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

Thursday, 6 November 2014

Dáil Éireann Debate
Vol. 857 No. 1

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(Speaker Continuing)

[Deputy Róisín Shortall: Information on Róisín Shortall Zoom on Róisín Shortall] However, the brunt of the recession and of austerity was undoubtedly borne by those who were least able to shoulder it. Two groups stand out in particular, welfare recipients and the working poor. The latter are people who perhaps lost their jobs or found it very difficult to stay in jobs or, after struggling to get jobs, the jobs turned out to be very poorly paid and they ended up not much better off than being on welfare. That is due to the low pay culture that has developed in this country in recent years. These people, by and large, were worst hit. They suffered cuts in their income. They were especially affected by cuts in services. People who are a little more comfortably off, although they experienced cuts in their income, in many cases were still in a position to pay for the services their families needed. However, people who were welfare dependent or who had low incomes, the working poor, did not have the money to buy services. They were doubly hit in that regard because the recession saw severe cutbacks in services across the board at social and community level.

In addition, the people who were hardest hit were also hit by the introduction of so many new taxes and charges. The manner in which those taxes and charges were introduced was very regressive as, to a large extent, the new charges did not take account of people's ability to pay. If one tells people they must pay for services and pay new charges, people on low incomes are proportionately far worse hit because they do not have anything to spare. The introduction of new charges imposes a far greater burden on them, to the point where many of them simply do not have the money to pay them.

A significant subset of the welfare dependent group and the working poor group is poor children. Last week, the UNICEF report showed that in the period 2008 to 2012 the number of children living in poverty rose by 10%, bringing the level of child poverty in this country to 28.6%, which is close to the bottom of the league in terms of developed countries. By any standard that is a matter of shame for this country. All of what one might call the developed world, OECD countries and so forth, was affected significantly by the recession, but the vast majority of countries managed to have policies to protect children from shouldering the brunt of the recession. This country did not. It was not done in the period in question, from 2008 to 2012, and it has not happened since then. Ireland is now fifth last in the league.

In the run up to the budget the Taoiseach said that the first priority for the Government was to cut the top rate of tax. Incredibly, and presumably supported by his colleagues in the Government, the Taoiseach said that after eight years of severe austerity and all it entailed for families the first priority in the budget was to cut the top rate of tax, a measure that would benefit the top 18% of earners in this country. Imagine the difference it would have made if the Taoiseach had said the first priority in the budget would be to end child poverty. Think about what it would have done in terms of confronting the reality of the worst damage that has been done by the recession and putting in place a vision and a course of action for forthcoming years in respect of identifying what our priorities should be. Think of the confidence it would restore to people that the appalling situation in which families have found themselves and the growing rate of child poverty were going to be reversed. Think of what it would do for our country and its future. The 28% of children who are currently living in poverty are tomorrow's adults and parents, which means we are back into the intergenerational sequence of poverty. That could have been broken if there had been vision from this Government. Regrettably, there was no evidence of that.

Consider, also, the confidence it would have restored in the Government and in politics that, at last, after the awful times of the last few years, the Government was looking at reality and deciding that the priority for this country had to be the 28% of children currently in poverty. Instead of that, the Taoiseach and the Government decided that the priority at this point in the development of the economy is the 18% of people who are best off in this country. It is just outrageous. The Government has chosen to introduce a tax package that will cost over €600 million. Let us consider what will happen as a result of that tax package. A millionaire gains €747 from the budget. A person on the minimum wage gains €173. How is that fair? A part-time worker on €9,000 per annum gains nothing from this budget. A high earner on €109,000 gains nearly €750. The gap between the lower paid and the better off widened significantly in the budget. No amount of Government spin, wishful thinking or contrived statistics will change that fact.

It is quite galling to hear Ministers and Government backbenchers uttering the nonsense that this budget was about cutting tax for low and middle income earners. It was not about that at all. This was predominantly about cutting tax for the better off. Of course, there were other ways to deal with it. There are measures and steps that can be taken to target any tax relief, but the Government chose not to do that. It sought to mislead people, I believe deliberately, by saying there was a clawback, that while it reduced the top rate of tax by 1% there was a clawback through USC. Overall, when one takes into consideration the widening of the standard rate band, which benefits all those earning very substantial incomes, that clawback did not exist. Everybody earning over €70,000 per annum benefits to the tune of €747 per year and double income, high earner households gained double that amount. By no stretch of the imagination can this be seen as a fair budget.


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