asked the Minister for Finance if the Government's tax projections for 1986 are in line with those indicated in the budget; and the proportion of GNP represented by total taxes this year.
Ceisteanna — Questions. Oral Answers. - Tax Projections.
30.
Tax receipts so far this year give no reason to indicate that the budget estimate for tax revenue will not, in broad terms, be achieved. On this basis, and using the latest estimate for GNP, total taxes are likely to be of the order of 35.7 per cent of GNP this year.
Total taxation this year will be of the order of £6 billion, whereas it was £4 billion when this Government came to office. Will the Minister not acknowledge that such an increase in total taxation in that time is an indictment of the Government's failure to meet their own stated targets of reducing the overall level of taxation? In view of the fact that that represents something of the order of £6,000 on average per worker — the figure was less than £3,000 per worker before they came to office — will he not acknowledge the Government have failed totally to meet their stated commitments of reducing or controlling the level of taxation?
There is a substantial inflation element built into the figures quoted by the Deputy. Obviously, £6 billion now is worth much less than the same amount was worth five years ago because of inflation. Using such figures is not particularly helpful. It is more helpful to look at the reality of the situation, rather than seeking to make a political point. For instance, he should consider taxation as a percentage of GNP. In the national plan. Building On Reality, the Government said their aim would be over the three-year period to keep taxation as a percentage of GNP unchanged, that is at 36.5 per cent of GNP. If anything, during that period I expect that taxation as a percentage of GNP will be lower than that figure. Certainly it will not exceed the planned target.
The Minister may wish to ignore the figures regarding total taxation which has increased by 66 per cent to £6 billion. Will he not acknowledge that an increase in terms of proportion of GNP from 33.5 per cent in 1982 to over 36 per cent of GNP is a move in the wrong direction and at a rate that will ensure that the economy will not be able to cope with the level of taxation? Is it not time that the Government corrected the growth in taxation which has been a feature of their period in office?
I agree our tax burden is far too high. We are collecting too much tax from the people under all headings. However, to reduce it requires reductions in expenditure. Obviously, we cannot borrow any more. That would be highly imprudent of us; and I think Deputy O'Kennedy is one in his party who has urged us not to borrow more, if I understand him correctly. The only way to reduce taxation below what I agree is an unacceptably high level is by reductions in expenditure. Over the past three years the Government have been reducing their expenditure in many areas and, for example, they have been particularly successful in reducing the number employed in the public service which was increasing at a rapid rate when we came to office. Now that number is being reduced. Similarly under other headings of expenditure we have succeeded in making significant reductions in public expenditure.
The Minister is not dealing with my question which referred to the proportion of GNP represented by total taxes this year.
I have to tell the Deputy there is no short cut to low tax rates. That can only be done by taking the necessary difficult decisions to reduce expenditure. All of the shades of Opposition on that side of the House must realise there is no short cut——
This is Question Time. We cannot have speeches now.
There is no short cut to low taxation. It can only be achieved by taking difficult decisions.
I do not think we should get into an argument about economic policy in general. There has been a very considerable growth in total taxation under this Government, either in gross terms or as a percentage of GNP. For instance, there has been an increase in income tax from less than £1.5 billion to something of the order of £2.5 billion. Will the Minister not accept the Government are failing utterly to control and regulate the growth of taxation? Irrespective of what he says about the control of public expenditure, we have a huge and continuing growth in taxation. The figures demonstrate that point.
I did not wish to interrupt the Deputy. Really, I should rule that out of order on the ground that it is argumentative. A question like that will be met by a certain kind of answer.
It is plain silly.
The Deputy's question was full of argument.
The Deputy has not a clue what he would do. He is taking one item, taxations, and ignoring what causes it, namely, expenditure. That might lead to applause for the Deputy in certain assemblies other than this House, but that kind of oratory about reducing taxation without being prepared to take the necessary decisions to reduce expenditure or to give the slighest idea of the decisions that would be taken does not convince anyone who thinks seriously about the matter.
I am calling Question No. 31.