I move:
That Dáil Éireann—
Aware that the Government's income taxation policies have resulted in wage and salary earners contributing 87 per cent of income taxation;
Aware that the returns from income tax will increase by one third in this year;
Aware that the abolition of the Wealth Tax by the Government, together with the virtual abolition of the Capital Gains Tax and the Capital Acquisitions Tax by the Government have caused further inequality in the system;
Aware that the process of abolishing the food subsidies has increased inflation and added to the injustices of the taxation system; and
Noting that these regressive policies have resulted in massive demonstrations and work stoppages throughout the country by tens of thousands of wage and salary earners in recent weeks;
Calls on the Government to—
(i) provide substantial relief in the Finance Bill 1979 to the PAYE sector,
(ii) radically reform the present system of income taxation,
(iii) ensure that all sections of the community pay their fair and just share of taxation,
(iv) introduce an economically efficient and socially just system of capital and wealth taxation.
We have tabled this motion with a view to directing the attention of the Government and the House to the totally unjust form of taxation we have had for a considerable number of years. Our motion calls on the Government to do four things, and I will spell them out. The first is to provide substantial relief in the Finance Bill 1979 to the PAYE sector. We believe that the Finance Bill, which of necessity must come before the House in a reasonably short time, is the vehicle the Minister for Finance can use as an interim measure for the introduction of some degree of alleviation of the very substantial tax burden that falls on the PAYE sector.
In the period immediately before the budget, the ICTU made a submission to the Government in which they asked that at least £100 million relief would be given to the PAYE sector. The Minister and the Government saw fit, apparently, to give them relief of £27 million. This sector, who have no way of escaping even a halfpenny of their tax liabilities, are contributing 87 per cent of the total income tax collected in the State, and on the Minister's figures they will pay approximately one-third more, without any adjustment, in the current year.
The taxation system here for a long time has been weighted against people who are least able to pay, and that approach has been accelerated by the policies which have been and are being pursued by the Government since they came back to office in June 1977. It has been said that in our appeals on behalf of the PAYE sector we have concentrated on the farming community, that we have been engaged in farmer bashing. If one looks at the record of this party, at the pronouncements of our spokesmen over the years, one will find that at all times we have had it as a fundamental principle that the only criterion for the paying of tax is ability to pay. We are not asking that people would be liable for tax by virtue of their occupations, only that they would be liable for taxation according to their incomes, and that there is a direct responsibility on the Government to ensure that every citizen in the State would pay according to his income.
The Minister and the Government have tried to pull a con-trick on a number of people, particularly the urban dwellers. At the moment, in the comments of members of their party, particularly prominent members, the Government are trying still to confuse the issue regarding their attempt to impose a 2 per cent levy on farmers. They were somewhat surprised that this party totally and unequivocally opposed the introduction of that levy because its effect would have been to impose an additional layer of social injustice on the whole tax structure which could be described only as socially unjust. That levy proposal did not take account of ability of farmers to pay. The Government were trying to use the levy for application against any farmer, no matter what his circumstances, in order to cushion the effect of not demanding proper income tax returns from wealthier members of the farming community.
This party are not interested in farmer bashing. We are interested in social justice, which is one of the most fundamental principles of our party, and we are not selective regarding its application. We are concerned about ability to pay and responsibility in accordance with that responsibility to pay to the Exchequer what is necessary so that the State can maintain its services.
The most encouraging thing about the recent marches and meetings that have been held to protest against present application of PAYE has been the consistency with which every speaker, whether at meetings or on radio or TV, has stressed that it is not a question of urban versus rural Ireland, not a question of looking for cutbacks in public services, but a question of a fair and equitable collection of the taxes neces sary not only to run the services at their present level, but to improve them substantially. Various speakers have rightly said that if we had a proper and equitable taxation contribution from all sections we could improve our services substantially. No one could justifiably say that our services do not need improvement. What has been the policy of the present Government with regard to taxation since June 1977? When we joined with Fine Gael in a Coalition Government we made some attempt to restructure the tax code. I would not say, nor would anybody else from these benches, that at the end of four-and-a-half years we managed to do so in a really substantial way, but a genuine start was made. We introduced the wealth tax and for the first time we introduced farmer taxation based on ability to pay. The tax code is the foundation of many of the social injustices that go right through our economic and social system. The system must be radically changed, not just fiddled with.
Although this protest focused on PAYE one of the things that has come from it is the knowledge that it is a much wider protest against the kind of society that Fianna Fáil have imposed on the country. From the early 1930s to the middle 1960s Fianna Fáil could be described as a radical party that got the support because they were believed to be concerned with social justice. From the middle 1960s on they changed, but not as swiftly, as dramatically or as blatantly, so far as the electorate are concerned, as they did over the last 18 months. How could any Government in a civilised State remove a wealth tax which would affect approximately 5,000 people and give them a gift of £2,000 per year? To be affected by the wealth tax these people would have had to have a minimum of £850 million. Last Saturday morning two elderly sisters came down to my clinic in Camden Street. They were old age pensioners who had worked in a certain confectionery firm in the city for 42 years. They had contributed towards their old age pension week after week and after 42 years service in that private company they each received the princely pension of £5.40 per week.
The total income of each of them was £21.45 and out of that they have to pay £1.15 every fortnight to the Exchequer. That might seem a trivial sum but in 1979, did anyone ever try to live on £21.45 per week, to pay rent, to pay for food, for light, heating and clothing, and still keep any sense of human dignity? These two ladies had contributed to the building up of the State and had worked for 42 years and this is their position but the Government saw fit to give a gift of £2,000 per year to the 5,000 people who would have been covered by the wealth tax. The only reason for this inequity, the only justification that was given was that if we did not cater for them they would not invest and produce jobs here and that under the Fianna Fáil grand scheme of what they described as job creation, it was essential that these people be enticed back into the country to provide the jobs. What jobs have the private sector provided? By Fianna Fáil's publications, despite their gift of £2,000 plus, the other benefits given through the capital gains tax, and the capital acquisition tax, what Fianna Fáil described as incentives, Fianna Fáil had to cut back on their job expectations from the private sector by no less than 10,000 over a period of three years. This gift of £2,000 was described as incentives for this category but for a social welfare recipient it would be called a handout.
How in a civilised community that calls itself Christian could the Government, that removed the wealth tax, remove food subsidies? The removal of the food subsidies has had little effect on the wealth tax category and it would not be felt by Members of this House and their families, but it has been badly felt by those two ladies that I met at my clinic last Saturday morning and by tens of thousands of others in our society. Short term social welfare recipients were given an increase of 12 per cent in the budget, and long-term recipients were given an increase of 16 per cent.
The consumer price index recently published shows that, under this Government who got into office to some extent on a commitment and a pledge to bring down prices, and food prices in particular, food prices increased by 18 per cent. Some people and some organisations talk about State involvement, State grants and State subsidies and condemn them if they are going to people in need or to low or middle income groups. If we really examine State involvement, State subsidies and State grants, we find that some of the people who are most vocal in condemning them are the greatest beneficiaries. They are not called grants in many cases. When given to this class they are called incentives.
I understand that in 1981 corporation profits tax will be limited to 10 per cent. Before they reap the benefit of that change in our taxation code, is there any obligation on any company or any firm to create jobs? Massive grants are given by the IDA for job creation. They are given for factories and equipment and then foreign industries get a 20 years' tax free holiday. No one is suggesting from these benches that we do not need foreign investment. Do the Government realise that by the mid-1980s over 60 per cent of Irish manufacturing jobs will be outside Irish control? They will be controlled by foreign interests. Unlimited money is being poured out in this direction. We all know we need jobs, but there are other ways of providing jobs and of ensuring that they are Irish jobs under Irish control and that they will contribute to the building up of our commercial and industrial sector. We could also reap the benefits of many of the social aspects of Irish jobs under Irish control.
Originally the Minister announced the 2 per cent farm levy. He was very definite that there would be no change in it. At the Fianna Fáil Ard-Fheis as announcement was made that there would be a modification in its implementation, that it would not apply to certain produce and certain types of farmers. I understand that modification would have cost the State approximately £4 million. On RTE the Minister stated categorically that there would be no further negotiations on the implementation of the 2 per cent levy. He said there might be a meeting with the farmers the following week where they could state their case, but there would be absolutely no concessions.