Republican News · Thursday 21 February 2002

Finance Bill "leaves low paid in tax net"

The lesser-spotted PD is a very rare bird in the constituency I represent and I hope it will be rarer still throughout the country after polling day. But their Thatcherite influence on this government has been crucial and the Minister for Finance is their soul mate. - Caoimhghín Ó Caoláin

People on the minimum wage are still in the tax net as a result of the Budget, the Dáil was told by Cavan/Monaghan Sinn Féin TD Caoimhghín Ó Caoláin last week as TDs debated the Finance Bill. Ó Caoláin also criticised as a "gimmick" the special tax rebates for retiring professional sportspeople.

Caoimhghín Ó Caoláin began his contribution on the Finance Bill with a response to the Progressive Democrats, who had slammed Sinn Féin economic policy. He said:

"It was amusing to listen to the Tánaiste saying at her party conference that the forthcoming general election would present a choice between the PDs and the P45. By the look of them, very few of the PD delegates in Limerick have ever had to worry about a P45 or spend time standing in a dole queue. I doubt if any of them suffered from the social welfare cutbacks Charlie McCreevy introduced when he was Minister for Social Welfare. The lesser-spotted PD is a very rare bird in the constituency I represent and I hope it will be rarer still throughout the country after polling day. But their Thatcherite influence on this government has been crucial and the Minister for Finance is their soul mate."

The Sinn Féin TD said there was nothing in the Finance Bill to make him change his view that the government had introduced an inequitable Budget and had "squandered the best financial position enjoyed by any Government since the foundation of the State". He told the Dáil:

"The Fianna Fáil-Progressive Democrat government has had two enormous advantages enjoyed by no previous government in the 26 Counties. First, it has been in office at a time of exceptional prosperity, which resulted in budget surpluses in four successive years. Second, despite its slim Dáil majority, it has been able to plan for five budgets in a row. Those advantages have been scandalously squandered by the Fianna Fáil-PD government in every budget and Finance Bill. Not only has it failed to tackle the structural inequalities which warp our economy and damage our society, it has worsened those inequalities and widened the gap between rich and poor over its term."

Ó Caoláin said the refusal to extend medical card coverage to people other than the over 70s was "a disgrace and will be remembered as one of the great failures of this government".

"We are all of one mind that the over 70s are deserving of the medical card but what of those families stuck at the very bottom of the economic reality faced by people today? The minister complained of tighter fiscal restraints. Let us examine the facts. Corporation tax cuts cost £214 million in 2001 alone. That is more than twice what it would cost to extend the medical card to 200,000 more people. That is a damning fact and an indictment of the minister and the government. This does not take into account cuts in capital gains tax and other measures that will benefit the better off.

"The minister claimed that only 11% of the tax measures he introduced were aimed at high earners. He forgot to say that these earners also got everything the low paid got in addition to another slice of the tax cut cake. Meanwhile, workers on and below the minimum wage are still in the tax net. While the minister can generously play to the demands of his friends in the gambling industry, a significant number of workers earning less than the minimum wage will remain in the tax net. These workers and their families do not qualify for the medical card."

The government is restoring interest relief on rented residential property and reducing stamp duty rates for investors and Ó Caoláin described this as "a further bonus for landlords while the government has failed to protect tenants from rising rents and the growing rate of evictions".

Ó Caoláin said he shared the anger expressed inside and outside the House at the special tax breaks for professional career sportspeople as set out in the Bill:

"It is a gimmick and a stroke typical of the government. There are amateur sportspeople in many sports, including, but not only in the GAA, who give freely of their time and effort every week with no financial reward and no desire for financial reward. Trainers and administrators of sports and youth clubs are doing tremendous work with young people, often in the most deprived communities. These same clubs must go through the demeaning annual process of applying directly to the Minister for Tourism, Sport and Recreation for Sports Capital Grants. The Sports Capital Grants are clearly regarded as a goody bag for distribution by the minister.

"Last year, the minister favoured his own constituency once again, though I have no doubt that all the recipients were deserving. In Cavan-Monaghan, the minister's Fianna Fáil colleagues were informed of the allocations before other elected representatives. In one case, a Fianna Fáil councillor told a sports club member that he was giving him the news of the club's grant, "before Ó Caoláin got the list". Such practices are an abuse of the sports capital grant scheme and can only bring it into disrepute. That is the type of thinking that dominates the allocation of sports capital grants and is also the type of thinking behind this special tax break for a tiny elite of sportspeople. It gives out the message that the elite who make it big are the ones who really matter while the people on the ground must wait for the crumbs from the table."