Sean Barrett (Independent) | Oireachtas source

I welcome the Minister of State. The Minister for Public Expenditure and Reform, Deputy Howlin, said that the increase in public expenditure will be just under 4% higher than in 2014, and he contrasted that with earlier times of more spendthrift operations. Those of us who sit on the Joint Committee of Inquiry into the Banking Crisis know how much that has cost and I welcome the increase in the banking levy that has been announced in the budget because we will need that reserve unless there is evidence that banks have reformed themselves and are unlikely to crash again. The Minister expects to take in €750 million from a bank levy over the next five years. That is important and while I welcome that levy, it is not sufficient for people to come in and say they are sorry. Have they reformed? Have we guarantees that they will not do it again?

The increase in the minimum wage is worth about €1,000 a year. That is more than most of the other benefits that were announced. One might conclude that the Minister is better at giving away other people's money than he is at giving away his own. Somebody else will bear the cost of the minimum wage increase.

The Minister for Finance referred in his speech to "keeping the tax base as broad as possible". That is the thinking that lies behind the vexed question of the water charge. Part of the case made was that too many people were allowed out of the income tax net by former Minister for Finance, Charlie McCreevy, in particular. When one looks in the Budget Statement at the effective tax rates on average earnings, the effective tax rate after today on a gross income of €15,000 for a self-employed person will be 10.7% and when it increases to €120,000 it will be 43%. That is the progressivity that people have mentioned all day today. Senator Hayden has also mentioned it. The problem with the water tax is that it is a poll tax. It is a fixed sum regardless of consumption or income. We should look at that. To say it broadens the tax base neglects the fact it has serious adverse impacts. The people I have seen on water marches seemed as though they could not afford a lump sum of €260, even if they get €100 back. It is important to reduce the tax burden on low-income people and to keep targeting that.

The pension fund levy is gone. It was ironic that people who had unfunded pensions advised the Government to put a levy on people with funded pensions to help pay for the crisis, but we have done away with that.

To encourage entrepreneurs and to support small businesses, a reduced capital gains tax of 20% will apply.The Minister of State said this relief will represent a simplified and up-front benefit for individuals who propose to sell their business. He is about to become an ex-entrepreneur, if he says "have a tax break" to become an ex-entrepreneur. That seems a very strange measure - if one such person sells a business the Government will give him or her a tax break for doing so.

I agree with the Minister of State's misgivings about continuing the special VAT rate, in particular, on hotel rooms in Dublin. I think he warns them that this will be reviewed. I have heard of rates that have doubled and we have heard more in terms of special events. When the Exchequer had nothing, we gave the hotel sector a break and the hotel sector in Dublin, in particular, ought to remember that.

The taxation of the gross weight of heavy goods vehicles is a proposition we put twice to the Minister for the Environment, Community and Local Government, Deputy Kelly, and the then Minister of State, Deputy O'Dowd, and I am glad the Minister is coming around to appreciating that what is on the truck damages the road. That is what we are trying to do to recoup the cost of roads. I note from the details that it is based on the weight per axle rather than the gross weight of the vehicle but the present method of taxing heavy goods vehicles never made economic sense. We have made the point here a couple of times and I am delighted it is being taken on board.

In regard to reform of the public service, we need to enhance the way in which capital projects are appraised. The document published last week in respect of €27 billion lacks appraisals and conviction that these are projects that will benefit society as a whole. Therefore, a stronger input is required from the Government's economic and evaluation service.

In his Budget Statement, the Minister for Public Expenditure and Reform, Deputy Howlin, mentioned the minimum wage and referenced €1,000 per year and measures to restrain the growth of public expenditure so that we do not get into trouble.

There is one point on which I seek clarification from the Minister of State, namely, the proposal at primary level to reduce the pupil teacher ratio from 28:1 to 27:1. The bord snip report, page 43, mentions a pupil teacher ratio of 16:1. I wonder if there has been a mistake in that particular calculation. At post-primary level the staffing schedule was 16:1 as stated on page 43.