Estimates mean cuts and stealth taxes

Rejecting the Book of Estimates presented last week, Sinn Féin TD Caoimhghín Ó Caoláin accused the government of launching a "two-pronged attack on citizens" by charging more money for less services. Speaking during the debate in the Dáil on Tuesday, the Cavan/Monaghan TD described as "mean and dangerous" the new restrictions on the rent supplement, which he said would "penalise the homeless, the poorly housed and those on the economic margins".

"Before the General Election, Fianna Fáil promised to extend the medical card to a further 200,000 people" he added. "Since the General Election the same people who were promised that they would benefit by this extension have been hit by increased charges for health services.

"The new rise in fees for visiting Accident and Emergency comes after a rise of 26% last year. It comes at a time when people are on trolleys in A&E units and when the government is proposing to close such units in local hospitals under the Hanly report where it has not already done so. It comes at a time also when the Primary Care units promised by this government have not been delivered. Such units would help reduce the numbers of people going to A&E.

"These health charges are a further blow to those whose income is just above the limit for the medical card. They will now face higher costs for medicines after another significant increase last year. The Drugs Payment scheme threshold is up from €70 to €78, following a €5 increase last year. This will cause real hardship.

"The allocation in the Estimates for health do not provide for the reforms which the government claims it is committed to. They will simply keep the system limping along from crisis to crisis.

"Already I have received representations about the cuts in Back to Education Allowance where the qualifying period is rising from six to 15 months. A constituent has pointed out that he will now have to claim unemployment benefit for an additional nine months. This cut is illogical and can only serve to dissuade people from returning to education.

"Minister McCreevy in his Estimates statement last week spoke of 'a tighter approach and greater prioritisation of spending' but where was this approach when he was bankrolling his pet project in Punchestown in his own constituency? This symbolises the overall economic mismanagement by this government.

"Who is paying the price? The ordinary taxpayer, of course. The Estimates and Budget last year and this year's Estimates again have spawned a whole series of stealth taxes. These are taxes which take no account of ability to pay and therefore hit the lower paid citizen the hardest. This government has increased health charges, local authority charges, Value Added Tax, higher fees for State examinations and many others. These stealth taxes have effectively wiped out the previous PAYE tax reductions for the lower paid and the value of the minimum wage.

"But look at the other end of the scale. We are only now seeing the full extent of how the wealthiest in our society have successfully shirked paying their fair share of tax. Earlier this year it was disclosed that 254 Bank of Ireland customers with offshore accounts had settled unpaid tax bills with the Revenue Commissioners. The tax recovered amounted to €100 million. One individual paid €7.3 million in back taxes. A recent study by KPMG found that over €4 billion had been lodged in the Isle of Man bank accounts of six Irish subsidiaries between 1998 and 1999.

"Of the top 400 earners in this State surveyed in 2002 by the Revenue Commissioners, 117 had an effective tax rate of less than 30%, in a system where over 500,000 PAYE workers are paying the top 42% rate of income tax. 18% of the top earners were paying less than 15% tax. Some were paying no tax at all.

"Instead of restructuring our tax system to create greater equity and ensure greater revenue from the wealthy this government punishes the ordinary citizen with stealth taxes and social welfare cuts. Instead of providing both the reforms and the resources needed to deliver better health, education, social welfare and infrastructure, this government mismanages on a massive scale and squanders the resources of the Irish people."