC is taking money out of every worker's pocket every day of the week, as are income tax, PRSI and VAT. One hears the phrase, "the hated USC". It is just another tax.

We need to look at our broader taxation system and a broader way of generating income for the coffers of the State. VAT, income tax, PRSI and other charges must be on the menu as well as the USC. The Minister for Finance made it clear to me in this House that as far as he was concerned there was no intention to review or overhaul the USC. Perhaps political matters take over from financial matters on occasion. There seems to be a slightly different Government narrative now. There were the budget improvements, but we hear mutterings that over the next 12 months the USC will be further amended. I ask the Minister of State what is current Government policy. He stated the Government's taxation intent in the short term. I am not making an overtly political point, but it appears to me now that there are three offerings on the menu of Government proposals. There is official Government tax policy as enunciated on budget day, with a sort of rolling two- to three-year plan, with the famous phrase from the Taoiseach, "if the Government is re-elected". That appears to be Government policy. There is also Fine Gael policy. There is also, as there should be, a slightly different Labour Party policy. Over the course of the past month, we have heard three variations on the theme. There is the official Government policy, with the Government saying what it will do if re-elected, something that is unprecedented from a political perspective.

It made me wonder what was the purpose of the Labour Party because the Taoiseach announced what the Government would do if it was re-elected and what would happen in the budgets of 2018, 2019 and beyond. Now we are getting a Fine Gael perspective, and why not, and we are getting the Labour Party perspective. Which of the three perspectives will the Minister reflect on over the next 12 months?

Let us return to the USC. I am realistic enough to know that a charge of €4 billion cannot disappear. I am also realistic enough to know that the USC replaced two other levies that brought in substantial funding. The charge did not arise as an additional €4 billion of taxation. I appreciate that the charge is a burden on workers but so are myriad other taxes.

There is a debate on whether Ireland is taxed heavily or lightly and there are all sorts of statistics to support either side. The fact of the matter is that too many citizens pay a huge proportion of their income through all sorts of taxes and charges. Let me outline the other side of the equation. The State appears to be very good at taxing people, introducing new charges and anomalies and blocking reliefs but it is not as effective at ensuring taxes are well spent. Everyone knows the phrase "Government spending" and people want more Government spending. There is no such thing as Government spending; it is the spending of taxpayers' money. If we could concentrate on waste and insist on proper spending of taxpayers' money then we would do the State a significant service.

I thank the Cathaoirleach for showing latitude. This section deals with USC. I am in the fortunate position that the Minister for Finance put his views on the record of the House. He clearly outlined that as far as he was concerned the USC was not an emergency tax measure but a significant part of the State's taxation architecture which will not be changed. However, that argument seems to have developed in a meandering fashion, politically.

I ask the Minister of State for his own reflections on the USC and the current taxation system. Does he agree with my suggestion that, in the calm light of day, we need a type of commissioner on taxation to look at all of these measures? Can they be looked at in the following context? Do the measures provide men and women with an incentive to go to work and stay at work? Do the measures provide an incentive to the employer? I was surprised to hear my colleague, Senator Fidelma Healy Eames, was once an employer of six people. Do the measures act as an incentive to employers to consider employing somebody else? Does it put work at the top of the list of aspirational hopes? All of these issues need to become part of an urgent political debate.

We must concede, and for once I agree with a comment made by Bob Geldof. A few weeks ago I watched a television interview with him in which he made an interesting comment on taxation. He said it is probably impossible to have a proper economic cycle because political cycles are too short. Politicians, and we are all politicians, plan for the next election so it is difficult to plan for the next economic cycle.