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Finance Bill 2014: Second Stage (Resumed) (Continued)

Wednesday, 5 November 2014

Dáil Éireann Debate
Vol. 856 No. 2

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(Speaker Continuing)

[Deputy Mary Mitchell O'Connor: Information on Mary Mitchell O'Connor Zoom on Mary Mitchell O'Connor] I recognise the strides we have made in rebuilding the economy and welcome and commend the many progressive steps taken in budget 2015. I simply ask the Minister to make clear the message that the Government is not unfairly taxing the self-employed. There is great confusion and thus annoyance about the universal social charge rate among the very people whom we encourage to meet the challenge of starting a business and taking risks. The self-employed are honest, hard-working people who want only fair results for their work. Yesterday's edition of The Irish Times featured a helpful response from Mr. Brendan Loughane, an official in the Department of Finance, in which he stated:

To suggest the divide has widened as a result of changes introduced in Budget 2015 is simply not true ... The factual position is that a single PAYE worker and a single self-assessed worker earning €100,000 will see an increase of €747 in their net income in 2015, as a result of the Budget 2015 changes.

This message needs to be communicated to the self-employed as they do not feel they are supported by the Government.

  I propose to respond to suggestions made by Opposition Deputies that the Government introduce a wealth tax. It is easy for Deputies to shout out ill-thought out suggestions in the Chamber without considering the reality. As a Deputy for Dún Laoghaire, I can vouch that many families paid exorbitant prices for the modest three and four bedroom semi detached homes in which they live. These taxpayers cannot afford to pay a wealth tax. I remind certain Opposition loudmouths that while many of my constituents in Dún Laoghaire pay income tax, child care costs and property tax and support and will pay the water tax because they know water is not a free commodity, by God, they will not support a wealth tax on their homes.

  I again commend the Minister for introducing a progressive budget which abolishes the 0.6% pension levy, retains the 9% VAT rate, does not increase excise duty on alcohol, extends BreastCheck and retains the pupil-teacher ratio. Yesterday, the European economic forecast published by the European Commission stated Ireland's growth rate would be the highest in the European Union both this year and next year. This achievement is a direct result of the difficult, wise and competent decisions made by the Minister and shouldered by the people. I am confident that the measures included in the Finance Bill will help to ensure continued growth and positive news for Ireland.

Deputy Áine Collins: Information on Áine Collins Zoom on Áine Collins Much has been said in recent months and years about the Government's ability to deliver on the promises and commitments made before the general election. I intend to deal with these commitments in a general manner.

  Looking back to where we were four years ago, the Government's central commitment to the electorate was that it would restore the economy and return people to work. All of the other commitments, while important in their own right, could not even be contemplated if, as a nation, we continued to be in a state of bankruptcy. Let us not forget that the country was bankrupt four years ago and most political commentators and Opposition parties and all Independent Members doubted whether the Government could deliver on its agenda. The facts are now clear and our central commitment and policy plan are being delivered. There is no doubt, however, that this enormous task has been painful for the Government and, in particular, the people.

  Work to complete some of the tasks we set ourselves, for example, the introduction of water charges, is still in progress.   As all Deputies are aware, water charges are proving to be a difficult issue. The Government has given a commitment to clarify and address concerns about the charges in the coming weeks.

  Most targets have been successfully met through difficult Government decisions aimed at saving and raising money. The embargo on public sector recruitment, by necessity, remains largely in force. While the embargo was a difficult decision for the Government to implement, it has been even more difficult for the thousands of public servants who maintained services through difficult times.

  The complete reform of local government resulted in the abolition of town councils and a reduction in the size of our regional administration to make it more appropriate and affordable for the country. In this context, I often question the accusations of cronyism that continue to be made, given that Fine Gael, the largest party in local government, reduced the number of its public representatives by one third in a ruthless but necessary measure.

  The property tax has been introduced as a part of a necessary effort to broaden the tax net. Property taxes are generally regarded internationally, including by most observers and politicians, as a fair component of the tax structure. The exception are Ireland's left-wing politicians whose brand of social values appears to differ from that of their counterparts in the rest of Europe, the reason being that it confers political advantage.

  The universal social charge which hit every employed and retired citizen very hard had to be imposed by the previous Administration as a result of its poor management of the economy. The budget shows that the economic growth we are experiencing will deliver small returns to people at an individual level and ease their fears of further austerity in the period ahead. The current level of economic growth also gives enormous hope for the future.

  Despite serious difficulties during its term of office, the Government has maintained basic social welfare rates. No other country in Europe that experienced similar difficulties managed to achieve this outcome. With a growing economy, social welfare benefits can be improved gradually, as shown by the restoration of the Christmas bonus at 25% of its previous rate.

  The policies pursued by the Government quickly restored confidence in Ireland among our European partners and the financial markets. The Minister for Finance, Deputy Michael Noonan, showed a steady and reliable hand in guiding the economy and renegotiating the agreement on the promissory notes, as well as our repayment schedule and interest rates. At the same time, he injected confidence into the economy, with the ultimate aim of creating jobs. His approach is working. As he stated, the number of people in employment has increased by more than 70,000. Furthermore, we have learned today that unemployment has fallen to 11% and the Government is on course to achieve its target of having 2 million people working in the economy by 2016.

  Despite the general consensus that the Government would not achieve the fiscal targets set by the troika, forecasts suggest the deficit for 2014 will be 3.7% of GDP, well inside the original deficit target. While we all accept that our debt is still too high, the actions taken by the Government have created confidence in the economy in the financial markets. The Minister is reducing the taxation burden by refinancing our debt through new loans, with interest rates of well under 3%. Ireland's ten year sovereign bond yields have reached record lows and now trade at less than 2%.

  Since taking office, the Government has provided vital supports for indigenous industry, including the jobs initiative for the tourism industry, tax reforms for small and medium-sized enterprises and measures such as the home renovation incentive for the construction industry. Its general handling of the economy and skilful approach to our corporation tax regime ensure foreign direct investment will remain a cornerstone of economic development in the future. The certainty the Government has provided on this issue will ensure this investment will continue to increase.

  As I stated, the core commitment we gave at the general election was to restore confidence in the economy and return people to work. The Government is dedicated to continuing to set the economy on a sustainable growth pattern. Now that the economy is doing well, political pundits and Opposition parties are honing in on other issues. They should remember that, in addition to economic success, the Government has delivered complete reform of local government. Our commitment to let the people decide on the future of the Seanad was honourable. The restrictions in the Freedom of Information Act have been reversed. Appointment to State boards will be made on the basis of recommendations made by a Civil Service commission. Most importantly, a quota regime has been introduced to ensure more women will stand for election and, I hope, be elected in the future. I commend the Bill to the House.

Deputy Michelle Mulherin: Information on Michelle Mulherin Zoom on Michelle Mulherin I propose to discuss two revenue issues, the first of which is the practices of petrol stretching and diesel laundering. Hundreds of people in County Mayo alone can no longer use their cars because their engines have been severely damaged by these practices. The scale of the problem which has also been reported in other parts of the country is alarming. Additional resources and a joined-up effort are required to nail the criminals who are lining their pockets at the expense of people who do not have insurance cover for the damage being done to their cars, are unable to return their vehicles to a garage and live in areas with no public transport to speak of.

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