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Financial Resolution No. 15: General (Resumed) (Continued)

Thursday, 6 December 2012

Dáil Éireann Debate
Vol. 785 No. 3

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(Speaker Continuing)

[Deputy Shane McEntee: Information on Shane McEntee Zoom on Shane McEntee] In addition, the sum of €5 million has been set aside to support the continuation for another year of the beef technology adaptation programme, a scheme that provides beef farmers with better information and improved skills to increase profitability on farms.

The dairy sector continues to perform very well on international markets. New growth projections arising from the abolition of quotas in 2015 will allow Ireland to increase milk output by up to 50% in line with the industry target set out in Food Harvest 2020. My Department is anxious to continue to support this growth and has provided some €10 million under the targeted agriculture modernisation scheme in support of dairy farm modernisation, providing grant assistance of up to 40% for investment in dairy farm facilities. Although the dairy discussion group programme has come to an end and has achieved its objectives, an additional sum of €1 million has been provided to allow a further opportunity to new entrants to participate in this valuable programme, which builds organically a level of knowledge of best farming practice, tutored by peers, and which has proven extremely popular and beneficial in building greater levels of on-farm efficiency.

Minister of State at the Department of Finance (Deputy Brian Hayes): Information on Brian Hayes Zoom on Brian Hayes I am grateful for the opportunity to contribute to the debate, as I have a number of points to make. It is inevitable, when €3.5 billion is taken through tax rises and expenditure reduction, that it will be difficult for our people. That is on top of the fact that since 2008, €24.5 billion in tax rises and expenditure cuts have occurred. We must focus on the remarks of the Minister for Finance, the Taoiseach and the Tánaiste. When this budget is in play next year through a finance Act and social welfare Act, some 85% of the adjustment required to get the deficit to 3% by 2015 will have occurred. The House must be clear about that.

I wish to say to the Irish people that there is light at the end of the tunnel and we are getting to the last furlong of this race. It has been a torturous process for our citizens, whether they live on their own or as part of a family. The most difficult part of the race is for the 300,000 people who have lost their jobs since the collapse of this economy under Fianna Fáil, and that is where we must focus. We must get back to a state of creating and sustaining jobs.

The comments of my colleague, Deputy McEntee, have highlighted the very progressive and innovative ideas now taking root in agriculture that will spur the agricultural food industry. The ten-point action plan announced by the Minister for Finance, Deputy Noonan, and the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, has made the cornerstone of this budget the small and medium enterprise sector, which employs 70% of all workers within the country. The only way out of this is getting employment back to previous levels, and that is the only way to provide the funds needed for public services.

I will speak to the taxation system in the short time I have today. Despite the polemics, Punch and Judy antics and hyped comment made on all sides of the House, I ask Members to read annexe F in the budget documents submitted to the House by the Minister for Finance yesterday. Within annexe F, it can be seen that the Irish tax system is the most progressive taxation system of the 27 member states of the European Union; I am making that claim in the House today. A European Commission study indicates that since the adjustment process began in 2008, 30% of the overall adjustment has been borne by the richest 10% in this society, with 70% borne by the richest four income groups within the society. The ESRI report highlights that from 2008 to 2012, the greatest losses in the period were for those with higher incomes, with the smallest losses for those on low incomes. An OECD report on taxing wedges indicates that from 164 countries, Ireland has the second most progressive taxation system.

Those opposite have put the charge to this Government that we have not introduced progressive taxation measures during the course of budgets. Those with the biggest incomes have borne the most, and the top 10% of income earners in this society pay 60% of all tax. Some 70% of people in our country have incomes of €50,000 or less and they pay 19% of all income tax. That is the way it should be. Yesterday's measures included increases in capital taxation, deposit interest retention tax, capital gains tax and capital acquisitions tax. There was an extension of PRSI to unearned income, including consultancy, rent and the like. There was also the extension of the universal social charge to older citizens with very substantial pensions.

These are examples of the continuation of a progressive budget where those who have more would pay more. Ultimately, this budget will only be determined on the ability of our Government and the country to get people back to work. It can sometimes be appalling to listen to the Opposition as every time the Taoiseach makes a positive jobs announcement, such as recent announcements about PayPal, Paddy Power or Google, the heads of those opposite drop because they do not want to hear about it. For them, the perpetual Punch and Judy Ballymagash politics continues, where good news for this country about foreign direct investment can be pilloried.

I ask the Opposition to work with the Government as we attempt to get Ireland out of a hole and the legacy in which we were landed by the previous Administration. In that regard I believe the measures obtained in this budget will once again highlight the progressive nature of our taxation system and the fairness through which adjustments are being borne.

Minister of State at the Department of Communications, Energy and Natural Resources (Deputy Fergus O'Dowd): Information on Fergus O'Dowd Zoom on Fergus O'Dowd Is dóigh liom go bhfuil an buiséad seo féaráilte, cé nach bhfuil aon dabht ach go bhfuil sé crua ar a lán daoine. Táimid ag troid ar feadh blianta anois chun fostaíocht a chruthú agus chun postanna a chur ar fáil, go háirithe do dhaoine óga. Tá sé an-tábhachtach go leanfar leis an obair seo agus go dtiocfaidh críoch leis. It is very important to note, as my colleagues have said, that although this is a tough budget, it is part of a series from the past number of years. There is light at the end of the tunnel and we know where we are going. We have made very significant progress economically, and by the end of next year 85% of the heavy lifting of decisions and burdens to be borne proportionately will be done. The more people have, the more they will pay, as that is the only way forward.

In many ways this budget is the watershed for really tough decisions. With every euro coming to the tax coffers, approximately 82 cent is spent by three different Departments. The Department of Social Protection has a budget of €20 billion, the Department of Health has a budget of €13.8 billion and the Department of Education and Skills has a budget of approximately €8.6 billion. In most Departments, a significant proportion of money goes to paying people who work in the areas so the amount left is critical when we are discussing cuts. People will judge the equity and fairness of the budget.

We are looking to the future and the creation of jobs. In my constituency we have been lucky in the past number of years and this year in particular because we have created jobs. In my home town over 600 jobs have been created this year from foreign direct investment. Why is that investment coming and why have 10,000 jobs been created this year by IDA Ireland? It is because the economy is competitive and our costs have decreased. Internationally, we are much more competitive than we have been, and people wish to invest in a country with a young, talented and educated work force. We have modern communications with broadband and road and rail networks. People are coming to Ireland because they can do business with our country.

One of the key points about the budget is that there is no change in corporation tax, which remains at 12.5%.


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