I move amendment No. 1:
In page 13, to delete lines 16 to 32 and in page 14, to delete lines 1 to 20 and substitute the following:
1. —As respects the year of assessment 1997-98 and subsequent years of assessment, the Finance Act, 1980, is hereby amended—
(a) in section 1, by the substitution in subsection (2) (inserted by the Finance Act, 1989) of ‘£9,000' and ‘£4,500', respectively, for ‘£7,400' and ‘£3,700' (inserted by the Finance Act, 1995), and
(b) in section 2, by the substitution in subsection (6) (inserted by the Finance Act, 1989)—
(i) of ‘£10,000' and ‘£12,000', respectively for ‘£8,600' and ‘£9,800' (inserted by the Finance Act, 1995), in paragraph (a), and
(ii) of ‘£5,000' and ‘£7,000', respectively for ‘£4,300' and ‘£4,900' (inserted by the Finance Act, 1995), in paragraph (b),
and the said subsection (2) of the said section 1 and the said subsection (6) of the said section 2, as so amended, are set out in the Table to this section.
(2) In this section ‘the specified amount' means, subject to subsection (3)—
(a) in a case where the individual would, apart from this section, be entitled to a deduction specified in section 138 (a) of the Income Tax Act, 1967, £9,000, and
(b) in any other case, £4,500.
(6) In this section ‘the specified amount' means, subject to subsection (3) of section 1—
(a) in a case where the individual would, apart from this section, be entitled to a deduction specified in section 138 (a) of the Income Tax Act, 1967, £10,000:
Provided that, if at any time during the year of assessment either the individual or his spouse was of the age of seventy-five years or upwards, ‘the specified amount' means £12,000 and
(b) in any other case £5,000:
Provided that, if at any time during the year of assessment the individual was of the age of seventy-five years or upwards, ‘the specified amount' means £7,000.".
This amendment is in relation to exemption of income tax, particularly of elderly people. It is a constant refrain on the doorsteps, when speaking to the elderly, that they feel they have paid enough tax in the course of their lives, and that the heavy taxation which applies to them is unfair and unduly burdensome. In this context I want to make a wider point while remaining relevant. Over the past number of years we have increased old age pensions approximately in line with the rate of inflation. That sounds sensible in one way because they are not declining in absolute value terms, but they are declining in relative terms to wages and earning power at a significant rate. As public and private sector pay increases in advance of the rate of inflation, the difference between the pension old age pensioners receive and the earning power of those in work is diverging rapidly.
A new policy is needed in relation to social welfare in particular. Both the contributory and non-contributory old age pension should be increased well in advance of the rate of inflation. If there is to be a real increase in social welfare expenditure at any given stage, it should be concentrated on those who are senior citizens and not, for instance, on those in receipt of unemployment benefit. We must ensure that those in receipt of and largely dependent upon pensions are given some measure of the growth in the economy through their pensions and not merely kept idling along with the rate of inflation while wages increase.
I listened carefully to the Minister on the radio this morning, following Deputy McCreevy. I note that such hauteur and gravitas has descended on the Minister that he will no longer engage in a head to head with other Opposition spokespersons.