Amendments Nos. 3, 5, 7, 9, 11 are related. Amendments Nos. 13, 15, 17, 19, 21, 23 are consequential. Amendments Nos. 2, 4, 6, 8, 10, 12 are alternatives which render amendments Nos. 14, 16, 18, 20, 22 and 24 consequential. Amendments Nos. 1 to 24 will be taken together, by agreement.
Finance Bill, 1982: Committee Stage.
SECTION 1.
There is no agreement.
Could the Chair arrange to have the list circulated?
Deputy Desmond's amendments are related but there is another set of amendments by Deputies Sherlock, Gallagher and De Rossa which were circulated only this morning. Deputy Desmond's set were circulated early. I do not think it would be right to take the two sets of amendments together. They are different and they should be dealt with separately. Deputy Desmond's amendments were put down first and should be taken first. I think the Chair should give us an indication of the Ceann Comhairle's ruling in regard to amendments which will be ruled out of order. It would assist Deputies early on if they were informed about the amendments which have been ruled out of order and which therefore will not be debated. It would be better to know now rather than have us going into the debate not knowing which amendments are out of order. Then we would not be wasting our time studying and preparing material on amendments which will not be discussed anyhow. I can imagine some of the more industrious Deputies having heaps of documents about amendments which will not be discussed. If the Chair could do that it would help us to concentrate on the amendments which will be before us.
Acting Chairman
I have not got a list in any proper order but I have a number of notes which I will read. The first one outlines the numbers of the amendments that are ruled out of order: amendments Nos. 32, 47, 63, 65, 66, 71, 74, 75, 76, 77, 79, 109 and 110. Amendment No. 41 also falls to be disallowed on the ground of not being relevant to the provisions of the Bill as read a Second Time. Amendments Nos. 48, 51, 67, 72, 73, 99, 107, 111, 112, and amendment No. 64 also fall, and Nos. 49 and 50 are to be added.
I presume these are adjudged to be out of order as they involve a potential charge on the Exchequer or that they are not relevant to the Bill, and that these are the only two grounds on which a number of amendments have been adjudged to be out of order.
Acting Chairman
They are ruled out of order on the basis that they involve a potential charge on the Exchequer. I am calling amendment No. 1, and as amendment No. 2 is equally relevant it must be taken in conjunction with amendment No. 1.
Sir, I do not like to disagree with you, but you said a few moments ago that amendments Nos. 1 to 24 would be taken together by agreement.
Acting Chairman
That has been contested.
There is no agreement. In fairness to Deputy Desmond, who circulated his amendments in good time, his amendments should not be taken in conjunction with other amendments. Deputy Desmond has prepared a very detailed set of amendments which ought to be discussed and voted upon first. If they are successful, we can proceed to vote upon the other amendments, which are marginally more generous. Perhaps it would be better to proceed in that way rather than to discuss these amendments together in a muddle. There is not and there never was agreement between my party and any other party in the House or the Chair to take all these amendments together. We would far prefer to take them separately. Deputy Desmond's amendments in regard to raising the tax allowance should be taken together and likewise the amendments put down by The Workers' Party should be taken together after Deputy Desmond's amendments.
Acting Chairman
The Chair accepts Deputy Bruton's point. The fact is that amendments Nos. 1 and 2 propose the deletion of exactly the same words from the Finance Bill.
The substitution of different words.
The original proposition was that amendments Nos. 1 to 24 should be debated together. There is no circumstance in which I would be prepared to debate 24 amendments in one lump. We know what would happen. There would be one lump of votes. That is not the intention of the Labour Party, nor, I am sure, is it the intention of the Fine Gael Party. I do not know what the other Deputies intend to do about their amendments. That is their business. I am not agreeable to discussing 24 amendments in one go.
There may be an argument for grouping amendments Nos. 1 and 2 together. This is an important issue. I want to have the debate on my amendments taken de novo without the involvement of other amendments. I tabled my amendments last Tuesday at 3 o'clock. I did not see any other amendments before this morning. In fact, they were not circulated until we got into the House. I have had no opportunity to go through the other 40 odd amendments. The House is being very tolerant, because additional amendments to section 5 were circulated ten minutes ago by Deputy Grogory. I want to take my amendment in splendid isolation, and we can go on from there.
Acting Chairman
I am accepting that the amendments will not be taken together, but, due to the compatibility of amendments Nos. 1 and 2 with almost exactly the same phraseology, in the opinion of the Chair it is most desirable that they should be taken together. They will be determined as the same question.
I beg to differ in so far as the amounts to be substituted are different. In Deputy Desmond's amendment the amount to be substituted is £4,800. In the other amendment the amount to be substituted is £5,000. This would have different implications for the budget and for revenue. They are distinctive amendments. They would have distinctive differences on budgetary policy. On that basis alone the two amendments should be taken separately.
The important thing is that the two sets of amendments would cost different sums of money. One would cost more that the other. It happens that the one which would cost less comes first. Logically we should take that one first and, if that is agreed, we can go on to take the other one which costs more. It would be wrong to take them all together. If a vote is taken at the end of a debate which has roamed over all two, the point will be lost. People will not understand what we are voting about. It would be better to take them stage by stage, to take Deputy Desmond's first and vote on it, and then take the other sets and vote on them.
Acting Chairman
Amendment No. 1.
We are dealing with amendment No. 1?
Only?
Acting Chairman
Yes.
Are you changing the ruling which you gave a few minutes ago?
Acting Chairman
The suggestion I made was that because of the relativity between amendments Nos. 1 and 2 they should be discussed together.
The argument put forward for not taking the amendments together was that one set of amendments was received earlier than the other.
That is not the only argument.
That is the basis of the argument.
Acting Chairman
The argument advanced is that it represents a different charge, not the date of submission.
That was the point made by Deputy Desmond. He is the person who put forward that argument. It was the only argument. Can we take it that, in actual fact, you are saying that if one person's amendments were received five minutes before another person's amendments——
That is not the argument.
Acting Chairman
That is not the argument.
That is the argument.
On a point of order, Sir, the argument you accepted was the one Deputy Bruton and I made that amendments Nos. 1 and 2 differ in their effects on the budget in so far as they have different cost implications for the Exchequer and, therefore, should be treated separately and discussed and decided upon separately. That is the argument accepted.
Acting Chairman
That argument was put forward, and that is the argument I am ruling on. Nevertheless when amendment No. 1 is put, it will also decide the issue.
If it is defeated it will decide the issue.
Acting Chairman
If it is defeated, yes.
If it is carried it does not decide the other issue.
Acting Chairman
No.
On a point of order, Deputy Desmond's amendment proposes to increase the limit to £4,800 and Deputy Sherlock's amendment proposes to increase it to £5,000. If we discuss amendment No. 1, Deputy Desmond's amendment, in isolation and have a vote on that and the matter is carried, do we then discuss the other amendment to change it from £4,800 to £5,000? Are we going to go on like this all day? It seems to be a matter of noughts and crosses. Amendment No. 1 proposes that the limit be raised to £4,800 and amendment No. 2 proposes to raise the limit to £5,000. In the next amendment Deputy Desmond proposes to raise the limit to £2,400 and Deputy Sherlock wants to raise it to £2,500. It is like betting in a race. One seems to be pushing the odds a little bit higher than the other. All the amendments Nos. 1 to 24 are about the same thing. Labour puts it up to one figure and Deputy Sherlock's party puts it a little higher. Are we going to go on with this all day?
On a point of order, I was not at any time judging the merits of either amendment No. 1 or amendment No. 2. I was making a procedural point of order that amendment No. 1 should be taken before amendment No. 2 on financial grounds.
Acting Chairman
The question on amendment No. 1 will be that the figure £4,000 in the Bill stands. If that stands then amendment No. 2 falls and cannot be moved. That is the situation. Therefore I ask Deputy Desmond to move amendment No. 1.
I move amendment No. 1:
In page 9, line 19, to delete "£4,400", and substitute "£4,800".
We face financial crisis. On Second Stage the Minister indicated, on 9 June, that broadly speaking the deficit by the end of June would be of the order of 100 per cent of the figure for the year as a whole and that this figure would be significantly exceeded by the end of September. Then he went on to say that he hoped to claw it back in the last quarter, and we live in that pious hope. The reality is that for any of the concessions that may be considered in the Finance Bill there are three choices to be made. We can add to the £679 million of current budget deficit. If we do not add to it we can impose alternative taxation to raise the cost of relief given on the general tax side. This was the dilemma facing the Labour Party in considering whether any amendments at all should be tabled to the Finance Bill for 1982. We have gravely depleted Exchequer resources. We have a budget deficit which is clearly going to be above and beyond the £679 million and we are spending this year about £350 million on unemployment-related expenditure, never mind taxation relief. We have a situation of political paralysis of a minority Government virtually unable to run the country at this point. At the same time we have to maintain basic Exchequer finances for basic social welfare payments for the £350 million of unemployment-related expenditure I have just mentioned, for the educational services and for our health services which alone run to about £900 million for 1982. If our Exchequer situation deteriorates into Exchequer bankruptcy — and I do not use these terms lightly — we are going to move into a situation of forced devaluation where neither the Central Bank nor the Department of Finance can prevent the Commission from bringing in the IMF to run this country because at the moment there is political paralysis. We should be under no illusion about that. The Government are incapable of governing because they have not a majority and are looking over their shoulder every five minutes.
(Interruptions.)
That is not the reason. We did not have a majority either but we had no fear about governing.
(Interruptions.)
Deputy Bellew, Deputy Bruton and the Minister, Deputy Connolly, I want the House to understand that while this debate is taking place the Chair will insist that it will be done in an orderly fashion and anybody who does not respond to that order knows the option that is available to him or to her. Deputy Desmond to proceed without interruption.
It is in the context that the Labour Party considered what the precise measures of relief should be in the area of general income taxation. We came to the conclusion that if there was one section of the community that merited particular consideration it is the very lowest income liability threshold and that is why we have tabled an extremely modest amendment for the Minister's consideration here this morning. We want to increase by an extremely modest amount, the sum of £200, the basic tax exemption limits for single persons, for married persons and for the elderly. I have not been able to cost it because the only information available to an Opposition, apart from going directly to the Department of Finance which would not be appropriate at this time, is to simply avail of the income distribution data available from the Revenue Commissioners. But with great respect to the Revenue Commissioners their last report was in 1979 and the last mistakes of that nature were made when Fine Gael said that their tax package would cost about £250 million and it worked out at about £500 million. It was not Fine Gael's fault but the fault of those who were advising them.
Therefore we have to be very careful when assessing the cost. But I would estimate it in very crude terms at about £10 million. It is of critical importance that for many elderly who are in, say, nursing homes and who are just on the tax threshold and for whom the burden and frustration and extreme anxiety created by filling in tax forms and maybe forgetting an assessement where they might be liable for tax at say £100 or £150 for the year, we raise the general exemption limits. But one should be under no illusion that for every £100 one adds on the cost rockets quite substantially because under the income distribution tables it is quite obvious that more and more people are brought in with every increment we give and they are brought in very rapidly indeed. So the Labour Party have proposed that the general exemption limit of £4,400 for a couple should be raised to £4,800 and that the single rate should be increased from £2,200 to £2,400 and that it should be proportionately increased for the elderly. There is nothing particularly novel in the concept we advocated. I quote from the budget presented by Deputy Kennedy, Minister for Finance on 27 February 1980. He said — and I agree with him — at column 725, volume 318, of the Official Report:
I am concerned that liability to income tax can apply to persons on very low incomes, particularly young people just starting work and casual or part-time workers. I cannot solve this problem completely but I am happy to go a long way in that direction by introducing complete tax exemption limits for people on low incomes, including those affected by sickness and unemployment. The exemption limits will be £1,700 for single and widowed persons and £3,400 for married persons. There will also be marginal relief at a rate of 60 per cent for taxpayers with incomes just above the exemption limit. As a result of this proposal, 75,000 persons who would otherwise pay tax this year will not now do so....
The Government are particularly aware of the difficulties and anxieties experienced by many old persons in completing their income tax returns and complying with their tax obligatons generally. In many cases this is out of all proportion to the ultimate liability involved. For this reason, I propose to raise the age exemption limits to £2,000 and £4,000 respectively for single and married persons aged 65 and over. Special exemption limits of £2,500 and £5,000 will be introduced for persons aged 75 years and over. These limits will remove 8,000 old persons from the tax net, bringing to 83,000 the number of low-income taxpayers removed from liability.
In the budget introduced in January 1981 by Deputy Gene Fitzgerald, then Minister for Finance, he continued with the general proposition. He said:
The introduction last year of an income tax exemption for those on low incomes was a particularly significant development in that it provided a worthwhile relief for the less well-off while at the same time ensuring that the relief was directed to those most in need. I now propose to increase the general exemption limits from £1,700 to £2,000 for single and widowed persons and from £3,400 to £4,000 for married couples. Marginal relief will be available for those whose incomes do not greatly exceed those amounts....
I also propose to raise the age exemptions which apply to the elderly. For those aged between 65 and 75 years the limits will be increased from £2,000 to £2,300 for single and widowed persons and from £4,000 to £4,600 for married couples....
These new exemption limits will remove 37,000 persons from liability to income tax and marginal relief will benefit many more.
I do not know how many people will be removed by the extra £200 change I suggest. Perhaps the Minister would give me that information. The point I am making is a critical one. I will not come into Leinster House with anybody breathing down my neck and put forward taxation relief proposals which will be a further major imposition on the current budget deficit and on borrowing from foreign banks or postponing the problem of raising alternative revenue. When making my proposals I said that in my opinion the cost of such relief could be met from other sources.
As the Chair rightly pointed out about two-thirds of my amendments relating to capital taxation and income relief were ruled out of order because under our Constitution, which is crazy in this context, an Opposition Deputy cannot impose any charge on any person. Only the Government can impose a charge by way of financial resolution and only the Government can recoup the money. The Opposition cannot provide any relief. This is the way our budgets are structured and it is unique in western Europe. It has been modified in the British parliamentary model——
On a point of order——
I was about to address myself to Deputy Desmond. The Deputy seems to be——
I may be digressing but——
——to be straying from the amendment. May I appeal to him to take all the amendments together——
No. I am on amendment No. 1. If amendment No. 1 is accepted I understand that under Standing Orders any other amendment which might be relative to it falls.
That is correct.
That is not so. What happens is that if Deputy Desmond's amendment is defeated as the section stands all amendments which have the same effect will fall, but if his amendment is carried and the Deputies want to give more generous reliefs, they will vote for Deputy Desmond's amendment, and then their amendments will be introduced.
I do not want to have to keep reminding Deputy Desmond that his contribution is not relevant to the amendment. I can see the Chair will have difficulty in this area. If Deputies are discussing amendment No. 1 alone, I will have to keep interrupting them if they stray.
I accept your ruling. I am surprised I got away with it for so long. I want to make two points.
Deputy Lawlor rose on a point of order.
On a point of clarification, my understanding is that we are discussing amendment No. 1. Therefore is Deputy Desmond in order when he debates the implications of specific increases rather than dealing with budgetary points which are not relevant to the amendment?
Deputies realise that Deputy Lawlor is endorsing what I said to Deputy Desmond a few moments ago. The Chair has noted with pleasure Deputy Desmond's promise that I will not be required to interrupt him if he inadvertently strays from amendment No. 1.
Perhaps we should let Deputy Desmond deal with the World Cup. He has not done that yet.
For the moment the Chair has more faith in Deputy Desmond's resolution than other Deputies. I am asking Deputy Desmond to proceed without interruption.
On a point of order, before the Leas-Cheann Comhairle took over the Chair there was a change of stance by the Acting Chairman at the time on the procedure that would be adopted for taking the amendments. He gave a ruling that he would take amendments Nos. 1 and 2 as they were about the same matter. He changed that, and I should like to know if that decision was based on Standing Orders or if it was just a ruling of the Chair. I submit that amendments Nos. 1 and 2 are about the same thing, although they differ marginally in the amount of increase sought——
The Chair indicated that amendments Nos. 1 and 2 would be discussed together but that at termination of discussion amendment No. 1 would be put in the form "That the words proposed to be deleted stand" and that, if that failed, amendment No. 2 would not be moved.
On a point of order, what happened was that the Acting Chairman, Deputy Moynihan, said that by agreement we would take amendments Nos. 1 to 24 together. I indicated immediately that as far as I was concerned there was no agreement and that I believed Deputy Desmond's amendment should be taken, discussed and voted on separately. I understand that position was accepted by the Chair. The debate has now commenced, and it would be wrong to change the ruling of the Chair once the debate has commenced. Amendments Nos. 1 and 2 have different financial implications.
I was indicating to Deputy Sherlock that he would have to discuss his amendment in this debate because if amendment No. 1 failed then he could not move his own amendment. That makes sense to me and I am sure it makes sense to all the Members of the House. I do not think we should get ourselves into any entanglements about it. It was accepted that that was the position. The Chair regrets that there was not, as Deputy Moynihan had sought, agreement to take amendments Nos. 3, 5, 7, 9 and 11 which were related and also amendments Nos. 13, 15, 17, 19 and 21 which were consequential. While there might have been rejection of that earlier, it is never too late to mend.
On a point of order, I have already moved amendment No. 1 and I have been speaking on it——
And others.
No. I have been speaking exclusively on amendment No. 1 which is my amendment. If I have digressed in the general approach to the amendment, I think the digression in the past 20 minutes has been more excessive. I will get back to amendment No. 1——
The Chair would like to remind Deputy Desmond and other speakers that they will be confined to what is in amendment No. 1.
I accept that even though it may take five hours to deal with it.
On a point of order, the amendments are to section 1 of the Bill and in normal circumstances any number of amendments to a section are dealt with together.
No. The Chair understands that the House is not agreeing to any departure from what has been established already. We should move on now without wasting any more time.
On a point of order, will the Chair clarify the ruling that if Deputy Desmond's amendment falls amendment No. 2 cannot be moved? Will the Chair explain the basis of that ruling?
The Deputy can make sure it does not fall by voting for it.
The question will be that the original figure stands, and, that having been decided, there will be no further discussion and the other amendment which would seek to put in a different figure will not be moved.
I am looking for support for my amendment——
The Deputy may well get it and then he will get a fright.
It would be extraordinary support in view of the fact that the Deputy voted for the financial resolutions.
(Interruptions.)
Let us get back to the amendment. The Chair asks Deputy Desmond to stay with the amendment.
On 25 March the Minister for Finance decided to improve the general exemption limits for those on low incomes. In his budget speech he made the following comment:
The limit for single and widowed persons will be increased from £2,000 to £2,200 and from £4,000 to £4,400 for married couples.
He went on to say that marginal relief will continue for those whose incomes do not greatly exceed these amounts. He said that the changes would remove 24,000 low income taxpayers from liability. This was in the budget introduced by Deputy MacSharry. The effect of my amendment would be to add 15,000 to 20,000 people to that number. I do not think that is extraordinary because when the general exemption limits were introduced in 1980 some 75,000 people were given the benefit of the exemption and a further 8,000 elderly people were added to the list, which brought the total to 83,000 people. Deputy Fitzgerald, a former Minister for Finance, gave exemption to 37,000 people in the 1981 budget.
Might I suggest to the Minister that he should accept our amendment? I appreciate the fact that it would involve a cost to the Exchequer but it should be simple enough to increase the number involved in a general exemption without any dramatic effect on the budget overall. Persons on very low incomes, the elderly poor, students who do casual part-time work, widows who do lowly paid employment, would number some 24,000 in all and that would mean taking that 24,000 out of the 800,000. This amendment would result in a small but significantly beneficial improvement in their circumstances.
There seems to be a competition here between the Labour Party and the Workers' Party about to whom to give the greater reliefs. Amendments Nos. 1 and 2 are related and 3 and 4 are related and one says one thing and the other says something else. This competition between political parties has gone on too long. I have a high regard for Deputy Desmond but his statements as Minister of State at the Department of Finance are not in agreement with what he is saying now. I find it very irritating now to hear him put forward such an excellent argument as to why we should not increase the current budget deficit while, on the other hand, he puts down amendments here designed to have that exact effect. His excuse is that of all the things that need to be done this would be the most beneficial for those on small incomes. It would not cost very much. That may be so.
There are two aspects involved: one is the increasing of the limits and the other is the effect of that on the budget deficit. We are all too prone to propagating more reliefs. This has been the pattern for a number of years. Every party has been involved in it. Every party is blameworthy. A halt must be called to this invidious practice. We cannot sustain a budget deficit such as we have at the moment. We will not be able to sustain it. On my calculation the deficit next year will be astronomical. Some adjustments will have to be made.
I do not care if we have elections every day of the week so long as we get a Government which will govern, a Government which will stick to its decisions. This perpetual adumbration of more reliefs and more benefits is destroying the country. I believe the majority of the people agree with me. The only people who refuse to see the realities of the situation are the politicians here in this House. I do not put all politicians in the same category, but up to the recent past the majority have been too prone to the sort of practices to which I have referred.
The budget deficit this year is very large and these amendments will increase the deficit still further. The country comes first, not party advantage. I oppose all these amendments on these grounds irrespective of their merits. We cannot afford any more concessions. I appreciate our opposition to these amendments may result in a General Election but if there has to be an election, let there be one and let us subsequently get on with governing the country.
The differences between these amendments are not very great. Deputy Desmond argues that our amendment seeks to increase taxation by giving exemptions to the lowest income groups. But these are the groups most in need. These are the people who benefit least. That is why we have tabled these amendments. Deputy Desmond wants to increase the exemption by raising the figure of £4,400 to £4,800 and we suggest raising it from £4,400 to £5,000 and he the figure of £2,200 to £2,400, we £2,200 to £2,500. The cost of doing that would not be very great. Further amendments are designed to prevent tax avoidance and tax evasion and so one could be set off against the other. We accept the principle of Deputy Desmond's amendments and we trust he will accept the principle inherent in our amendments. The increase being sought is justified.
The point of accepting any of the amendments which will increase the financial burden on the State cannot be taken in the present context when other amendments, further down the list, are going to continue that philosophy. If this amendment is not accepted it is nonsense to go on talking about them individually because this is the one sector we would all like to see getting maximum relief in any budgetary strategy. Deputy Desmond went on in detail about the reliefs given in this category in the last few budgets but, unfortunately, the first amendment we will have to vote against is one which would help people to get the maximum relief. The reality is that by the technical amendments which the Minister for Finance has put down we are committed to the present Finance Bill and no amendment which will increase the budget deficit will be tolerated from this side of the House.
There are anomalies and abuses in the tax system, and that is a matter for the Minister for Finance. At a time when the Exchequer is short of resources it is appropriate to deal with abuses and to make sure that everybody pays their fair share of tax and also to bring forward whatever revision in the tax system is practicable. Unfortunately, it is not possible to accept an amendment which will increase the budget deficit and then discuss costs as amendments are dealt with. We must get on with running the country, and should any of these amendments be successful and lead to another general election it would be disastrous for the country. Already the delay has cost the Exchequer £300 million——
The Deputy is straying from the amendment. Would he please return to it?
There has been much discussion on this amendment and I think it should now be put before the House so that we could get on with the various other sections.
I am rather surprised at the tone Deputy McCreevy and Deputy Lawlor are adopting in relation to reliefs to the lower paid. One would think there were no other ways of raising the finance required in order to provide this relief. We have already indicated that we have put down a large number of amendments. At this point I am not sure if any of them has been accepted because I have not gone through the list. Everybody knows there is widespread evasion and avoidance of taxation and there are amendments down in relation to the private rented sector which would bring in far more than the relief we are trying to give to the lower paid. Deputy Desmond has already made the point that the amendments which we can bring in are restricted to providing relief. If the amendments which we have put down in relation to wealth tax were accepted by the House there would be no problems about providing the few paltry pounds we are trying to get for the lower paid. I think it was Deputy McCreevy who said that the country must come first. The country consists of the people and the majority of the people are the workers, so it is invidious of him to say that something exists outside this House which is the country. We are talking about taxation on the workers and it is important that we should keep that in mind.
I support Deputy De Rossa. I also admire the outstanding contribution of Deputy McCreevy in bringing reality to politics. I applaud many of the things he has said, both inside and outside the House, because he is endeavouring, from an ideological viewpoint, to face up to the immense and terrifying problems facing us now. I support him in his honesty in that respect. The flaw in his argument is that he pre-supposes we have a fair and equitable tax system. We have not; and, if he accepted that point, I would agree with him totally. We have not a fair taxation system. While Deputy McCreevy may see nothing wrong with that, Deputy De Rossa and I are socialists and hold the balance of power at this time. It would be very wrong of us to let any Finance Bill go through the House when we are in a position to amend it. Deputy Desmond and Deputy De Rossa put down very modest amendments which will not in any way alter the picture he has painted. It will bring some help and relief to people who are very badly off. I will have no qualms in supporting either of the two amendments while at the same time endeavouring to face up to the larger question of employment and housing. Deputy McCreevy should reassess his position in the light of what I have said.
We have heard from a number of Fianna Fáil backbenchers on this subject and it would be helpful at this stage if the Minister would tell us what attitude he is taking to Deputy Desmond's amendment.
What attitude is Deputy Bruton taking?
I have no objection to telling the Minister what my attitude is but I think the Minister should indicate what his attitude is.
I will be replying to the debate.
Not on Committee Stage——
The Chair will call people as they offer to speak and if nobody else wishes to speak the Chair will put the question.
When the Minister speaks I intend to come in again because we are on Committee Stage. I want to make a point in relation to my amendment and to refer especially to what Deputy McCreevy said. I repudiate and reject that the Labour Party, in tabling this amendment, are engaged in a competition to provide tax relief. We are not. If the Minister for Finance says he will give the relief sought in the amendment for the very lowest income bands, that he will introduce on subsequent Stages of this Bill counter-balancing taxation, impositions on the people as a whole, he will have my support. I am not asking for something for nothing. In a Finance Bill where we can give the 1,600 wealthiest people——
That is not relevant.
It certainly is relevant.
Deputy Desmond, you cannot anticipate decisions I will make on the relevance or otherwise of what you are saying.
I want to make my point.
I am only interjecting to tell you that I will decide as to the relevance of any point being made.
Within Standing Orders?
I want to make the point that if the Minister for Finance can give £4 million of taxation relief to the 1,600 wealthiest people in the country who set up discretionary trusts and give them the relief whereby we charged a lousy — I use the word deliberately — 3 per cent on establishment of the trusts and 1 per cent annually thereafter — as low as that, which was worth £4 million — the Taoiseach, Deputy Haughey, in particular, could take it out of the Finance Bill when I am putting it back in by bringing it up on Report Stage in this House — and I will vote for it. That is the answer to Deputy McCreevy. If, for example, as I object to giving wealthy farmers one-half of their rates liability——
Deputy Desmond, we are not discussing wealthy farmers in respect——
It is entirely relevant.
Would the Deputy please give way? As far as the Chair is concerned there is no point in discussing wealthy farmers on figures that are here before me of £4,000 and £5,000. I do not think——
A Leas-Cheann Comhairle, with respect——
Would the Deputy please give way? Would Deputy Desmond please resume his seat until I have finished?
I am not trying to make a great issue out of this. I am trying to elaborate on an amendment in this House and the Chair will not stop me.
Will you resume your seat, Deputy, and I will be the judge of whether I will stop you or not. I am indicating to you that I am at a loss to see the relevance of wealthy farmers and your amendment, and——
May I, on a point of order, explain why——
Would the Deputy allow me finish? While I can see you making a passing reference to wealthy farmers or discretionary trusts I am advising you that you should not develop either point at any great length and, if you do, I will be called upon to interrupt you.
I have no intention of developing or repeating any point at excessive length. But I would remind you, coming from your background, a Leas-Cheann Comhairle, in the west of Ireland, that you should know such a person as a poor farmer, and there are farmers in this country who are extremely poor. Some of them are liable to income tax by virtue of having pensions, gifts, annuities and so on and they come within the threshold limit of the exemption rates about which I am talking. There are also wealthy farmers——
Deputy, you can have that cheap argument, but you were discussion wealthy farmers, you were not discussing my forebears. Would you please proceed?
I make the point that it is entirely feasible in this country that we should give this kind of taxation relief, entirely within the absolute competence of the Minister for Finance to say across the House: "I will give you the relief, you will have to agree that we bring in additional taxation to the tune of £10 million, £12 million or £14 million — because I do not know the precise amount it will cost; I am working only on the old 1979-80 income distribution figures, which are the only ones available." If the Minister comes in here and says that, I shall go along with him, he will have my support. It is perhaps unusual that a Finance Bill can be amended within that kind of structure.
In conclusion on this point I should say to Deputy McCreevy and Deputy Lawlor that I am not asking for anything for nothing. I am not engaged in that kind of competition. It is entirely possible to cover the increase in the budget deficit in that context. In conclusion I would remind the Minister that he was able to give £40 million of PRSI relief and there was not a scattering of a whimper, even from the backbenchers, even from Deputy McCreevy, with respect, with whose sentiments I agree, but who does have the habit in the voting situation of sitting on the fence until it is quite painful to his posterior. I would remind Deputy McCreevy that when the £45 million of PRSI relief was given, which is four times what I am asking for, there was no comment made as to where the money would come from; it was just paid out because we were in the middle of a by-election and nobody would dare raise the matter. So what is sauce for the goose will be sauce for the gander and we must work it out in the House on this basis.
I think my amendment is appropriate. I should like to hear from the Minister what is the true cost, as estimated, and what is the number of people who will benefit. I am open to debate; I am not interested in general elections, by-elections or whatever. I want to get a decent Finance Bill through the House and that is the importance of the point we are discussing.
Let me say, first of all, that normally in regard to such amendments, like those numbered 1 to 24 before the House, the House agrees to take them together because the same arguments or discussions would follow on any single one of them. However, the House has decided differently and we are dealing just with amendments Nos. 1 and 2. In replying I will give an answer to Nos. 1 and 2 which, in general, is the answer to all of them between Nos. 1 and 24.
The increases proposed in the Bill, while not matching those in the amendments, nevertheless are extremely generous when compared with the January budget proposals of the previous Government which provided for no increase whatsoever in the exemption limits. The increase in the exemption limits, all of them from Nos. 1 to 24, and the associated marginal relief outlined in section 1 of the Bill — that is the amount I gave in the budget — will cost £7.8 million in 1982 and £12.3 million in a full year. The additional increases in those figures proposed by the amendments — taking the series of amendments in the names of The Workers' Party representatives — would cost £6.5 million this year, £10 million in a full year and would exempt 32,000 taxpayers approximately from liability. Deputy Desmond's series of amendments, then, would cost a little less, approximately £4 million this year, £6 million in a full year and would exempt 19,000 taxpayers.
The increases in the general and age exemption limits, proposed in the Bill, cannot be viewed in isolation from the main structure of income tax allowances, including the special PRSI allowance in respect of high rate contributions to PRSI. In addition to the 25,000 persons removed from the tax net as a result of the revised exemption limits, a further 7,000 were removed from liability as a result of the generous increases in these allowances. Therefore, on the whole, the increases in the general and age exemption limits, coupled with increases in the personal and secondary allowances, are the most favourable which can be offered to lower paid and aged taxpayers in the present difficult budgetary circumstances.
In addition I should say that if any such change was brought about at this stage in exemption limits, child allowances or the tax regime generally, it would delay the issue of new tax-free allowance certificates for the £312 allowance and would affect direct assesment under Schedule D. New certificates of tax-free allowances for the £312 allowance might not be issued until as late as November next; that is the earliest date I consider possible. Then there would be delay in getting out direct assessments which would seriously affect the yield of Schedule D tax for the year 1982. Deputies generally must appreciate, from their experience over the years, that it is important to endeavour to have a tax regime decided and operational as from 6 April; that did not happen this year. Already we have had two issues of tax-free allowances, we are going into the third and any such changes would entail a fourth issue.
I have observed some contradiction in Deputies' statements in relation to not pursuing proposals that would add to the budget deficit or the level of borrowing. That is exactly what we are now discussing here. On one series of amendments or the other we are talking about a figure of either £4 million or £6.5 million additional budget deficit and an increase in the level of borrowing. When one contrasts that with, I will not say abuse, but definitely very severe criticism that I, the Government and this party have received over the last number of weeks since 2 June — on the basis of changes from budget day proposals to the publication of the Finance Bill on 2 June, amounting to a large amount, fantastic according to the propaganda attaching to it, of £2,500,000 — I hope Deputies on all sides of the House realise that we are not merely talking about £2,500,000 now, for which I and the Government have been criticised, but about £6.5 million or £4 million in the series of amendments appearing under the names of representatives of The Workers' Party or those of the Labour Party. That I cannot accept in the difficult budgetary circumstances.
The purpose of the amendments, as I gather from the spokesmen, is to do something further for the lower paid. Everybody would sympathise with that but it is hard to decide how to go about doing it. There may be other ways during the course of the year when it can be done, but it is not realistic to change the tax structure that we have already had difficulty in changing twice because of the delay caused by two budgets. We must bear in mind that if any such changes were accepted or if they were voted through they would not become operative until November or December next, which would be right on top of next year's budget. There may be other ways in which the lower paid can be helped and I would be prepared to look at them so far as any concrete suggestions can be made. I have to oppose the amendments put down to section 1.
I want to say a final word in relation to the overall structure of taxation and to give the reason why we have this exemption limit in personal allowances, child allowance changes, and tax band changes. I want to emphasise again what I did and had only time to do in the context of the election, my appointment on 9 March and the budget on 25 March to ensure that, generally speaking, the individual taxpayer got the same benefits as proposed on 27 January under the tax credit system. I succeeded in doing that with this package of measures, and changing any one item distorts what was proposed on 27 January and therefore, cannot be accepted. There is relief given to the lower paid from £2,000 up to £8,000 for the single person. What is in operation now is only marginal, but for all of those income categories there is a gain under the system now in operation as against the tax credits. It is important to make that point. It was a package of measures covering exemption limits, personal allowances, reduction in the child allowance and a change in the rate band to do effectively what was proposed under the tax credit system. We succeeded in doing that give or take £5 per annum on the higher end of the income bracket.
The PRSI concession was mentioned, and it is important that I should say a few words on that. We gave the £45 million and we did not do anything about getting the money. I said then, on numerous occasions since and I repeat again now, that is my job, we gave the £45 million arising from the hardship created as a result of the changes in the levels of contributions, the delay in the budget, the delay in the issue of certificates of tax free allowances. All those together had a tremendous impact on thousands of workers. We saw that impact reflected in the attitudes of people at that time as well as in this House on all sides. The Government moved to ease that difficulty and said that through expenditure savings or additional taxation we would make that good. That is still the position.
I have been asked today to add to that situation. It is all very fine for those proposing a loss in revenue to say that if there is a financial resolution tomorrow and if there is such a proposal another day they will willingly accept it. That has not been the practice over the years. If there are realistic suggestions, which can meet the wishes of all the House, any Minister for Finance will gladly look at them because of the difficult budgetary situation.
I must oppose those amendments for the various reasons I have given. I hope careful note is taken by all concerned in the House of the minor changes in relation to two items in the budget of 25 March and the publication of the Finance Bill on 2 June and the criticism levelled at us over the loss of £2,500,000 revenue on section 1 of a 96 plus section Bill and we are being asked to lose a further £4 million to £6,500,000 this year.
It is £4 million this year.
It is £4 million to £6,500,000 depending on which grouping of amendments you are taking.
We are talking about amendment No. 1.
We are discussing amendment No. 2 as well which is relevant to the other series of amendments. I said, as of necessity, I would give the reply in a global fashion, as is normal when amendments such as those have been taken consistently over the years. As far as I recall over the last 30 years they would have been taken together by agreement. That was not done, so I said that is a matter for the House and we can continue to discuss the other series of 24 amendments in blocks of two, if the Deputies like, for the next two weeks, but that is not making any progress in relation to the many important points that many Deputies would like to make on other sections of the Bill that it may be possible to consider. I have made my position clear in relation to these amendments. If there are any further questions I will be glad to reply to them.
The Minister asked for suggestions as to how he could help the low paid who are the group at stake in those amendments. The people with low incomes face problems in relation to PRSI where there have been very substantial increases. The Minister introduces a tax allowance, which gives them very little benefit because most of them are paying very little tax against which they can offset the PRSI allowance. That allowance gives very substantial benefits to the better off who are on the higher tax rates.
The Minister had one suggestion how the lower paid could be helped, the family income supplement contained in the January budget which he threw out the window. I do not think he can ask us to seriously accept that he is interested in serious constructive suggestions or in co-operation of any sort from this side of the House in regard to this matter when he so unnecessarily threw out the family income supplement, which was directly designed to help the very people about whom he is now pretending to be concerned, the very lowest paid, many of whom are so low paid that they do not pay any tax whatsoever. I do not think he can look with a plaintive expression to this side of the House for help when he so unnecessarily rejected measures we had in mind in our January budget to help the low paid. He has no call whatsoever on our support in this matter.
I believe the point at issue here is a wider one than simply taxation. It concerns the whole question of incentive to work. Some years ago people who were in the average type low paid employment did not pay any income tax and income tax did not worry them, but because of a succession of changes, increases in tax levels and a reduction in the real value of tax allowances they find themselves, even at the lowest incomes, paying income tax. We, likewise, find that other people who do not work at all, who are on welfare of one description or another, are actually able to have a bigger take-home pay on the same gross income than a person working, because tax is deducted from the working person's gross income tax but not from that of the person who does not work. We offered the Minister a way of helping the low paid at work, of restoring the incentive to work, in the form of our proposal in the January budget to tax short-term social welfare benefits. As well as throwing out the family income supplement which would have helped the low paid at work, he also threw out that proposal, although it would have made the situation equitable as far as the low paid at work were concerned vis-à-vis those with the same income on social welfare benefits who now get more than those at work. The Minister had an opportunity to put these people on an equitable basis by taxing short-term social welfare benefits. He has no call on our support in this situation.
This is a Finance Bill which represents the central thrust of the economic and financial strategy of the Government. Are the Government, through the spokesmanship of the Taoiseach and the Minister for Finance, asking us to support that financial strategy? Are they mad? That financial strategy is based on one of the most ridiculous tax proposals ever put forward, namely, the advance payment of value-added tax. This will bring forward artificially into this year money from next year without at all improving the budget deficit situation in the long term. We will not support that sort of strategy. It does not really tackle our economic and financial problems and the Minister must himself know that it is creating a highly unreal situation.
The issue in this Finance Bill is not just a question of this £4 million. That is not a very large amount. The issue which we are discussing here is whether we want this Government to continue governing this country. That is an issue upon which we in the Fine Gael Party have not the slightest doubt as to where we stand. We want them out.
Deputies
Hear, hear.
We want an end to the deals. We want a majority Government of which we will be the leader. That is our aim in this debate and in any subsequent debates if there are any in this House. We do not want any more Gregory deals, or ambiguous agreements or withdrawals of agreements in relation to Ardmore Studios. We do not want any more changes in PRSI to justify making promises without considering where the £45 million is to come from.
The Deputy is experienced enough to realise that he would now seem to be embarking on a budget debate. I know that he will say that the Minister has referred to some matters, which he has, and the Chair would allow the same freedom to the Deputy, but would hope that he would not extend the consideration of amendment No. 1 to the point where every Deputy who rose would feel free to wander too far from it.
Certainly. I refer now to a matter raised by the Minister. As the Chair allowed him to refer to it I am sure it will afford me the same latitude. That concerns the question of the missing £45 million to pay for the allowance which the Minister decided to give, predominantly to the better off at work, in regard to PRSI. At every available opportunity I have sought from the Minister where he is going to get this money, what taxes, what expenditure cuts he has in mind. He has consistently refused this information, although he had no trouble in giving the concession when it seemed to cause him embarrassment not to do so in the run up to the Dublin west by-election. He had no difficulty then in giving a concession costing £45 million. He has very great difficulty in telling the House now where he is going to find that money. He says, when asked, that he will find it by expenditure cuts or, if not, by taxation. He does not say by what taxation or how much, or by what sort of expenditure cuts. This is a Government who will not tell the people their plans, but ask this House to give them confidence on this section of the Bill. We cannot have any confidence in a Government who deliberately conceal from the people their plans in regard to taxation.
Suppose we pass this legislation, where are we then? We know that there is a further £45 million which the Government will have to find some way or other. But they want us to pass this legislation on faith. We are not prepared to leave it to the Government to find that £45 million any way they like, by the imposition of duties orders introduced during the Recess, which the Dáil will have no opportunity to debate until October or November. We are certainly not prepared to let them use the same procedure which they used before the March budget, to introduce tax increases before that budget was introduced, without debate in this House. We are not going to allow them to raise this £45 million that way during the Recess to get out of this House safe, not having told us where they are going to get this money. Once the House is safely dissolved and they sink with relief into their chairs, they can issue an order raising all this £45 million by the imposition of duties orders of one sort or other. We have been seeking at every opportunity that arose, to get this Government to say where they are going to get this money first when the motion for the allowance was introduced, then on the Second Stage of the Finance Bill, then on the Order of Business and otherwise. They have refused to say. That is financial irresponsibility.
One thing which business people and the people at large cannot stand if they want to plan for the future and arrange their own personal financial affairs is uncertainty. There is no prospect of certainty about anything in this country as long as this Government last. Nobody can plan anything, because they do not know from one day to the next what the Government are going to think up. We want to clear the decks, we want a Government who can govern and who if they say they will do something, will do it, who will stand over their word and not continually concede.
Did the Coalition Government stand over their word?
This Government do not pass that test and cannot look for support from this side of the House for their continuance, in view of that.
Deputies
Hear, hear.
I never cease to be amazed in this House at the irresponsible antics of Deputy Bruton who would masquerade as the most responsible person in financial matters on other fora and in the media.
(Dún Laoghaire): Has the Deputy never known his own party to do that?
If the Deputy would care to repeat outside what he said, I will oblige him with a full discussion elsewhere at any time.
Deputy Bellew is neither required nor allowed to take issue on these matters. Please disregard these disorderly interruptions.
I will do my best to disregard the interruptions.
I know that the Deputy will succeed.
In my small contribution to the debate on these amendments, I would not blame any member of the electorate for wondering at the relevance of this House, in view of the antics which have taken place since last January. We then had a budget brought in by Deputy Bruton, which suffered defeat certainly on two of its major principles. We had in the meantime an election in which the issues were put very clearly before the people, particularly in relation to the point mentioned by the Deputy on the family incomes supplement, and to other matters. It was made very clear and accepted that those items would be abolished in any subsequent budget introduced by this party. The Deputy cannot cry crocodile tears and pretend that, if given the opportunity, he would rectify our financial affairs and improve on this Government's performance.
One cannot be faulted for questioning the honesty and integrity of Deputy Bruton when he suggests that the money could be found in some other way. His attempt last January failed and we are now six months ahead but have not managed to get the necessary legal requirements completed to collect the full revenues necessary to run the State and to embark on a course of rectifying the national finances. It is sheer hypocrisy to start suggesting — I am not very worried about it — that we should have another General Election. I am confident of the outcome of such a contest, but I do not think the electorate would thank any side of the House that created a situation in which we would have a third such contest in 12 months.
The Minister for Finance has outlined what is necessary in order to correct the financial situation. With respect to the members of The Workers' Party and to Deputy Kemmy who is not now here, I say to them that they have not got the monopoly of representation of the workers in this House. Until the day of the general election in February I was a PAYE and PRSI contributor and I know and appreciate the problems and the difficulties being experienced by such contributors. Those workers have a sense of responsibility to the community at large. It has been said that this inanimate object, the State, does not exist outside. Of course it exists. Everyone of us, all the workers in the country, are part of it——
(Cavan-Monaghan): He seems to be wandering a bit.
I am trying to discuss the matter as best I can. I am referring to points made by various speakers and putting forward my arguments in support of the Minister's contention that the section should stand.
Deputy Bellew will appreciate the Chair's difficulty. I must direct the attention of every Deputy to what is in the amendment being discussed. Although Deputies objected to taking a number of amendments together — the Minister in replying said he was referring to a number of amendments — in spirit the Chair is allowing a certain amount of latitude which I hope will not be abused by any speaker. I am asking Deputy Bellew, having referred to the background, to address himself more specifically to the amendment which calls for the substitution of one figure for another.
I will be as relevant as I can. Specific matters were referred to by the proponents of these amendments and it is important that there should be discussion on those points. We are entitled to put the other side of the coin. Deputy Kemmy spoke of jobs and housing, both critically important problems, but it is necessary to provide finance for these things. The rules of the House constrain one from discussing loss of revenue. Deputies so far have avoided suggesting how the shortfall might be made up, and if we are to accept the integrity and the honesty of the spokesmen for Fine Gael and Labour particularly, and of The Workers' Party, one wonders why they have been avoiding their responsibility by failing to suggest alternative methods by which the shortfall could be made up. Deputy Bruton spoke of specific proposals, but these were rejected by the electorate in February, and from that point of view they are not a viable proposition.
At this time of year we must bear in mind the practical difficulties attached to amending tax-free allowance certificates and the frustrating and demoralising effect it would have on PAYE contributors. This is not the appropriate time to amend the amount from £4,400 to £4,800 suggested in Deputy Desmond's amendment, or to £5,000 as suggested by Deputy De Rossa. It is undeniable that there should be restructuring of the taxation system, but practical difficulties would not allow it to be done now. The recommendations of the Commission on Taxation can be considered at a later stage.
I am at a loss to understand the speech of the Minister. He took The Workers' Party amendment with which he grouped Deputy Desmond's amendment and put an overall costing on them. I understand that the House is discussing amendments Nos. 1 and 2, and if we are to assess the impact of the amendments it would be desirable for the Minister first of all to give us a costing on amendment No. 1 and then on amendment No. 2.
With regard to what Deputy Boland said I understood that there was a costing of £4 million to £6.5 million. I should like to query what the Minister said. He mentioned a figure of 32,000 people in the PAYE sector who would benefit if the amendment of The Workers' Party was accepted and 19,000 people if the amendment of the Labour Party was accepted. Deputy Bruton mentioned the family welfare supplement and the Minister in reply said that there may be other mechanisms under which this category of taxpayers would get maximum assistance. Will the Minister clarify what he meant by that statement? Is it his expectation that something in that area will be forthcoming in the report of the Commission on Taxation? When does the Minister expect that that report will be made available? Will the Minister give due recognition to the recommendation on PAYE in the report and bring it forward as quickly as possible?
The Labour Party amendment sets out to remove from the tax net 19,000 people who are at present paying tax at the lower rate. The Minister's cost of that is £4 million this year and about £6 million in a full year. The Labour Party are engaging in a democratic process by tabling such an amendment. I am at a loss to understand the contributions from the Government backbenches. I must ask myself: where were those responsible people last January when they voted against a proposal to increase the price of drink?
We are looking for the approval of the House — this is the correct procedure — for our suggestion. The Minister mentioned the relief to be granted at a cost of £45 million. We all welcome relief given to any taxpayers, but the kernel of his relief is where the money will come from. That question remains unanswered.
There is grave concern about the question of public accountability. In my view public accountability means that if relief totalling £45 million is given to any sector it must be costed and public representatives told where it will come from. Fianna Fáil backbenchers have suggested that we are competing for votes, but our proposal is realistic. I must take the Minister to task on his refusal to proceed with the proposal contained in the January budget to implement a tax on discretionary trusts. In the course of his statement on 25 March last the Minister said——
I should like to remind the House that certain latitude has been taken, and reluctantly granted, in regard to this amendment. I hope that when other amendments are being discussed the House will accept that the debate on amendment No. 1 ranged to the point where the Chair will not tolerate any repetition during the discussion on subsequent amendments.
I agree with the Chair and I believe the latitude may not be necessary on later amendments. On taking discretionary trust, in March the Minister said he had considered this approach and concluded that this would be an insensitive and over-simplified approach to the problem. He told the House that he was referring the matter to the Commission on Taxation. The imposition of tax on discretionary trusts would affect a very select number of people in our society. For the Minister to say that that is an over-simplified approach, and to say today on this amendment that he is unwilling to offer relief to the most needy and deserving in our society lacks logic.
The Labour Party are adopting a responsible approach in regard to the democratic process, and I urge all Members to adopt a similar procedure when suggesting proposals for tax or PRSI relief. If that is done we will not end up with proposals that lack economic planning. I urge the Minister to reconsider his position in regard to this.
In regard to the contribution by Deputy Spring I should like to state that on numerous occasions I said that the £45 million would be provided through expenditure savings. I said we had undertaken a total expenditure review in all Departments and that Departments would report to the Department of Finance and the Government by the end of May. Those reports are now being examined to see what expenditure savings can be made. When we see the extent of the expenditure then, and only then, will additional taxation arise. That is the situation and I stand firm on it.
Discretionary trusts have been mentioned by a number of Members. I have already stated that I was referring that to the Commission on Taxation, and that has been done. I expect the Commission to comment on that matter.
Deputy Boland asked me why I had given the overall costs of the 24 amendments as against two. That was done because, as is normal practice, the items had to be worked out by computer. The 24 amendments are being discussed together and the same reply is relevant to them all — they all raise the same issue about exemption limit increases — and it follows that I should give the costing for them all. If, for example, there is a change in the single allowance it is doubled for the married allowance and so on. That is why I gave the global reply. I do not have the detailed costings of the 24 amendments and I will not be able to give that information until the matter is put through the computer again. It would be necessary to wait until tomorrow for that information.
I should like to refer to the first contribution we have heard from Deputy Bruton. The Deputy referred to the need for helping the lower paid and said his way of doing that was through the family income supplement. About one-eighth of the people who were entitled to that supplement applied for it. I will not delay the debate by itemising the wealthy contractors and dealers of one kind or another who would have qualified for that family income supplement. Deputy Bruton said he could not support the financial philosophy of VAT on imports at the point of entry or the bringing forward of corporation profit tax, but we know what his party and Government were prepared to do. There was very little for the lower paid in his budget when one takes into consideration that it was intended to impose VAT on footwear and clothing and remove food subsidies. That is the alternative. The proposal of Deputy Bruton in January last affected the lower paid a lot more than the imposition of VAT on imports at the point of entry or bringing forward corporation profits tax to the stage where such corporations will be paying tax six to nine months later than their financial year while the PAYE worker pays on a Friday night. I do not think the Opposition are realistic when they talk about the differences between the two types of approach on taxation.
As I have said on many occasions, the level of PRSI contributions in operation are identical to what was proposed by the then Government on 27 January. The only exception is the £45 million. There was absolutely no suggestion at any time from any source within Fine Gael or Labour, who made up the Coalition, of helping the lower paid because of the extent of the PRSI contributions. It is all very fine now for those on the Fine Gael benches who consider themselves infallible and who consider whatever they say to be speaking ex cathedra. They do not consider that anyone else is honest. The only honest politicians and realistic people are in Fine Gael.
Hear, hear.
The Opposition will get their answer to that as they did before. From 27 January until 9 March the infallible group, particularly in Fine Gael, who were standing firm on their 27 January proposals, which included VAT on footwear and clothing and the abolition of food subsidies, made every effort to change that stance to try to see if they could achieve government. That is an undeniable fact, as those who speak with such honesty, sincerity and infallibility know.
We have been getting lectures from every side of the House on budget deficits and the level of borrowing. What these amendments do is increase both. Those who vote for them should realise exactly what they are doing. There is no other explanation for it. Those who have been preaching about the level of the current budget deficit and the high level of borrowing should answer how they can remain credible if they vote for these amendments which will increase both. As an ordinary five-eighth and not too well educated individual, I should love to know how people can still retain their credibility and do that. Perhaps someone will explain to me.
It is the same way as the Minister voted against 2p on beer and put twice that amount on it later.
There may be the same difference or it may be the same thing. We never claimed, nor were we ever given credit for, being the only honest and infallible party in the country.
The Minister said that.
That kind of grace is bestowed on the Fine Gael Party.
(Interruptions.)
What I am saying is the actions and statements which have led you to the situation where that kind of tag is attached to you——
The Minister has joined the band.
The public will have an opportunity to see you voting against the very principles you have been expounding for a long time.
I was about to direct the attention of the Minister to the fact that inadvertently he was using the second person and addressing all those compliments to the Chair.
Through the Chair.
Well deserved.
I should like to thank the Minister for what he had to say about what other people have said about this party. It is not something we said. I am glad the Minister, even ironically, has joined in that encomium.
Stand by it now.
The Minister claimed that only one-eighth of the people who were eligible for the family income supplement claimed it. One-eighth of the people eligible for the £9.60 claimed it. However, not everybody eligible for the £9.60 was eligible for the family supplement. The Minister has no basis for that statement. He should check his figures. He would have to check the tax liability of everyone who claimed the £9.60 to determine whether they would be eligible for the family income supplement.
They applied for the £9.60.
Yes, but the Minister said one-eighth of the people who were eligible for the family income supplement claimed it. That is not true.
One-eighth of the people eligible for the £9.60.
People at any income level are eligible for the £9.60 but only those with incomes less than £4,000 a year are eligible for the family supplement. The majority of those who claimed the £9.60 I imagine were in the lower category. The Minister's figure is not correct.
The Minister made much of the corporation profits tax and our objection to bringing forward the date of payment and that of VAT. I do not say that at some time in the future, with due notice, payment dates for particular taxes should not be changed. There is nothing wrong with that if it is considered in a proper context. I object to artificially and basically fraudulently reducing the budget deficit for this year by bringing forward the tax for next year. It is the fraudulent character of the exercise as far as the budget deficit is concerned, not the substance of the measure, that we strongly object to. It is on a par with the attempt to conceal reality with the attitude of the Government towards Ardmore, the Gregory deal and the £45 million PRSI allowance. They will not tell us what they are doing. They do not know what they will do. They do not know where they are going, and should not be governing.
We should all like to see the threshold limit raised to this figure. For a long time I have listened to lectures on the economy. During the last election I can remember cards being pushed through letterboxes indicating the alleged lavish borrowing of Fianna Fáil. Recently I heard the former Minister for Finance speaking in terms of economic and financial rectitude. These are great terms. I took a trip to the library and got out a dictionary. I had a look at "rectitude" to see how it is defined. After going through its origins somewhere back in the 14th century, I found "quality or fact of being straight", "straightness". "Straight" is the biggest trick-of-the-loop I have discovered from the Coalition. There is no other way to describe it. They are not going straight. They are doing U-turns and twists time and time again. If the former Minister for Finance wants to talk about economic rectitude he should look up the various meanings of the word in the dictionary. I am quoting from the Oxford English Dictionary, volume 8.
Would the Deputy like a copy of Standing Orders? The Deputy may feel he is justified in following the bad example set by earlier speakers. He should not stray too far from the terms of the amendment in the name of Deputy Desmond, which seeks to delete one figure and substitute another.
Thank you for your word of caution, and I will accept it. I promise that I will keep to the path of rectitude on the amendment. I will keep in a straight line. The second usage of the word is a "straight line; direction in a straight line". On this amendment if you are on the Coalition side of the House you can take a straight line but in which direction are you going? You are going in your own direction, on your own judgment of how you define rectitude. I will not delay too long on that because I am anxious to go on further.
We will soon be at high infants.
The next definition is "moral straightness or uprightness; goodness; integrity; virtue; righteousness". Each Member of the House would qualify under that definition and I do not intend to dwell too long on that aspect of rectitude. The next one is "correctness of the (intellectual or artistic) judgment, or of its conclusions". Fine Gael and probably the Labour Party are embarking upon the sale of the century and we can talk in terms of correctness of intellectual judgment and artistic judgment and its conclusions. I will leave it to the former Minister for Finance to discuss the intellectual judgment involved in this amendment and to align it to his much used phrases "economic rectitude" and "financial rectitude".
I never use either phrase.
Does the Deputy want to come in at this stage?
The Chair decides who comes in and occasionally who goes out. Could we have Deputy Murphy speaking to the amendment?
The next definition is "correctness of nature, procedure or application". We would all like to see personal allowances increased, but can we afford these increases? How can people say they will support this amendment and yet go around talking about recklessness in borrowing, not balancing budgets, leaving huge deficits, in the overall context of economic rectitude? A definition of a rare use of the word is that it is a right. Would the former Minister for Finance care to comment on his support for this amendment under the definitions of rectitude in this dictionary? I accept that he is genuine and straighforward from the point of view of rectitude, moral straightness, uprightness, goodness, and integrity. It would be great if the money could be found to implement this amendment. Hopefully it can be found, but we cannot have it both ways.
I should like to compliment Deputy Pattison on his performance as Acting Chairman on a number of occasions. Getting back to the amendment, does Deputy Desmond realise that his party were a party to a budget some months ago which would have imposed totally unjustifiable taxes on the less well-off sections of the community? I am referring to the imposition of VAT on footwear and clothing. At the same time they said that our finances had to be put in order. Now he says the tax bands should be broadened.
That is not what this amendment is about. The Deputy should read the amendment.
I did not interrupt Deputy Bruton and I would appreciate it if he would have the courtesy to keep quiet while I am speaking.
I am helping the Deputy to be accurate.
I do not need any reference books to understand what Deputy Bruton was saying. We all agreed with his policy of going straight and putting our finances in order. He is now opposing the Government's attempt to reduce our budget deficit. We are told that these amendments should be made, but the Opposition do not say from what source the money should come. Deputy Desmond might tell us where he proposes to get the increased revenue to make the necessary adjustments.
We are told these amendments would cost between £4 million and £6½ million. We know the Government introduced changes in the PRSI which will cost £45 million. The Minister for Finance explained that this will be provided by means of cutbacks. Do Deputy Bruton and Deputy Desmond want further cutbacks in order to implement their amendments? For the past number of weeks and months they have been talking about the problems of the PAYE workers. We all know PAYE workers pay their taxes every week, yet the Opposition are objecting to companies being asked to bring forward their payments of corporation tax. Are they playing the two sides of the fence and trying to have their loaf and eat it? That seems to be the policy that is being adopted. We hear from that side of the House that the finances of this country have to be put in order. Yet they are not prepared to help the Government to do that at the moment. What they feel is that the country should not be governed by a Government who are prepared to tackle the problems now before us. We have the problem of budget deficits. Yet here today we see another attempt by people on the Opposition side trying to increase that budget deficit without saying where the savings can be made to allow the implementation of this amendment.
Deputy Bruton spoke at length this morning but he still did not tell the House where savings could be made. I ask him and Deputy Desmond to tell the House what changes can be made to allow a change in the tax bands. It is very different from what was proposed in the Coalition budget brought in in January that was voted down by this House. I suppose it is a case of putting down amendments to try to bring down the Government, but the people do not want this type of politics to be carried on. They want to see Government by a Government prepared to carry on and do the necessary work. Whether we like it or not we must all pay tax. But if we expect services and payments to be made to the less well off we must accept hardship.
Deputy Desmond's amendment is only a paper exercise. It is a matter of opposing for the sake of being anti-budget or anti-Finance Bill. The difference of £400 concerned would have been more than eaten up had the proposals of the Coaltion budget in January been implemented namely, the imposition of VAT on clothing and footwear. Deputies Bruton and Desmond have not said where the money would come from to implement this amendment. They know that it just cannot be done except by increasing the budget deficit. If Deputies Bruton and Desmond want to see the budget deficit increased why do they not get up and say so publicly rather than talking in different ways at different times about the budget deficit? They are here asking for the budget deficit to be increased by between £4 million and £6.5 million. I ask Deputy Bruton to tell the Minister for Finance where that saving can be made.
I would like to refer to something the Minister for Finance said in his last contribution in relation to the £45 million relief to the higher grade of PRSI people. I thank the Minister for his clarification, but I wish to restate that his very clarification is my objection. I object to the method by which it was done. That is, he explained that he made the move, then he set up a review body to look into the expenditure saving and after that he would see what taxation needs to be implemented. The very objection I have is that these measures should have been taken before this move was made.
The review board was set up. It only reported to us on 31 May so we are still examining it.
Who set up the review body?
The Coalition set up the one on staff.
We have not been informed of the findings of this review. My contention is that we as Members of this House should be informed of the findings of these review bodies so that we can see the justification for a move like this removal of the £45 million. That is the practice that I have an objection to and that should not be continuing.
It is becoming quite evident that there are some delaying tactics on the part of the Government in relation to this amendment. They seem somewhat hesitant to allow a vote on it.
On a point of order, are Deputies on this side of the House not entitled to get up and make any comment they wish?
There seems to be some delaying tactics. The support that Fine Gael have given to Labour is soundly based on the provisions of the Coalition budget of 27 January last with particular reference to the proposal for a family income supplement which would have been available to those families with incomes of £4,000 or less. It was proposed to pay these families £4 a week by way of family supplement, and where the income was extremely low that direct family supplement would have increased to £500 per annum. The present Government did not implement that proposal. Indeed it is a serious weakness in their budget that they have ignored the least well off in our community. It is for that very valid reason that we can support the Labour Party amendment.
We spent the £4 million in another way.
I am addressing myself to the problems of the least well off in our community. I have no hesitation in saying that they deserve our support, and that is the reason we are supporting the Labour Party amendment. We are also anxious to get rid of this Government and their Taoiseach, who is eminently unsuitable to lead a Government of this country and should be removed from office at the earliest possible opportunity. We are using this vote to show our lack of confidence in the Taoiseach and the Government, and will take it that if when the vote is taken there is a defeat the Taoiseach will have the integrity to resign and to take it as a vote of no confidence in him. The last budget proposed by the Coalition Government was a socially progressive one which took special account of the less well off in our community, particularly by increasing social welfare benefits by 25 per cent and by substantially increasing children's allowances from £6 per month to £11.25 per child for the first five children and £17.50 for each child thereafter. That was a socially conscious and socially progressive Government. Fine Gael have a proud record in defending the less well off in the community.
(Interruptions.)
I appreciate the interest of Deputy Murphy. I am sure if he continues in his vocal support of the Government he might possibly get a State car.
I do not think that is likely.
(Interruptions.)
I am very interested in the way the debate has gone so far. I never heard such hypocrisy from Fine Gael in all my life. They talk about looking after the less well off and the underprivileged. This is the reality of what they were going to do. They were going to withdraw food subsidies amounting to £47 million, and the Labour Deputies in the Government said "Yes, Dr. FitzGerald, we are with you all the way". That is lovely stuff. More was to follow. VAT of £58 million was to be imposed on footwear and clothing. Then before the election they did a backtrack or what the political correspondents call a U-turn. Then they said if the children were under ten years of age they were all right and men and women would be going around to see birth certificates. I cannot understand that hypocrisy. Looking across at the wealthy people on the opposite bench — and more luck to them — I realise they would not understand this problem.
Progress reported; Committee to sit again.