Hildegarde Naughton (Fine Gael) | Oireachtas source

I welcome the Minister of State of the House. The emphasis of this budget, even more than last year, will be on recovery and building rather than retrenchment. Yesterday we had the announcement of substantial public infrastructural spending. When we think of where we were five years ago, this spend is most welcome and needed. The focus of the budget must be on securing the recovery rather than squandering the recent gains in a populist fashion, as many of the Opposition frequently suggest. While it is proper that the emergency taxation measures for the public and private sectors be unwound, there is a wider issue. The Opposition calls for this and that taxation measure to be abolished or reduced. Opposition Members also want a much greater spend on each and every popular issue that arises. This is the modus operandiof opposition, but it also has a responsibility to be honest. Opposition Members want Nordic levels of services without thinking about where the money comes from. Sinn Féin, for instance, is loud in calling for significant State investment in affordable child care and in every other area. At the same time, it calls for the abolition of property and water charges. If both charges were to be abolished, where would it find the money for this substantial investment in child care? Billions of euro do not come from thin air. It is important to state this because it seems not to be understood in some circles. Services are paid for by the moneys collected from the taxpayer. If various charges and taxation measures are abolished, little money would be left for investment in services. It is that simple.

I must address another populist mantra, which is "Let the rich pay more." The facts, however, speak for themselves. The top 1% of income earners pay 21% of total income tax and USC in Ireland. This increased from 19% due to the changes made in budget 2015. On the other hand the 76% of earners who have salaries of less than €50,000 per year pay 20% of the total tax take. Much of the leftist opposition asserts that all our problems can be solved by penal taxation of those earning more than €100,000. The simple problem with this is that only 6% of taxpayers make more than that figure. These are the figures of the Revenue Commissioners. If those on the left believe 6% of taxpayers are able to fund all the spending promises and cuts in taxation to which they have committed, then they are utterly mistaken. The actual problem with the Irish taxation system is that those on relatively low incomes hit the marginal rate of tax much too early. I hope this can be addressed in the forthcoming budget.

The usual trend in expansionary budgets such as the forthcoming one is to provide a little funding for many things. I would prefer on this occasion, as time does not permit me to go into all of the areas, to concentrate on two in particular. The first is the issue of high-quality and affordable child care. I have been discussing this issue in Galway in recent months and I will host a public meeting tomorrow. The lack of high-quality and affordable child care is of huge concern to many people. Child care is now like a second mortgage for many families. It prevents those who wish to re-enter the workforce from doing so. The simple fact is that we as a country have not spent and do not spend sufficient money on child care. Recent figures from the Department of Children and Youth Affairs show that just 496 children were registered for the after-school care scheme between September 2014 and August 2015 - that is, 0.1% of a primary school population of more than 500,000 children. Those participating pay €15 a week and the State provides between €40 and €80 a week per child. The total funding allocation for this year is just €1.32 million. It is clear from the participation and funding levels that there are significant problems. I earnestly hope that in the forthcoming budget we will see a significant move to increase State investment in child care. It will not be possible to make all of the required changes in one budget, as it will take a multi-annual approach, but I hope the budget will make a start in the area.

The second issue I wish to raise is that of the self-employed, particularly low-income self-employed people, who are significantly discriminated against in terms of taxation. The self-employed are just as important as PAYE workers and it is time they were treated fairly. Publicpolicy.iehas calculated that a self-employed single person on an income of €15,000 pays almost six times as much tax and PRSI as an employee on the same income. A simple principle of fairness in any taxation system is that two people earning the same amount of money should pay the same amount of tax, but this is not the case. Our system fails a basic fairness test at the first attempt. I urge that the budget commence the process of levelling this playing field.

Thankfully, today we are in a position to discuss how money can be invested in people and projects because of the actions of the Labour Party and Fine Gael Government. The economy is going from strength to strength because of the hard decisions that were taken and the sacrifices the people of Ireland made over the past four years. We cannot throw this success away now. We cannot listen to the Opposition, who know neither the cost nor the value of anything. I commend the Government on the work it has done to date.