Marc MacSharry (Fianna Fail) | Oireachtas source

It will be €450 million of new measures. Now we know that there will be €300 million off the top of the €1.2 billion or €1.5 billion under the Lansdowne Road agreement. It is good to have that clarification.

Will the additional spending commitments required take account of demographic pressures on health, education and welfare and the scope for expenditure to improve overall service delivery mostly focused on the less well-off? While it is great to have the opportunity to discuss the budget in advance, and I commend the Minister and the Government on that, the fiscal council has been largely ignored since it was brought into being. It set down a clear marker that €1.5 billion in tax cuts and expenditure increases is at the outer limit of what would be prudent for the Government to undertake. The council also called for a realistic medium-term plan. Has the Government taken adequate cognisance of this advice? In the last budget the fiscal council was largely ignored. Vital information that would inform policy discussion is withheld from the public and interest groups, and at times the information presented on budget day cannot be relied upon, as we saw in the budget last year when €113 million in medical card probity savings were announced but we never really got to the bottom of it. We need to measure outcomes versus the language or spin in the Budget Statement.

I would like to see a simplification of the tax code. There is a need for that regarding pay-related social insurance, PRSI, USC and income tax because each has a different entry point at €12,012 for USC, €16,500 for income tax and €18,304 for PRSI. There is also the anomaly that an increase in pay makes an employee on an income of €18,300 worse off by €700 because all income become liable for PRSI at that stage. It does not seem fair that this should be the case.

It is important to recognise the importance of ability to pay. The local property tax, water charges, commercial rates and similar charges are not linked to ability to pay. In many instances they represent a regressive burden on homes and businesses and we need to consider that. We need to reform the USC, but perhaps that is in the Minister’s plans. A taxpayer on an income of €17,766 pays the same rate as those on very large incomes. Lower income earners must be taken out of the USC net. Only 18% of income earners benefit from a cut in the top tax rate. There is a need to prioritise increasing tax credits which benefit all taxpayers equally over changes to the rates. There is also a need to address the anomaly of the self-employed. A self-employed single person earning €15,000 pays almost six times as much tax as an employee in the PAYE system with the PAYE credit. We have to incentivise people to get out there and work and to start businesses. We need to breed entrepreneurial flair in the community but the system does not do that. There is also a need to increase the threshold on inheritance tax and my colleague Senator White will deal with that aspect.

We also need to think a little bit outside the box. I would love a government to abolish the means test for the carer’s allowance, even on a pilot basis. With other supports, such as medical cards, some home help and the home adaptation grant, many of our loved ones, our aunts, uncles or parents, could be kept at home at a cost of perhaps €600 or €700 a week. This would give a family member or someone else a job in looking after that person, instead of them holding up an acute bed which costs €1,000 a day or even a nursing home bed which could cost approximately €1,200 a week under the fair deal scheme. Some government should try this - it might not work but it would be worth a try. We have to be prepared to be innovative and to think outside the box.