Finance Bill 2014: Second Stage (Resumed)

Question again proposed: "That the Bill be now read a Second Time."

It has been a very interesting three weeks since the Minister introduced his latest budget. Like the previous one, as I said on previous occasions, it is unfair and contains harsh cuts. However, what has since been in the minds of the people, as we saw clearly and as was evident last Saturday, and what the budget cannot be divorced from is the issue of water charges. While the Government claims that water charges are not part of budget 2015, the reality for families is that they are very much part of it and this is a further austerity measure coming down the road.

The Minister has tried to provide sweeteners for the public who are simply saying enough is enough, that they will not pay his charges and that they want them scrapped. He has suggested tax credits will be available for those who have tax liabilities and those who do not. On budget day he announced measures which he said would allow for a maximum tax credit of €100 to be received by those with a tax liability. However, it is bizarre, given the number of officials involved, Cabinet meetings, sub-committee meetings and Economic Management Council meetings and the fact that Irish Water and water charges has been the burning issue in the State for many months that he left out tens of thousands of families from the scheme. Three weeks have since passed and we still do not have clarity on his tax credit proposal. It does not appear in the Finance Bill and he has not indicated, unless I missed it in his Second Stage speech, that it will be brought forward by way of an amendment on Committee Stage. This reduces and curtails debate. We had a discussion earlier about the fact that as a result of Members not turning up on time this morning the amount of time we had available at Question Time to hold the Government to account was restricted. Similarly, by the Minister and the Government not getting their act together in bringing forward the amendment on tax credits to off-set water charges we are allowed less time for scrutiny. We will not be able to deal with the issue at the finance committee and will not have sight of the Government's proposal before we have to propose Committee Stage amendments. This is simply not the way to do politics. I ask the Minister to confirm whether he has sought the approval of the Attorney General or the Cabinet for a proposal of this nature.

It is very clear that the Government is scrambling frantically to try to appease a certain group of individuals. I tell the Minister clearly that it is not going to work. I believe he is around here long enough to know members of the public have had enough. They are not going to buy into tax credits for water charges that they simply do not want. They are not going to buy into sweeteners from the Minister for Social Protection to off-set the charges. They are not going to buy into an extension of fixed rate charges. I was proud to be standing with people in Donegal at one of the biggest rallies held. There were 10,000 people in the market square in Donegal, while another 1,000 turned out in Lifford, as well as about 4,000 in Ballyshannon, and none of them had a placard demanding tax credits or flat rate charges or clarity. What they did demand was that the water charges be scrapped. Unless it listens to this demand, the Government will go down with the charges.

The Minister knows that over 200,000 took to the streets last weekend. He bravely says this was the last sting of a dying wasp, or words to that effect - as the people will have their day, let them go out and it will all fizzle away - but I am telling him that they are determined. They are determined to travel in numbers to the capital city on 10 December to show him that they are not giving up the fight. Despite all of the pressures on them in travelling long distances, they will be here and we will be with them. I hope they will prove the Minister wrong and that he will show a little more humility in understanding where they are at, that they are simply at the end of their tether, that they cannot take this additional austerity measure and that any repackaged water charge will simply not wash with them.

This week, at the presidential dinner, the Taoiseach said that without water charges, the tax rate at which some would have to pay would go up by 4%. We have had other Ministers say child benefit would have to be reduced. This is scaremongering and a sign of desperation on the part of a desperate Government that is simply out of touch with the people. The comments of the Taoiseach confirm at least one thing, namely, that there are alternatives to water charges, if the Government wanted to pursue them. However, an increase of 4% in the marginal rate of tax is not one of them.

In a letter to a Fine Gael colleague of the Minister he said that if Irish Water was to be on the State's books, it would cost an extra €550 million in 2015, reducing to some €500 million in 2016. The demand is where the Minister would get the €550 million needed and how he would raise it while reaching the deficit target. The Minister knows well that the deficit target the Government intends to reach in 2015 is 2.7% and that the deficit to be reached under the rules is just below 3%. Therefore, he knows that we have headroom of about €570 million in order to be below the 3% figure. These facts are indisputable, although the Minister is shaking his head.

It is €550 million with the loss of the charge, giving a total of €850 million.

I will come to that figure. Let us be clear: it is indisputable that there is headroom of €570 million for us in order to be below the 3% deficit target. Therefore, if Irish Water were to be included in the State's books, that figure could be absorbed. As the Minister rightly said, there would then be the issue of the €300 million to be raised in domestic charges.

How would the Minister fund that? If it were to come out of additional spending, it would bring us over the deficit target. First of all, the €300 million is not €300 million, because if the Government scrapped water charges there would be no need for its tax relief off-setting water charges and no need for the household package to assist families who simply cannot pay, so the figure comes down to below €200 million in the first instance. If the Minister did not reduce income taxes from 41% to 40%, he could cope with today with no scaremongering about income tax going up by 4% and taking child benefit from vulnerable families and children. There would be none of that nonsense that this desperate Government is trying to peddle.

That is not the Minister's only option. He has other options for finding that €200 million within the scope of other budgetary proposals, and we have suggested a number of them to him. However, he has decided not to do this. SARP is an absolute tax benefit to a handful of individuals. Let us be clear about this. A total of 12 individuals benefited from the scheme in 2012, while 31 benefited in 2013. It is a handful of individuals who an earn an unlimited amount of money, and their income will be reduced by 30% for tax purposes, giving them not thousands but tens of thousands of euro in write-downs, because they come here and the Minister thinks they are special. He believes that this will cost another €1 million. There is no limit on the type of money that the Government can throw at this handful of individuals. A person can claim for their or their children's educational fees and their flights to and from their home countries. Since they were not happy with €500,000, if people earn €1 million in this State, they can have that figure less €75,000. They can have 30% of that taken away from the tax man when they are calculating their tax. It is an absolute disgrace. At the same time and in the same breath, the Government tells families who simply do not have any money left at the end of the week that they must tighten their belts and pay up for the sins of others in the past through water charges, the property tax, prescription charges and a range of other charges.

The Minister needs to stop the scaremongering on this and get down to fair ways of funding water services. There are other ways of doing it which should be examined in respect of keeping Irish Water off the national accounts. In respect of questions that we have put to the Minister - I have submitted another one and I hope the Minister and his officials will be transparent with the figures - I have looked at every single question that has been asked by every Deputy in this House about the cost of Irish Water, and it is clear as mud. This Government is unwilling to give clear figures in tabular form in respect of the costs associated with Irish Water, the sources of income, the sources of expenditure and the categorisation of that expenditure. I will try once more. I have submitted a parliamentary question and I hope the Minister will ensure that his Department officials and the Government provide that information in a fair and transparent way.

What is telling after three years of stagnation and recession is that when the Government found some leeway, its instinct was to cut income taxes - income taxes for the highest earners. Its instinct was not to scrap the tax on the family home or to restore the respite care grant or funding to the National Disability Authority. Its instinct was to give it in a way that exponentially favours those who earn more. That is clear from the figures that are there. People in this House who earn, at a minimum, over €80,000 - I am not including staff - will get multiples of what someone on the minimum wage earns in this tax relief. Ministers and the Taoiseach earn far more than elected Members. Perhaps people in this House are under pressure - perhaps they over-borrowed or stretched themselves too far - but we are not the most needy in society. The people who must go to the Society of St. Vincent de Paul to ask for food to put on their table, who struggle to put clothes on their kids when they return to school or who are worried about what will happen in the next six weeks as they start to prepare for Christmas are the people who should be getting the tax breaks in this budget. But no, the Government has decided to provide the most benefit for the wealthiest in society.

I welcome changes to USC levels and thresholds in the Finance Bill. Sinn Féin would have gone further and removed all those earning the minimum wage from the USC tax net, but I welcome the fact that this is the second time the Government has done this. We will continue to pursue this issue and hopefully, through our persistence, the Government will continue to take those earning below the minimum wage out of the USC tax net.

It is in its income tax policy that the views and priorities of Government are most visible. A progressive tax system is how a modern state redistributes wealth. The budget and this Bill do not redistribute. They make sure that less is transferred from those who have it to those who need more.

There are a number of measures in the Finance Bill that I welcome and will support. I want to recognise that there are some positive moves, such as the extension of the tax relief for farmers. However, the farming community has brought to my attention its belief that the definition of "active farmer" is inappropriate, and I hope the Government really listens to this. The arbitrary figure of 50% of farm working time does not represent the real world and will hit small farmers harder. I fully agree with the principle that we need to make sure this is targeted at active farmers and that active farmers are prioritised, but the definition needs to be amended if we are to do what it says and genuinely ensure that those who are farming are able to keep their heads above water. The application of this definition for capital acquisitions tax purposes will have a massive impact on farmers, particularly smaller farmers and those in areas with poor land. I come from west Donegal and those are the types of farmer who live there. If this Bill is not amended, many farmers with hopes of transferring their land to family members will have those hopes dashed. This is the last thing that rural communities need. In respect of such holdings, if a person can get a job off-farm, they will take it. It involves small holdings and farms and bad land. If they can get it, people work 20, 30 or possibly 40 hours per week. The definition in this Bill means that they would have to be working 40 hours on the farm as well to be able to avail of this, which is simply not acceptable, so I hope that the Government looks at this and at the definition of active farming. I understand what it is trying to do here, but I think it will have a consequence, hopefully unintended, of penalising small farmers on poor land in particular.

I welcome the move towards taking a more proactive approach to the domicile levy. In 2012, only six people paid this levy. It is an absolute disgrace. There is certainly a pattern under the Government of placing a higher priority on chasing lower entrants than on chasing higher earners who do not pay what is due. Look at the property tax. The Government allowed the Revenue Commissioners to chase people who had not paid. We hear from the Revenue Commissioners that they are pursuing through the courts 500 people who did not pay, could not pay or refused to pay the property tax. Years later, in the Finance Bill, we are now finally allowing the Revenue Commissioners to send a letter to people they think should be paying the domicile levy. Let us remember who is eligible for the domicile levy. It is people with worldwide incomes above €1 million who have properties in this State worth in excess of €5 million and who have paid less than €200,000 in income tax. The Revenue Commissioners believe that there are people are out there who are not paying it, but years later, a provision to allow the Revenue Commissioners to pursue them is finally included in the Finance Bill, with penalties ensuing. I suggest that we might need to look at the definitions as well. These definitions were raised in 2012, and perhaps we need to reduce the definitions to capture more individuals in respect of the domicile levy. Perhaps new figures exist from 2012, but they are the only figures that are on the record.

In respect of corporation tax, the Minister says that:

The problem with the so-called "double Irish" from Ireland's point of view is that it has that name. People think that something we do here gives rise to it. That is not the case. It arises from tax codes elsewhere and the way in which the USA regards certain arrangements. We do not operate any kind of tax haven. Our position is legitimate and the 12.5% rate is applied here.

I wonder whether he recognises his own words. I could quote other comments he made in response to my questions on this subject in which he clearly indicated that the Irish Government can do nothing to the tax code that would end the double Irish, yet fast forward to budget day when he stated:

The so-called “double Irish” is one of many such schemes. I am abolishing the ability of companies to use the “double Irish” by changing our residency rules to require all companies registered in Ireland to also be tax resident in Ireland.

Well, fair play to the Minister. Finally he has listened. I wrote the legislation for that reform two years ago. I raised the issue with the Minister and others in the Joint Committee on Finance, Public Expenditure and Reform, where I pointed out that we had to examine what was done in 1997 and apply it in the context of current tax residency rules. He told me it could not be done. He told this Dáil - it is a serious issue to mislead the Dáil - that nothing can be done in the Irish tax code that would end the double Irish. It is on the record. At my instigation, the aforementioned committee reviewed the issue of corporation tax. After all of its work, it still did not have a clue about the subject. Members thought the double Irish was something that could not be ended. That was because every time I raised this issue, people from the Minister's party, including in particular the Minister of State at the Department of the Taoiseach, Deputy Dara Murphy, heckled, sniped and accused me of being anti-jobs. I wonder if the Minister of State would accuse the Minister, Deputy Noonan, of the same practices now that he has given in and listened to sensible proposals by ending something that was causing immense reputational damage to this State.

The problem with the double Irish and what is proposed in this Finance Bill, however, is that the Minister has given a sweetener to the companies concerned. If they establish here after 1 January 2015, they will automatically be tax resident in this country, which means they had three months from budget day to establish their companies here. If we are to believe what we read in the newspapers, a flood of companies are being set up here to benefit from another provision in the Bill which gives companies incorporated here but not tax resident until 2020 to get their affairs in order. Five years from now, they will be made tax resident here. If the companies that are not currently established here get their act together before 1 January, they will be able to avail of the double Irish for a further five years. That is simply not good enough. At a minimum, he should ensure that the effective date of application for the measure is budget day. I do not think he will do that, however, because he has engaged with the industry and I am sure he has signalled to them that they should get their act in order.

This head in the sand approach has not done the State any good. Sinn Féin is clear in its support for the 12.5% corporation tax rate but we will not stand for genuine companies having to pay 12.5% while others are able to avail of tax avoidance schemes that reduce their liabilities to low single digits. This is being done with the support of the Government because it has not closed these loopholes. The Finance Bill proves for once and for all that the Government had the ability to stop this practice at any time in the last several years instead of blaming it on other tax jurisdictions. Of course, it is related to the way other tax jurisdictions interact with us but we could have made a move to stop it. I will not go into the Apple investigation but the Government should have taken it on head first instead of waiting for the European Commission to conduct its investigation. We should have pre-empted the Commission by starting our own investigation.

In regard to tax avoidance, the Bill contains an entire section which deals with people involved in deliberate tax avoidance schemes. Someone who is deliberately involved in a tax avoidance scheme will at present incur penalties and interest if the Revenue finds out. The aforementioned section tells these tax avoiders, who are breaking the law, that if they put their hands up they will not incur surcharges and their interest payments will be reduced by 20%. How dare the Minister introduce such a provision at the same time that he is telling people they have to pay up for charges they cannot afford? People who cannot afford to pay the household charge are being pursued by Revenue through the courts but the Minister is amending the law so that people who were deliberately involved in tax avoidance schemes of a huge magnitude will not be subject to surcharges or the full interest liability. That is an absolute disgrace. We should be increasing the penalties on people who are involved in deliberate tax avoidance of this magnitude. Revenue should be strengthened by an additional 100 staff, as Sinn Féin has proposed, to ensure those who are involved in such tax avoidance are pursued and that the penalties, interest and surcharges are applied. This is revealing of the Minister's attitude. I am aware that previous amnesties have brought money into the Exchequer but is this the time to give amnesties to tax avoiders? Should we not be sending a stronger message to the effect that they should pay tax or face additional surcharges?

The special assignee relief programme, SARP, again reveals the Minister's priorities. This scheme is an utter disgrace. When it was first announced, the Tánaiste and Minister for Social Protection stated that it would be linked to employment and that everyone who availed of it would have to prove that in the region of 20 jobs would be created. There is no such requirement anymore. Why does the Minister believe an income of €500,000 is not good enough? Are people who earn €1 million asking the Department of Finance to allow them to write off 30% of their entire incomes for tax purposes? Is he giving a listening ear to such individuals? Does he not get what 200,000 people were saying on Saturday? I realise his comments were very dismissive of them but does he simply not get it? Part of the problem is that the public is not aware of these measures. They are all contained in the Finance Bill but they were not announced on budget day and they will never make the media headlines.

I welcome the Minister's statement that office holders will no longer be able to write off their water charges and household charge liabilities against the dual abode allowance. Let us go further, however. Tell me -----

The Deputy should speak through the Chair.

Can the Minister tell me why is it fair that a Minister who stays in a hotel in Dublin to attend the Parliament can have the cost of the hotel written off for tax purposes - I have no problem with the cost of the hotel - and also write off the cost of maintaining a second residence in the hotel? Riddle me that. When I asked Revenue what it means to maintain a second residence in a hotel, the only definition it could provide pertained to laundry expenses. It is madness. The write-off is worth €2,500, which would launder a lot of Y-fronts, shirts and socks.

This provision simply should not exist in the tax code. The section dealing with the dual abode allowance was put there by the Fianna Fáil Party in government and it is time for the Minister to take it out. Ministers' expenses should be available on exactly the same basis as any other expenses and the details thereof should be published. Ministers should be able to recoup the cost where they are genuinely required to stay in Dublin or elsewhere as part of their duties. However, having laundry expenses deducted from their tax bill in a private way is not acceptable.

In the short time remaining to me, I will comment briefly on a number of issues. We must have an overhaul of the VAT system. I cannot understand why the provision of lessons in Irish dancing, set dancing and brush dancing, which are part of Irish culture, are VAT-liable, while ballet lessons are not liable. We must closely examine these areas. There has been a great deal of talk about the money that has been allocated for the centenary celebration of the Easter Rising, with a range of groups bringing forward proposals to commemorate the events of 1916. Those proposals should be VAT exempt.

The Minister provides in this Bill for the elimination of the windfall tax, whereas we called in our alternative budget for its reduction to 41%. The Minister is saying the normal rates will apply in terms of capital gains tax and so on. Our view is that the tax should be charged at 41% and, crucially, rezonings should apply for only two years. There are two reasons for this approach. First, it tells landowners to release their land now in order to deal with the housing crisis, particularly in the capital. Second, it is an anti-corruption measure. Members of the Minister's own party were deeply involved in rezoning land for corrupt purposes in the past. The windfall tax was a way of discouraging that by greatly reducing the benefit to landowners of the massive increase in the value of their land. The Minister seems to think that type of corruption is a thing of the past. I hope he is right, but I remain of the view that the windfall tax should go back to where it was or at least be retained at an appropriate level after the two-year period.

In regard to the Living City initiative, it seems the "living" part has been dropped, with the Minister indicating that it is now applicable to a single-storey house. That is the effect of the deletion of subsection (3); it is saying there is no longer a requirement to live in the premises and it simply can be an upfront commercial business. Before this, there was a requirement to live upstairs in the Georgian house. Now the Minister is saying it does not matter - even where it is a single-storey premises being refurbished, one can have expenditure up to €400,000 for an individual and €1.4 million for a company written off over a ten-year period. There is no longer any requirement in terms of residing in the property. People in my constituency would love that, including those living on islands which are being depopulated. It is deeply unfair and the amount of tax forgone is simply not acceptable. The purpose of the initiative was to get people back living in city centres. That there is no longer a requirement for those availing of this benefit to live on the commercial premises to which the benefit applies drives a horse and carriage through the provision. I urge the Minister to reconsider it.

Deputies Paul Murphy, Michael Fitzmaurice, Richard Boyd Barrett and Seamus Healy propose to share time. Is that agreed? Agreed.

The Finance Bill tells a tale of two different budgets. One of these budgets is for working class people, the most vulnerable and unemployed people. It is a budget which, in effect, ensures the continuance of austerity for them. The other budget is a recovery budget for the rich, high earners, developers and corporations. The weekend before the budget was announced, the headline on the front page of The Sunday Business Post referred to the end of austerity and gains for top earners, builders and farmers. The article was correct in so far as the budget did signal the end of austerity for those groups as well as for private landlords. However, alongside this recovery for the 1%, the budget continues the logic of austerity for the 99%.

This continuation of austerity for ordinary people is clear in the cut of €179 million in the budget of the Department of Social Protection, which is the largest cut for any Department in this budget. We have a continuation of the incredibly cruel cut of 20% in the respite care grant, which has had a huge impact on people with disabilities and their families. Many of them depended on this money to pay bills and to cover the extra costs of having a disability. Even at this late stage, I urge the Minister to reverse that cut at a time when recovery has supposedly arrived.

Under this budget, an unemployed single person will benefit by 90 cent per week. A single person earning €75,000 per year will benefit by €14.30 per week. For those on low incomes, the scraps given in this budget will be more than wiped out by the water charges. The latter are central to the continuation of this austerity agenda but the reality is that people simply cannot afford to pay them. The water charges may start at the €200 the Minister for Social Protection, Deputy Joan Burton, promised yesterday, but will quickly rise once the caps are lifted. The propaganda by the Government on water charges has undergone a significant shift. Originally it was all about conservation and asking everybody to pay their way to facilitate the investment in infrastructure that is needed. Now the Government is arguing that this was all a trick on the European Commission and troika, a way of fiddling the numbers that would cost us very little and save us money in the long run. That is the latest propaganda from the Government.

The reality is that whether the money is off balance sheet or on balance sheet, it is money that has to be found and the question remains as to how it will be raised. There is a great deal of talk about the fact that taking it off balance sheet will meet the market conditions test. However, a requirement of the market conditions test is that the seller acts to maximise its profit. The Government accuses us of scaremongering about privatisation and rising costs. However, the Government's argument for water charges is built on the foundation of a test that says the seller must act to maximise its profit. Irish Water will have to negotiate with the Commission for Energy Regulation to eliminate the allowances. It will have to make the argument that the price, which is already double what corporations pay, should go up over time. That commodification of the water supply points ultimately to privatisation.

Looking at the other side of the budget, the benefit for high earners on €70,000 or more will be four times that of the gain for those on minimum wage. The budget includes a specific measure, the elimination of the cap on the special assignee relief programme, SARP, which is targeted at a very particular class of people, namely, CEOs and similar earning more than €500,000. It is incredible that the Government would take time to allocate a special tax relief for those earning €500,000 or more. This is a developers' budget. The elimination of the windfall tax, in particular, is simply incredible. The Government has dressed it up as somehow being intended to ensure more homes are built. It will not lead to any more homes being built, but it will give more profits to developers. There is a deficient level of house building not because of the existence of this tax but because of the absence of investment by the State in this area. Such investment is at an all-time low. We are going back to allowing these people to speculate on land and make huge profits while ordinary people who are simply looking for somewhere to live pay the price.

This is also a budget for private landlords, who benefit from the extension of the home renovation incentive to rental properties. It seems the explosion in rental costs being paid by ordinary people has not been sufficient to enable landlords to shell out for some new furniture. We must incentivise them with a tax break. In his Budget Statement the Minister expressed his expectation that these tax savings would be reflected in rent levels. That is a joke. If the Minister lived in the real world and interacted with landlords, he would know they will take whatever they can and raise rents as high as they possibly can.

We have a corporations’ budget, with an extra €95 million in corporate tax breaks, before we even deal with the patent box tax subsidy. Earlier in a reply to Deputy Richard Boyd Barrett on the corporation tax regime, the Minister for Finance stated the Government played fair but played to win. This encapsulates in an honest way the tax competition strategy of this and former Governments. This is a notion that countries around the world are all engaged in a race to the bottom to provide the best environment for corporations through the lowest corporation tax rates and the most flexible and exploited labour markets, with the lowest wage rates. That is the game in which the Minister and the Government is involved. It is one, however, in which there is only one winner, namely, corporations.

In the OECD, Organisation for Economic Co-operation and Development, the average corporation tax rate in 1981 was 49.1%. In 2012 it was 32.4%. Has investment gone up in that time? No, it has actually declined. Have growth rates for GDP, gross domestic product, gone up? No, they have declined, too. It is the same in Ireland. For years we have been incentivising corporations to invest here through the introduction of the 12.5% corporation tax rate and the double Irish rule. The result, however, has been a collapse in private sector investment since 2007. The winners are the corporations which have managed massive tax avoidance schemes on a global scale. The patent box will just allow them to continue to do so after 2020.

Several weeks ago I spoke about the Budget Statement. In the past 24 hours problems with the Finance Bill for the farming community have been brought to my attention. The mothers and fathers of many young people in the farming community want them to take over the land, continue the tradition of farming and carry the baton to drive the agriculture industry forward as set down in Food Harvest 2020. Unfortunately, the Bill’s provisions on capital gains tax tell young people to get a ticket and get out of the country. The Bill states an active farmer must prove he or she spends not less than 50% of his or her working time farming, which is unrealistic. As Deputy Pearse Doherty said, from County Donegal to County Kerry, through the midlands, the income of a small holder farmer with ten to 20 cattle to sell every year will be between €10,000 and €15,000. If that farmer does not work 40 hours elsewhere, he or she could be in severe difficulty and have no future in making a sustainable living on the farm. When I was a young lad starting off in farming, I had to work off-farm. Every pound I earned I put back into the land. Many Deputies will know from visiting Roscommon-South Leitrim during the recent by-election that it is difficult farming land. All over the west, making land productive in wet conditions is a major problem. Up to 30% of farmers, be they large or small holders, are working to have an off-farm income because they cannot make a sustainable living on the land. Between 45% and 50% of suckler cow farmers have to have an alternative way to make a living to rear their families and send them to school. This issue must be addressed on Committee Stage. If it is not, many young farmers will not be able to afford to take over the family farm.

The Bill proposes to ring-fence stamp duty consanguinity relief to lifetime farm transfers between family members where the transferor is aged 65 years or under, but there is a problem coming down the track. What does the farmer who reaches 65 years old do for the year? What happens to those aged 66 or 67 years? We need to address this problem, too.

Every day in the Chamber, when one looks up to the Visitors Gallery, one always sees young children, the future of the country. Sadly, the education budget has been cut, with the removal of the minor works grant which helped to maintain the life and soul of rural schools. Each year, as the Minister is aware, the only moneys available to schools for essential repairs between September and the end of January were through this grant. I note that the Minister for Finance is a man of optimism, speaking about an economic growth rate of 4% and better. While it is great to have turned corners, the future of the country lies with our children in primary schools. If we take the minor works grant away, they will not be able to have an 11 a.m. or a 12.30 p.m. break because schools will have to close. Two days ago I had a parent on to me to explain that the boiler in their child’s school was ready to blow up and, unfortunately, that the school had no money to repair it. Parents fundraise day in, day out. Will the Department of Education and Skills, as well as the Minister for Finance, address this matter as soon as possible?

We all know that for the elderly, the very people who brought the country from A to B during the years, there is chaos in the fair deal scheme. We can go on talking about budgets, but in the end we need to examine the economics. It costs between €3,000 and €4,000 a week to keep an elderly person in a hospital bed, or between €800 and €900 a week in a nursing home, before they are let out under the fair deal system. It would make more economic sense to allow them to be cared for in their own homes, which would allow families to have their loved ones closer to them.

Will the Minister examine amendments to the Finance Bill to address these issues, particularly the farming issues which are causing much distress around the country?

Last week, before the protests that took place at the weekend, the Minister for Finance was reported as suggesting they would be the last rally of the anti-water charges movement. He could not have been more wrong. The Irish revolution for the 21st century has begun. The people, as they rise up off their knees against six years of cruel injustice and unfairness, will not be lying down again any time soon. Unless the Government genuinely listens and scraps these hated water charges and undoes some of the cruel injustices perpetrated against Irish citizens in the past six years, it will fall. Unless it genuinely listens to the voices of the people who have risen up, this will be the rock on which it will perish.

The message could not be clearer. The people do not want tinkering, statistics or mud to be thrown in their eyes about economic growth and the success of the Government. They want these hated water charges to be scrapped, with the undoing of some of the other injustices perpetrated against them such as the home tax and the cruel burden of the universal social charge, as well as some of the absolute vicious cuts directed against some of the poorest people. That was the message on Saturday and it was unmistakable for those of us on the streets involved in organising the protests. I spoke at dozens of meetings in the run-up to and the mobilisation of the protests at the weekend. The anger, outrage and determination of the people involved were absolutely unmistakable.

People have had enough, yet the Minister stills tries to throw mud in their eyes about the so-called progressivity of his budget. How can he stand over a situation where somebody on €17,000 - a miserable, poverty wage - gets €173 back in this budget, which will be more than wiped out by the water charges, but somebody on €120,000 gets €687 back? How can the Minister justify that for people who cannot pay their bills and are on their knees? They are being made homeless because they cannot pay the rent or feed their children.

I have pointed out to the Minister that we are at the bottom of the OECD league table for child poverty. It is extraordinary and it is not just to do with the recession or the adjustment. Even in the teeth of the recession, other OECD countries have seen an improvement in child poverty. Notwithstanding all the economic difficulties, their governments said: "We're not going to let children fall into poverty. It's just not acceptable. It's not fair." Child poverty gets worse in Ireland, however, because this Government does not care, is not listening or does not know. I do not understand what it is, but that is a fact. They have left children to suffer the consequences of an economic crash in their priorities for dealing with it.

There are alternatives. The Minister always says that we do not put forward alternatives, although we do so again and again. In our alternative budget, for example, we proposed that if one increased tax on people earning in excess of €100,000 and created new tax bands for those on very high earnings, i.e. over €140,000, over €180,000 and over €250,000, a few extra percentage points would raise €922 million, according to the Department of Finance. That figure was contained in a parliamentary reply from the Minister's Department. That sum would allow him to do away with the USC for everybody under the average industrial wage and slash it for people earning between €30,000 and €60,000. It would genuinely shift the tax burden onto those who can afford it, rather than continuing to cripple those who simply cannot pay any more.

The Minister resists with incredible determination the tiniest extra tax imposition on the financial services sector. A financial transaction tax would impose 0.1% on the several trillion euro in financial trading that goes on in the IFSC. According to the EU Commission it would raise €500 million a year, more than the Minister hopes to raise from struggling low and middle-income families. Which is fairer - levying 0.1% on financial speculators who would not even feel it, or battering low and middle income families who cannot even pay their bills with hundreds of extra euro that they simply cannot afford? How can the Minister say the latter is fair? It is obviously unfair. The financial speculators who caused the crisis would not even feel 0.1%, but other people will be driven further into poverty. More children will be driven into poverty and more people will lose their homes because they cannot afford to pay their rent. How can the Minister say that he cannot do anything about that?

We have also made proposals concerning corporation tax. Figures from the Revenue Commissioners show that before deductions and charges, the corporate sector made €61.5 billion in profits but it only pays €4.17 billion in tax. That is an effective rate of 6.5%. If the Minister put that up to 12.5%, which is the nominal rate, as a minimal effective rate he would raise €4 billion. Would that not go a long way to fixing the water infrastructure that the Minister cares so much about?

Why cannot some of NAMA's €4 billion in cash reserves go into water infrastructure? Some of it could also go into building housing for the homeless and the 90,000 people on the housing waiting list. Why can the Minister not do those things? It is because the Government repeatedly defends, with incredible tenacity, the wealth of the richest people in the country and the enormous profits of corporations. It unloads the cost of an economic crisis again and again on the backs of the poor, struggling, working people of this country who simply cannot take any more. If the Minister wants to avoid the revolution, he should listen.

This Finance Bill, the budget and general Government policy is based on spin, hype and, indeed, the Government's lie that this country is broke.

The Deputy cannot use that word. Please withdraw it now.

If the Government does not like that word, let us call it something else.

It is not allowed under standing orders.

Use the French word mensonge.

It is completely untrue that this country is broke.

I take it that the Deputy is withdrawing that.

The policies that follow from that and which are being implemented by this Government mean continued austerity for ordinary people. They mean continued austerity for low and middle-income families whom this Government are forcing to pay for a recession that they had no hand, act nor part in creating. The water charge is one of those austerity taxes, but ordinary people are now saying that they have had enough. It is the straw that breaks the camel's back.

The policies in the budget and in the Finance Bill ensure that the gap between rich and poor has increased. The policies mean that the super-rich get off scot free and will not even be asked to pay their fair share of taxation. In recent days, the Minister's press officer boasted in the newspapers that anyone earning over €100,000 a year will get €747 from this budget. That is nearly €15 per week, while the lowest earners get 90 cent per week. Low and middle-income families will face more austerity, while the very wealthy get support and are not asked to pay for anything.

We have high unemployment levels while there are over 100,000 on the housing waiting lists and there is a huge mortgage crisis. Irish children have fallen further and faster into poverty than in any other OECD country. It is shameful that 28.6% of Irish children currently live in poverty.

We also have high emigration, including 84,000 graduates who have left this country in recent years. They are now contributing to economies in Canada, Australia and elsewhere. Ordinary people know that our health and education services have been devastated.

This country is not broke, however. All objective, independent analysis agrees that this is a very wealthy country indeed. Of course, the wealth is skewed in favour of wealthy people to such an extent that the poorest 10% pay more as a percentage of their income in tax than the wealthiest 10%. That is another absolutely shameful situation.

About 12 months ago in this Chamber, the former Minister of State, Deputy Joe Costello, told us that this was the eighth richest country in the world. That fact has been supported by objective analysis. We know, for instance, that the gross domestic product here per head of population is greater than in Germany, France or the United Kingdom.

That finding has been supported by Germany's Bertelsmann Foundation in recent times. The German study shows that, despite being one of the richest countries in the EU, Ireland's rating for distribution of wealth is 18th, in the bottom third of the 28 EU countries, along with Greece, Bulgaria, Romania and Latvia. As a result of the study, the foundation also cited Ireland as an example of how high GDP per capita did not translate automatically into social justice for the population. Ireland has a GDP around as high as Sweden's, but ranks considerably below average when it comes to social justice and is one of the biggest losers in country comparisons. This country is very wealthy, but the wealth is in the hands of a very small percentage of the population that is not being asked to pay its fair share. Less than 12 months ago, the Minister for Finance told me that the top 10,000 income earners in the country earn €595,000 each per year. From the rich list published in the Sunday Independent by Nick Webb, we know the 300 wealthiest people in the country have increased their assets and income from €50 billion in 2010 to €62 billion, an increase of €12 billion. We know the financial assets of the wealthy are now at the level of the Celtic tiger era, at €324 billion.

It is time the Government made very wealthy people pay their fair share. I am talking about seriously wealthy people, not the ordinary individual with a redundancy payment or a retirement lump sum or who bought a house for retirement. I am talking about people with huge amounts of money, hundreds of millions or billions of euro each. They are not even asked to pay a wealth tax, which is one of the things the Government should do. It should introduce a wealth tax for very wealthy people, but I can see the Minister throwing his hands up in the air, as do the media and the establishment when people suggest it. We should remember there are six countries in the EU with a wealth tax. A wealth tax was introduced in this country by a former colleague of the Minister, Richie Ryan, but it was abolished by Fianna Fáil to suit its backers. A wealth tax is essential. Even a very small wealth tax would provide significant income, billions of euro, to address the issues of water, health and education services.

Every week, approximately 1.5 million people receive social welfare payments. When we take into account qualifying adults and children, this adds up to almost 2.3 million people in the country who receive a benefit, including child benefit, which is paid to 610,000 families in respect of 1.2 million children per month. Assistance with key household bills is given to almost 410,000 households and pensions are paid to 560,000 people. Working-age income support is paid to 480,000 people, and income support for carers and people with an illness or disability is provided to 300,000 people. The idea that everyone is being left high and dry by the Government is rubbish. Half the population receives some form of social welfare support every month.

I listened to some of the comments made about this Bill, and it seems the average nurse or teacher is the enemy of some Opposition Members, based on their salaries. The Opposition resents the fact that these people are getting taxes back in the budget. When we were discussing the budget last year, there was an expectation that this year we would take more out of the economy. In fact, we are putting it back. Not for a minute do I think the average nurse or teacher or a person earning the average industrial wage is overpaid.

That is not what we are talking about.

Deputy Boyd Barrett should listen to his own commentary.

Can Deputy Twomey show me a nurse earning more than €100,000?

Two people earning a salary of €50,000.

I am sorry if Deputies do not like the sound of what I am saying, but I listened to the rubbish they spoke without interrupting them. Even if they feel my contribution is the same, the least they can do is give me the courtesy of actually listening.

The IDA supports companies that directly employ 166,000 people, and the same companies spend €7.8 billion annually on payroll and a further €12.5 billion on materials and services produced in Ireland. It seems the Members opposite want to get rid of that as well, because they have something against foreign direct investment. Do the Deputies opposite want to put another 166,000 people on the dole and get rid of the €7.8 billion payroll and the €12.5 billion that such companies invest in the country? Companies supported by Enterprise Ireland, which are mainly Irish indigenous companies, employ 175,000 people and spend €6 billion on payroll and €13.5 billion in the economy. These are significant figures and should not be thrown around or played with in the way some Members talk about policy. The Minister for Finance once commented that people in this House use kindergarten economics, but some of what the Members opposite talk about goes beyond kindergarten economics.

One of the best things the Government has done concerns unemployment. Unemployment is dropping because there has been a sector-by-sector approach to getting people back working. It is not just the Minister for Finance but all Cabinet Ministers working with him. We have made changes in agriculture and drilled into sectors. Changes made to the 9% VAT rate for the tourism sector had a dramatic effect, as acknowledged by everyone. It is a textbook example of how the Government can change something in one sector of the economy in a dramatic way. By the end of 2016, 2 million people will be working in the country. That would be impressive. The outcome of joined-up thinking by the Government is that we will see steady growth of between 3% and 4% per year for the next three to four years. Looking at big-ticket macroeconomic measures, which do not interest most people but which remain important, we have exited the EU-IMF programme. Members who were present in November 2010 will remember Ajai Chopra crossing from the Merrion Hotel to the Department of Finance. They will remember that there was almost a sense of relief that the IMF was taking over the country. It was a low point. We made changes to the IMF loans and the promissory notes which free up billions of euro over the lifetime of the loans. The rating agencies are positive about Ireland's future, and ten-year sovereign bond yields are at record lows. Recently, a 15-year bond issued by the NTMA attracted one of the lowest interest rates for this type of sovereign bond. It is forecast that gross debt ratio will drop below 100% of GDP in 2018, ahead of the reduction required by the Stability and Growth Pact, which is nothing more than living within our means. We have managed to provide services to those who are the most vulnerable in our society and also in education, health and housing. There is an expected investment of €2.2 billion in housing, where a genuine need exists, over the coming years. It is a measure of good governance rather than the hocus-pocus ideas thrown out by the Opposition in these speeches. In October 2011, unemployment was out of control, and in the three years before it peaked in 2012, 300,000 people lost their jobs.

Our economy was contracting and there were massive cuts in public services and increases in taxation.

The Deputy is joking.

Thanks be to God we have put the brakes on the runaway train that was doing serious damage not just to our economy but to the livelihoods of so many people in the country.

Will the Deputy adjourn the debate?

He can do it now he has stopped the runaway train.

Debate adjourned.