“For the second year in a row this Government has introduced a Budget that is deeply regressive, both socially and economically … Socially it hits people on low incomes, including the working poor, more than it hits the better off.
That is the result of the Government, the Labour Party in particular, reneging on the commitments given in the programme for Government and during the 2011 general election. One of the most blatant examples is the cut in child benefit. During the 2011 general election the Labour Party took out Tesco-like advertisements and at every door its candidates told voters that Fine Gael wanted to cut child benefit.”
Minister Howlin Refuses to Tax the 10,000 on 595,000 Per annum
Deputy Seamus Healy: The Minister has been inviting us to consider outcomes. Maybe we should examine some of the outcomes of the social and economic policy of this Government. The gap between rich and poor in Ireland is now four times the Organisation for Economic Cooperation and Development, OECD, average. Incomes in the average Irish household have fallen by 50% and low income households lost a greater proportion of their income than the better off. The number of those in poverty has risen and the level of the poverty has deepened.
That is the view expressed recently by the OECD which confirmed the ESRI’s finding that budget 2014 had had the greatest impact on low income groups, the incomes of which had declined by 2%, and supported the claim by Social Justice Ireland that budget 2013 had been unjust and regressive. Social Justice Ireland stated:
For the second year in a row this Government has introduced a Budget that is deeply regressive, both socially and economically … Socially it hits people on low incomes, including the working poor, more than it hits the better off.
That is the result of the Government, the Labour Party in particular, reneging on the commitments given in the programme for Government and during the 2011 general election. One of the most blatant examples is the cut in child benefit. During the 2011 general election the Labour Party took out Tesco-like advertisements and at every door its candidates told voters that Fine Gael wanted to cut child benefit.
Deputy Brendan Howlin: Is there a question or is this a speech?
Deputy Seamus Healy: Labour Party candidates asked the public to vote for them in order to stop child benefit cuts. The public put its trust in the Labour Party and what happened? The party has supported cuts in child benefit every year since it entered government.
An Ceann Comhairle: I ask the Deputy to, please, put his question.
Deputy Seamus Healy: My question for the Minister—–
Deputy Brendan Howlin: The Deputy has a question.
Deputy Seamus Healy: My question for the Minister, if he will listen, is whether he will reverse the social welfare cuts, including, in particular, the cuts in child benefit, heating, fuel and telephone allowances for elderly people and the carer’s allowance. Is the Labour Party not ashamed, in this the centenary year of the 1913 Lockout and the party’s foundation—–
An Ceann Comhairle: I am sorry, but the Deputy is over time.
Deputy Brendan Howlin: He is well over time.
Deputy Seamus Healy: —– that it is introducing budgets that hit the low-paid rather than the super rich and the very wealthy?
Deputy Brendan Howlin: I have listened to the usual political drivel from the Deputy opposite.
Deputy Seamus Healy: It is true.
Deputy Brendan Howlin: It may have escaped the Deputy – perhaps his salary and other supports are too healthy – that we have just gone through the worst economic crisis in the history of the State. The Government has managed to pick up the broken pieces of a shattered economy and returned it to growth. The critical criteria people will consider are fundamental issues such as employment. How many people have jobs? When we entered government, the unemployment figure was heading towards 500,000. The Deputy is not interested in listening to me. He is fumbling with his papers.
Deputy Kathleen Lynch: He is preparing his second speech.
Deputy Brendan Howlin: The unemployment rate is now falling. It is still too high, at 290,000, but we expect it to fall below 11% this year. Nobody would have believed this a few years ago. We have stabilised our budgets and torn up the prom note, that despicable arrangement made by the previous Administration. We have brought confidence back to the economy. That is the judgment people will make.
The Deputy referred to commitments made by my party. He may not have noticed that it is not in a single party Government. We did not win an overall majority in the last general election. We negotiated a programme for Government with a party which had won significantly more seats than we had. However, if one considers the balance between all of the commitments made by my party and Fine Gael to the people, one will see that the vast bulk have been delivered on. For some Deputies opposite, the very prospect of recovery and renewal is anathema to their political outlook. There are Deputies on the Opposition side who revel in the misfortune of the people and the State because they think they can make political capital from it.
Deputy Seamus Healy: The policy of the Government is to make the poor and the less well-off pay.
Deputy Brendan Howlin: That is a lie.
Deputy Seamus Healy: It made promises with full knowledge of the situation in 2011. The assets of the super rich are back above peak levels in 2006, according to the Central Statistics Office.
Deputy Brendan Howlin: What does that mean?
Deputy Seamus Healy: It means that there are very wealthy people in this country.
An Ceann Comhairle: I am sorry, Deputy, but we are dealing with Leaders’ Questions.
Deputy Seamus Healy: The Government has chosen not to make them pay their fair share.
Deputy Paul Kehoe: The Deputy claims only to represent the poor. How many pensions is he getting?
An Ceann Comhairle: What is Deputy Seamus Healy’s supplementary question?
Deputy Seamus Healy: The Government has chosen not to impose an asset or wealth tax on the super rich. However, it is hitting poor and less well-off families.
An Ceann Comhairle: Will the Deputy, please, put his supplementary question?
Deputy Seamus Healy: There is wealth in this country that is not being taxed by the Government. Will the Minister introduce a tax on wealth and assets to ensure the very wealthy in society, that is, those who earn €595,000 a year and those who have significant assets, pay their fair share of taxes?
Deputy Brendan Howlin: The Deputy is probably aware that we have one of the most progressive income tax regimes in the world. Aside from only one country in the OECD, our progressive tax rate is the best.
Deputy Seamus Healy: Will the Government introduce a wealth or an asset tax?
An Ceann Comhairle: Please allow the Minister to reply.
Deputy Brendan Howlin: Deputy Seamus Healy does not want to hear the reply.
Deputy Seamus Healy: I just want the Minister to answer the question.
An Ceann Comhairle: Everybody in the House wants to hear the reply. The Deputy has had his say.
Deputy Brendan Howlin: He had his say, but I am afraid that he just reads his script and is not interested in the reply. We have the second most progressive income tax regime, with a high marginal rate of tax, that we have defended because the crisis in the country requires everyone to make an appropriate contribution.
Deputy Seamus Healy: I am asking about a wealth or an asset tax.
Deputy Brendan Howlin: When we introduce asset taxes, for example, a local property tax which is regarded as the norm among social democratic parties, the Deputy opposite opposes them. He is only in favour of fantasy taxes on fantasy people.
Deputy Seamus Healy: A Fine Gael Minister did it in the past.
Deputy Brendan Howlin: If we were to impose a tax on those earning in excess of €590,000, as the Deputy suggests, how many people would it cover and how much would accrue to the State?
Deputy Seamus Healy: There are 10,000 such individuals.
An Ceann Comhairle: I guarantee the Deputy silence when he is asking a question. Will he, please, respect the respondent?
Deputy Seamus Healy: I would like an answer.
An Ceann Comhairle: Please stay quiet.
Deputy Brendan Howlin: Deputy Seamus Healy is not interested in the answer. He is only interested in making a stump speech. His greatest regret is that the Government’s economic policies are driving recovery and job creation and bringing investment into the State.
Written Answers – Department of Finance: Budget Measures (18 Feb 2014)
Séamus Healy (Tipperary South, Independent)
205. To ask the Minister for Finance if he will reverse the budget 2014 measure regarding health insurance due to the fact that as a result health insurance premiums have been increased excessively; and if he will make a statement on the matter. [8154/14]
Michael Noonan (Minister, Department of Finance; Limerick City, Fine Gael)
In the first instance, decisions taken to increase the cost of health insurance premiums are made by health insurance providers and are beyond my control. However, it is the case that in Budget 2014 tax relief for medical insurance premiums was restricted to the first €1,000 per adult and the first €500 per child insured. Any portion of premium paid in excess of these ceilings no longer qualifies for tax relief.
The cost of Income Tax relief in respect of medical insurance has increased significantly in recent years, estimated at €404 million in 2011, €448 million in 2012 and €500 million in 2013. Despite the increasing cost of the relief, the number of individuals insured has reduced over the same period, while at the same time the level of medical cover has decreased on some policies. Against this background the increase in costs is unsustainable. If the relief were to remain unchanged and the trend was to continue, the cost would increase to approximately €1 billion by 2020.
Prior to this reform the State was effectively paying 20% of the cost of all private medical insurance premiums via the system of income tax relief. In effect this means that those taxpayers who could never afford private health insurance, or who have had to give up their policies due to personal circumstances, are providing financial support via the tax system to those individuals who can afford such insurance.
Although it is true that the restriction of the tax relief may have in some cases, led to a net increase in medical insurance premiums payable by individuals, it should be noted that many would only be affected marginally, depending on the cost of the policies that individuals choose to purchase.
The measure to restrict tax relief in respect of medical insurance premiums was approved by the Dáil via Financial Resolution on Budget night and confirmed by the Oireachtas via the enactment of Section 8 of Finance (No. 2) Act 2013, which was signed into law by the President on 18 December 2013. I have no plans to review the restriction in the short term.
Deputy Healy questions the Tánaiste asking “how can the Government justify the introduction of a new regressive water tax to be paid by families that are already at their wits’ end?”
Séamus Healy (Tipperary South, Independent)
The policies of successive Governments have allowed an elite golden circle of the rich and powerful in this country to obtain obscene levels of wealth at a time when the vast majority of people have seen their incomes reduced and have been struggling day in, day out to make ends meet. The message from last week’s meeting in Davos and from the Paris School of Economics is that Irish society is becoming more unequal. We are hearing the same message from Oxfam, the Central Statistics Office and the Economic and Social Research Institute. That message is supported by the fact that many of the consultants who recently received substantial payments from Irish Water are the same companies and individuals who were paid for bad advice and bad oversight during the boom. The message is further reinforced by the payment of bonuses, the breach of pay limits for Government advisers and the payment of huge pensions. The list goes on.
In a recent study, the Paris School of Economics showed that the wealthiest 1% of people in Ireland own 10% of national income. Ireland is the seventh worst, in inequality terms, of the 18 countries studied. The figures for accumulated wealth are even more significant and stark. The wealthiest 5% of families in this country own 47% of the wealth. Since this Government came to power, the wealthiest 300 individuals in this country have gained €9 billion, or €30 million each. According to the Central Statistics Office, the incomes of the wealthiest 10% of people in Ireland have increased during the course of the recession, while the incomes of the other 90% of people have decreased. That fall has accelerated as incomes have declined.
Seán Barrett (Ceann Comhairle; Dún Laoghaire, Ceann Comhairle)
A question, please.
Séamus Healy (Tipperary South, Independent)
The Economic and Social Research Institute has independently studied the last three budgets and found them to be regressive, which means the budgets have taken the most from those who have the least. Low and middle income families—–
Seán Barrett (Ceann Comhairle; Dún Laoghaire, Ceann Comhairle)
This is a time for questions rather than speeches. Will the Deputy put his question?
Séamus Healy (Tipperary South, Independent)
I am putting the question now. Low and middle income families have had their incomes undermined. They have been fleeced by increased taxes, such as the unfair household tax. They are struggling to make ends meet.
Seán Barrett (Ceann Comhairle; Dún Laoghaire, Ceann Comhairle)
I will not ask the Deputy again to put a question rather than making a statement.
Séamus Healy (Tipperary South, Independent)
In those circumstances, how can the Government justify the introduction of a new regressive water tax to be paid by families that are already at their wits’ end?
Finian McGrath (Dublin North Central, Independent)
Hear, hear.
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
I share with Deputy Healy a wish to see equity in our society.
Peter Mathews (Dublin South, Independent)
Then do it.
Finian McGrath (Dublin North Central, Independent)
Good man, Peter. Give it some welly.
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
I want to see fair taxation that ensures those who are in the best position to contribute to the finances of the State do so. The problem is that every time we propose any measures in that regard, Deputy Healy opposes them.
Séamus Healy (Tipperary South, Independent)
Which ones?
John Halligan (Waterford, Independent)
What has this Government done to address inequality?
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
For example, this Government has introduced a number of measures to increase capital taxation. I refer to taxes like capital gains tax, capital acquisitions tax and deposit interest retention tax. To my recollection, Deputy Healy opposed all of those measures.
Billy Kelleher (Cork North Central, Fianna Fail)
The Tánaiste used to oppose water charges at one time.
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
When we introduced a property tax, my recollection is that Deputy Healy opposed that as well.
Joan Collins (Dublin South Central, People Before Profit Alliance)
The Tánaiste is talking about the family home tax.
Finian McGrath (Dublin North Central, Independent)
The home tax.
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
I am certainly open to hearing from Deputy Healy specific proposals about taxation or other measures that will contribute to greater equity. There is no point coming into the Dáil to bemoan inequality and excessive wealth and then opposing every measure that is introduced to deal with those issues.
Billy Kelleher (Cork North Central, Fianna Fail)
That was the reserve of the Labour Party when it was in opposition.
John Halligan (Waterford, Independent)
Did the Labour Party not propose a wealth tax and a financial transactions tax?
Barry Cowen (Laois-Offaly, Fianna Fail)
That is what got it into government for its short stint.
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
If one studies the OECD’s examination of our taxation system, one will find that the top 1% of earners in this country, who were mentioned by Deputy Healy, now pay approximately 20% of the income tax. He also referred to the top 5%, who now pay approximately 40% of all the income tax that is paid in this country.
Joan Collins (Dublin South Central, People Before Profit Alliance)
That is based on income tax only.
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
The OECD now considers the Irish tax system to be one of the most progressive among the countries it covers.
John Halligan (Waterford, Independent)
How did they accumulate that wealth? They did it on the backs of the poor.
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
I am open to hearing any specific and worthwhile proposals to improve the current position that Deputy Healy might have.
Dara Calleary (Mayo, Fianna Fail)
That would be more than the Tánaiste ever proposed when he was in opposition.
Séamus Healy (Tipperary South, Independent)
We have heard the usual spin and untruths from the Tánaiste. Of course I have made proposals regarding wealth and asset taxes in this Chamber on numerous occasions.
Finian McGrath (Dublin North Central, Independent)
That is right.
Séamus Healy (Tipperary South, Independent)
I have also done so in my budget submissions. The top 1% in this country, and indeed the top 10% in this country, have a completely disproportionate share of national income. The Government has refused to implement a wealth tax or an assets tax.
Finian McGrath (Dublin North Central, Independent)
Hear, hear.
Séamus Healy (Tipperary South, Independent)
The Tánaiste is on record as opposing water charges. I would like to quote something he once said.
Seán Barrett (Ceann Comhairle; Dún Laoghaire, Ceann Comhairle)
This is not about statements.
Séamus Healy (Tipperary South, Independent)
He said “the PAYE taxpayer has already paid enough for local services and should not have to pay again”.
Seán Barrett (Ceann Comhairle; Dún Laoghaire, Ceann Comhairle)
Would you put a supplementary question, please?
Séamus Healy (Tipperary South, Independent)
In 1994, he said that the Fianna Fáil-Labour Party Government had “imposed Residential Property Tax and now they are making us pay for water”.
Anne Ferris (Wicklow, Labour)
That was 20 years ago.
Séamus Healy (Tipperary South, Independent)
When water charges were abolished in 1997, he said the Government of the time was right to do that because they were “a form of double taxation”.
Timmy Dooley (Clare, Fianna Fail)
He was not in the Labour Party then.
Barry Cowen (Laois-Offaly, Fianna Fail)
He could have been in any of three or four parties.
Dara Calleary (Mayo, Fianna Fail)
He might have been in New Agenda.
Barry Cowen (Laois-Offaly, Fianna Fail)
Or Democratic Left.
Timmy Dooley (Clare, Fianna Fail)
That was before he went away and became an altar boy.
Séamus Healy (Tipperary South, Independent)
The vast majority of people in this country have been fleeced and crucified over recent years. In those circumstances—–
Seán Barrett (Ceann Comhairle; Dún Laoghaire, Ceann Comhairle)
Sorry, would you put your question?
Séamus Healy (Tipperary South, Independent)
—–and in light of the possibility of imposing wealth and assets taxes on very rich people in this country, will the Government withdraw the water charges that are proposed to commence in November of this year?
Finian McGrath (Dublin North Central, Independent)
Hear, hear.
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
Okay. I will comment on the issue of wealth taxes.
Séamus Healy (Tipperary South, Independent)
Is the Tánaiste accepting that I made a proposal in that regard?
Seán Barrett (Ceann Comhairle; Dún Laoghaire, Ceann Comhairle)
The Deputy should listen to Tánaiste’s reply, whether he likes it or not.
Séamus Healy (Tipperary South, Independent)
I am making sure he tells the truth.
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
There are three essential forms of wealth: property, pensions, which account for a large part of wealth these days, and money. This Government has introduced additional taxes in each of those three areas of wealth. We have introduced a property tax.
Joan Collins (Dublin South Central, People Before Profit Alliance)
It is a family home tax.
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
We have introduced additional capital taxes. We have introduced an additional tax on pensions that yield over €60,000 a year. We have also introduced additional taxes on money. The idea of coming in here and saying “let’s tax wealth” is all very well. It is a grand idea.
Tommy Broughan (Dublin North East, Labour)
We are talking about net wealth.
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
It sounds great and wonderful until—–
Barry Cowen (Laois-Offaly, Fianna Fail)
Until one gets into government.
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
—–the Government actually comes to do it. The reality is that when the Government comes to do it—–
Róisín Shortall (Dublin North West, Independent)
It flunks it.
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
—–Deputy Healy opposes it every time.
Róisín Shortall (Dublin North West, Independent)
It does not have the bottle for it.
Tommy Broughan (Dublin North East, Labour)
The Labour Party’s bosses in Fine Gael say “No”.
Seán Barrett (Ceann Comhairle; Dún Laoghaire, Ceann Comhairle)
Deputy Broughan, please.
Patrick O’Donovan (Limerick, Fine Gael)
The Deputy had his chance but he did not stay around and stand his ground for long enough.
Seán Barrett (Ceann Comhairle; Dún Laoghaire, Ceann Comhairle)
We are over time. If Deputies do not want to hear the Tánaiste’s reply, I will just cut off the debate.
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
On the issue of water, the Government has decided—–
Billy Kelleher (Cork North Central, Fianna Fail)
To make the ordinary people pay.
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
—–to make sustainable provision for water services in this country for probably the next quarter of a century or more. That is a prudent thing to do.
Séamus Healy (Tipperary South, Independent)
The Government has decided to fleece families.
Joan Collins (Dublin South Central, People Before Profit Alliance)
People will have to pay for dirty water.
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
The previous Government failed to do that. We made it clear in the programme for Government that a charging arrangement based on a metered system, with a free water allowance for households, would be introduced.
Séamus Healy (Tipperary South, Independent)
I thought we had free water now.
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
We said that charging for water would take place on a metered basis beyond that free allowance.
John Halligan (Waterford, Independent)
We have not even been told what that allowance will be.
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
Rather than exaggerating and telling people that this cost will be very excessive—–
Michael Healy-Rae (Kerry South, Independent)
The Government told lies about the property tax.
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
—–Deputies should be assured that the Government is on the side of families and households on this issue.
Billy Kelleher (Cork North Central, Fianna Fail)
The Tánaiste opposed water charges three years ago.
Barry Cowen (Laois-Offaly, Fianna Fail)
He certainly opposed them when he was in the Workers Party, Democratic Left and New Agenda.
Workers & Unemployed Action 