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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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Deputy Joan Collins: Information on Joan Collins Zoom on Joan Collins Last year, when I made my first contribution in the Dáil, my first comment was that I welcomed the "coalition of cuts" to the Dáil. Unfortunately, I have been proved right. The democratic revolution spoken about by Deputy Kenny was a rout of the Fianna Fáil Party but because of the lack of an alternative we have seen the continuation of the same Tweedledum and Tweedledee politics of the past 20 or 30 years.

A couple with two children and earning €25,000 a year are the working poor. They are putting in long hours and feeling the pressure of austerity budgets. The budget is a savage assault on their living standards. Assuming they live in an average family home, they will pay property tax of €315. Their increased PRSI payment will be €264 a year, the cut in child benefit will be €240 a year and their back-to-school allowance will be cut by €100. This amounts to a total loss of €919 a year, or €18 a week. The Irish League of Credit Unions reported that a huge number of people have €100 or less of disposable income per month. The budget cuts will take another €18 a week from the pockets of that average family.

To cut the income of a family who are trying to survive on €25,000 a year by almost €1,000 is an outrage. The cut of €26 million in funding for the annual respite care grant is an outrage. Increased prescription charges from 50 cent to €1.50, to raise €84 million, is an absolute outrage. The cut to the homecare package for electricity, gas and telephone is shameful. It is more than an outrage.

Our Lady of the Wayside national school in my own area has been in the media recently. It has been affected by cuts and cannot provide proper heating or maintenance for classrooms. The school asked for a reverse of cuts so that it could provide pupils with the education working class children in a DEIS school deserve and should receive. Those previous cuts should have been reversed in the budget.

I have three words for members of the party of Connolly and Larkin who will vote for this outrage. They are shame, shame and shame. There are no Labour Party Deputies in the Chamber but I hope they are watching the television screens in their offices.

Inflicting this pain on the poor, in this case the working poor, is not only immoral and unjust, it is completely unnecessary. Reversing the cuts and tax increases that have hit those on low and moderate incomes, including removing the universal social charge from all earning less than €40,000, would cost €3 billion. This could be replaced by an emergency 5% wealth tax on the top 3% to 5% who control huge wealth, and a financial transaction tax. Alternatively, the Government could have raised money by making the 12.5% corporation tax an effective rate of tax which would have brought €5 billion into the economy. This is not a lot of money to ask corporations to pay to keep citizens alive and to put more money into the economy. The Government could have raised money by making the marginal tax rate on individual incomes above €100,000 an effective tax rate. That would have brought in €2.5 billion. The Government did have choices.

The budget is an insult to those who are on the dole or who have emigrated in their thousands. It offers nothing for these people. When the United Left Alliance raise the need to tax wealth, high incomes and hugely profitable multinational companies, we are told it would drive these people out of the country and create a brain drain. What about the tens of thousands of our best and brightest young people who have been driven out of the country by the failed policy of austerity?

Some speakers seem to have the impression that austerity is something that is not really happening. The IMF has said austerity measures are not working and that every euro taken out of the economy actually means €1.70 is taken out, because of a lack of growth. Is the choice between keeping our young people here and giving them a role in the economy and society and satisfying a handful of bankers and CEOs who will not work for less than €500,000 a year, the untouchables? That choice is not difficult.

Deputy Tom Fleming: Information on Tom Fleming Zoom on Tom Fleming This is a totally regressive budget. It is an attack on the householder, the sick, the elderly and the families and children of Ireland. It has compounded the layers of austerity imposed in four previous budgets by, once more, stripping the weaker sectors in society who have already had to endure job losses, negative equity and mortgage default while billions of euro are handed over to foreign bondholders.

The budget offers no hope to the hundreds of thousands of exiles who have left our shores over the past five or six years. It is likely that the exodus will accelerate after this week.

The property tax is being introduced at the most inappropriate time, shortly after the property crash. The property market is still on the floor and prices have not even bottomed out yet. A number of months ago, Deputy Peter Mathews ascertained, in a parliamentary question to the Minister for Finance, that more than half a billion euro could be accrued from a third rate of income tax, placing a 5% surcharge on incomes over €120,000. Deputy Mathews subsequently proposed that this would fund the annual income derived from the property tax. I am disappointed that his proposition was neither considered nor acted upon. The proposal was not simplistic and nor would it have been complex to implement. The method of collection would be straightforward and I believe the troika would have agreed to it. It does not matter to the troika where money is derived from so long as it is paid. The proposal by Deputy Mathews was never followed up on and many people, myself included, are disappointed that it was not pursued. The tax would also have been based on ability to pay.

The huge mortgage arrears crisis has gone out of control and the vast majority of people will not be able to pay the property tax. Up to date statistics indicate that 170,000 people are in arrears or are having their mortgages restructured.

The proposed format of the cut in child benefit is crude and cruel. A family of four children will suffer a reduction of up to €700 per annum. This is a hammer blow to the average Irish family. The only fair and equitable system is to means test child benefit and let reductions apply to those at the upper end of the income scale. Child benefit to those earning between €70,000 and €90,000 could be reduced by 25%, to those earning between €90,000 and €100,000 by 50%, to those earning between €100,000 and €120,000 by 75%, and abolished after that. A huge hardship and sacrifice is being imposed on those people who really need the benefit and are on the breadline. The system I have outlined would make essential welfare money available for those who most need it.

On the child benefit issue and with regard to the respite care grant, household benefits and medical cards, the Government will have to get back to the drawing board and consider reversing and amending these very harsh measures. They are neither fair nor equitable. Surely the Minister for Social Protection can renegotiate with providers of utilities, get better value for the €61 million being expended and spread the money around better.

The abolition of PRSI exemptions is a drastic decision. The reduction in the back-to-education allowance and the taxing of maternity benefit will drive families further into poverty. The threefold increase in the medical card prescription charge, from 50 cent to €1.50, is amazing and is another hardship on those at the lower income level.

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