If I were a speculator, landlord, millionaire stud farm owner, multi-millionaire tax exile or a wealthy backer of the Fianna Fáil Party who regularly appeared in the Fianna Fáil tent at the Galway Races, I would congratulate the Minister for Finance on this Finance Bill as a job well done in protecting the interest of my class. However, representing as I do working people and working class communities, there is nothing here for us to celebrate.
The Minister for Finance regards each budget and each Finance Bill he presents as a monument to himself and his right wing ideology. The Finance Bill 2003 is no exception. In implementing the provisions outlined in the budget last December, the Minister is continuing the policy of the Fianna Fáil and Progressive Democrat Coalition. This is a general policy that calculatedly causes wealth to be transformed to the capitalist class in our society, from waged and salaried workers to the owners of capital, land and property. The Minister for Finance will protest and in his speech he referred to the reductions in PAYE taxes that he has effected in recent years from the penal levels of the past. However the reductions in income taxation are absolutely useless to workers if the money accruing as a result is immediately soaked up by other demands or other agencies. For hundreds of thousands of Irish workers this is exactly what has happened in the economy under the stewardship of the Government for the past six years.
Let us consider young workers in particular. While their PAYE tax was reduced somewhat, Fianna Fáil and the Progressive Democrats did absolutely nothing effective while the price of a home – a fundamental need for people – doubled and trebled in many cases. For the half million families and individuals who had to buy a home in that time, concessions on income tax went straight to the housing building speculator, the banks and the building societies. It was enough of a scandal when penal taxation was levied on the ordinary PAYE worker while the multi-millionaires escaped – which was the regime of the past – and those taxes went to the State to finance the services of the State and of course an enormous amount went to enrich the international and domestic bankers. However, that the tax concessions go straight to enrich the land speculators, building contractors and developers – the friends and backers of the Government – is an absolute outrage.
Perhaps there would be some small consolation for those purchasing a home. At least some day they will have ownership of the home albeit having paid the banks and building societies two or three times the cost of the house in interest. However, there is a substantial and increasing sector of workers who now depend on landlords in the private rented sector. Every penny they gained in tax concessions from the Government went into the maw of the landlord class. Low paid workers may not be able to afford to purchase a home even with the shared ownership schemes and the affordable housing programmes. Tens of thousands of low paid workers, many of them civil servants and other categories are affected in this way. The Government is utterly oblivious to the struggle of such workers to survive.
We know the Minister for Finance lives in a very plush mansion in County Kildare. The journalist, Frank Connolly, exposed another string of mansions owned by the wealthy backers of Fianna Fáil in last weekend's edition of Ireland on Sunday. Workers in Dublin pay €600 per month for a bedsit that is not much bigger than a dog box. That is at the lower end of the costs. A one bedroom flat begins at around €900 per month and, for a three bedroom house in working class communities, €1,500 per month is a common price. It is therefore obscene to hear the Minister for Finance boast today about the fact that he has reduced the tax burden somewhat on workers in receipt of the minimum wage. It is incredible that workers facing the type of costs of accommodation alone – let alone all the other price rises and demands – should be subject to taxation at all. Workers on the minimum wage of €254 per week could pay €150 in accommodation alone.
When I spoke in the budget debate, I pointed out how this transfer of wealth was systematic, continuous and was also Government policy under the misnamed partnership deals. I gave the figures showing how between 1987 and 2001, the share of national production going to working people in salaries and wages reduced significantly as a percentage, while interest, profits and dividends rose dramatically. In other words, this Government and previous Governments presided over a systematic transfer of national wealth from working people to the privileged minority, the capitalist and landlord classes.
The Socialist Party has always understood that this is the nature of capitalism, the system under which we live. I was gratified to see an article by Mr. David McWilliams in the most recent edition of The Sunday Business Post, for which he writes a column. He also presents “Agenda” on TV3 and the “Morning Show” on NewsTalk 106. Mr. McWilliams is neither a revolutionary nor a socialist, but he can be perceptive in analysing economic trends. I will cite the conclusions he has drawn:
We have seen an unprecedented transfer of wealth, unparalleled in peacetime. The property boom has resulted in the transfer of billions of euro from workers to landlords.
Historically, it would take a war and the consequent forced expropriation of assets to result in such a transparent and blatant movement of wealth from the majority to the minority. Yet this is precisely what we have seen in Ireland..
All discussions on the economy, pay, income, immigration, tax and so on should be seen in light of the land-inspired transfer of wealth. The property boom has acted like an extraordinarily regressive tax, imposed on the working population of Ireland by the state to the benefit of a small, powerful class of landlords.. [I would add house builders and speculators]
I am not contending that this was absolutely intentional or pre-planned, but that is the outcome. Rising land prices have indebted the productive sector of the society and enriched a modern class of unproductive drones who live off exorbitant rent.
The Minister for Finance and undoubtedly the Government spokespersons who wait in line to speak on the Bill will be silent on these issues if possible. This is the reality for working people in Ireland today.
The tax concessions of recent years must be set against not only the surge in accommodation prices, but also the whole range of increases in charges for various services for ordinary people, including RTE, VAT, ESB and excise on those unfortunately addicted to nicotine. The bin tax, also called household refuse charges, is rapidly becoming a parallel tier of local taxation. It costs €350 to €400 a year and Sligo Corporation could charge €520 for it this year. The Minister for Finance also wants the return of water tax and a local income tax has been mooted. It is clear the Government is in the process of setting up a parallel tier of taxation levied locally so that Ministers for Finance can preen themselves on budget day, pretending to be doing the devil and all for the PAYE worker while, at the same time, imposing the dirty work of raising money locally for crucial services on local authorities and other local agencies.
At the same time, we have had massive tax concessions for big business. It is incredible that the effect of reductions in corporation tax and employers' PRSI in the last two budgets alone will, according to the figures we were given, return just under €1 billion this year to the corporate sector. This comes at a time when it has never been more profitable. The current Finance Bill continues this approach and is full of provisions to suit various wealthy interests.
Section 23 provides for the reduction of the annual rate of write-off for capital expenditure incurred on hotel buildings. Originally the Minister planned to introduce this measure immediately. Now, however, he has introduced transitional arrangements which provide that these changes will not apply to such capital expenditure incurred by 31 December 2004 if a full and valid planning application is received by the planning authority by the end of May. Which special interests, developers and Fianna Fáil Party supporters approached the Minister and asked for a further six months to allow them to get planning permission for projects they had in the pipeline and thus avail of the tax break? The Minister, of course, obliged. Who approached him and who is being facilitated by this measure? It contrasts with the approach taken to first-time house buyers who watched as the grant they desperately needed was scrapped and the pleading of the majority in society to change the provision was not entertained.
The Minister continues to favour the super wealthy in our society. The stallions continue to sleep peacefully in Kildare by night as they need not worry that their owners will tear their hair out over large tax bills and rock stars in their mansions do not have to worry about making tax returns.
Acht náireach eile déanta ag an Aire Airgeadais leis an mBille seo. Lucht an rachmais, lucht mór tógála agus lucht mór spéacláireachta a bhainfidh buntáiste as an mBille a chuireann ina chroí an cháináisnéis a thug an tAire isteach mí Nollag seo caite. Leanann an Bille le polasaí an Rialtais le cúig bhlian go leith anuas saibhreas na tíre a dhíriú i dtreo an mhionlaigh is saibhre, i dtreo na gcomhlachtaí is láidre agus lucht oibre atá thíos leis. Tá malairt polaitíochta agus eacnamaíochta ag teastáil uainn sa tír seo. The quicker we get a political and economic alternative to this right-wing Government, the better for working people.