Marc MacSharry (Fianna Fail) | Oireachtas source

I thank the Minister for coming to the House. One thing is certain, whatever decisions are made on budget day will be wrong in the sense that we would all have our version of what should and ought to be done. That would vary from person to person within the Labour Party, the Fine Gael Party and, perhaps, within all members of society. The choices are what politically divide us. We are glad to have the opportunity to make a few points in advance of the budget because all too often it was announced on the day and from that perspective we are grateful.

During the course of the past five years the Minister said the Government was elected to put the public finances in order. The manifesto was one thing and later came the programme for Government. At the banking inquiry I noted that the Minister for Finance, Deputy Michael Noonan, said it would be fair to say that the Government predominantly followed the four-year plan as set out by Brian Lenihan. I think he described it as a pretty good plan. Our view is that plan could have been implemented with less stress and pressure on the less well-off than was done while the sacrosanct higher earners and higher tax rate, certainly sacrosanct within Fine Gael, seemed to go untouched. Those higher earners who, frankly, expected a bigger hit were in a better position to take the bigger hit and perhaps this would have made some of the more difficult measures less necessary to implement in terms of the elderly, the sick, the less well-off and the most vulnerable in society.That is what divides us politically. Since coming to power, while claiming that it has not increased the income tax rate, the Government has introduced 13 separate increases in tax on income and a total of 45 other separate tax increases. It has also introduced numerous stealth taxes and has driven up the cost of living for families. It seeks to hide very substantial increases in tax, resulting from the abolition of mortgage interest relief in 2017 and the likely abolition, it seems, of tax relief on private medical premia, if universal health insurance goes ahead. Together, these measures will take €600 million from families throughout the country. While we are in an era of announcement after announcement of investment, which is positive and all investments are to be welcomed, it is worth noting that €600 million taken from families is ultimately what hurts people most. The announcement of a metro to Dublin Airport on the never-never between now and 2026 is certainly a good aspiration, and one to be welcomed because it is important that we have good public transport in our capital city, but the people who paid the price of this global disaster, particularly in Ireland over the past ten years, are the ones who deserve most in return. When discussing the budget, we must begin to focus on the people in the terraces, the people who are homeless, who are sick or elderly and who are most vulnerable because they are the ones who ought to be looked after first.

Does the €1.2 billion to €1.5 billion identified for 2016 refer to the full year effective taxation or to the first year effect? This is a very significant point because, for example, the Revenue Commissioners estimate that the full year cost of a 2% reduction in the standard rate of universal social charge, USC, will be €728 million, almost the entire amount earmarked for tax reductions. On the other hand, if the Government based its plans on the first year effect, this reduction would be €528 million, implying scope for over €200 million in tax cuts. That clarification would be welcome.

Does the €300 million commitment for public sector pay increases under the Lansdowne Road agreement reduce the €750 million available for expenditure?