Ged Nash: Finance Bill ignores PAYE workers, favors hospitality

I'm pleased to speak on behalf of the Labour Party on this Bill, but I will speak predominantly on what's not in the Bill more so than what's in it and the effect of its provisions. Day in and day out we see the impact of the cost of living Parma crisis of the last few years. And Minister, as you know only too well, and all of the evidence shows this, that the impact is felt most acutely by those who are on low and middle incomes and those who depend on the state for their small incomes. We know the outside causes of this, the exogenous causes of this, a global pandemic closely followed by war on the continent of Europe and then the effects of Trump and Israel's insane folly in Iran. Now we cannot but hope that we are near the end game of that and that fuel prices and the world's economy can get to a point where we can all catch a breath. That I think is the one thing that unites us all in this House. But any of us with any sense knows that no government, regardless of how fortunate this country is in terms of the surpluses we post year in, year out, can insulate every home and business from the effects of inflation. And anybody who pretends we can is simply playing political games. Now what divides us here though is how the resources we do have to help have been deployed and on what basis. And the truth is that close to €750 million was dished out to a noisy group who stopped much of the country from getting to work, to buy their silence, to protect them, and that's now being entrenched in this legislation. And the other truth is that PAYE workers looked on at the events after last Easter and the reality dawned on them that this must be how you do business with this government. And this isn't a good place to be for any government. Now I wouldn't read too much if I were to tarnish that into a by-election win in Galway. There were local circumstances at play there and candidate quality and so on. PAYE workers and the trade union movement will, I can guarantee you, be much more muscular when it comes to pursuing pay claims and improved conditions based on the message sent after last year's, last Easter's fraud events. And the discontent across the country, the kind of silent discontent in households across the country is real because the very real impact of this cost-of-living crisis is very, very real. It is affecting people day in, day out from the choices they make and the limited resources that they have. And all of this is playing out before we see a likely two or three hikes to variable mortgage interest rates over the next few months and the inevitable energy price rises as we face into the winter. As if domestic energy prices in Ireland weren't already high enough. Allied with ever-rising grocery price rises, no sign of the 200 euro a month childcare we were promised or a break in college fees, rising health insurance and back to school costs and so on. Households are in very real and present trouble. But you wouldn't think it from this finance bill and from the government's actions over the last few weeks and months. Now much of this difficulty Minister can be traced back to decisions made in Budget 2026. And here's the truth, no matter what way you want to spin it, PAYE workers were left behind. It's why we produced a number of weeks ago, and Minister you responded to that particular initiative, it's why we produced in Labour a mini-budget, for the want of a better description, to try to assist working families between now and the budget, people who have been told to wait for a breather from the cost-of-living crisis that is so badly affecting households across the country. We know in the budget as I say PAYE workers were left behind and we know why. Of course social welfare payment increases have been eroded by inflation. The tax package favoured hospitality over working people. And this finance bill gives the government a chance to be more ambitious for working people, for the real engines, the real producers of goods and resources in this economy. It gives government a chance to change course, to be more ambitious than has hitherto been the case. But in last year's budget, and it's important that we reflect on this, in last year's budget it was decided that a full year cost to the taxpayer of 680 million euros, the VAT rate in the hospitality sector will go from 13% to 9%. Now I've heard people argue this is government policy, and we know it was Finnegale policy before the 2024 general election, but so is the indexation of PAYE tax bands and rates and credits. And we all know politics is about choices and I'm comfortable with that and people in this house should be comfortable about it. It's the bread and butter of politics and politics Minister I think you will agree is fundamentally about the generation of resources, creation of resources and how we redistribute those finite and precious resources. And the bizarre decision was taken to cut VAT for the hospitality sector to boost the bottom line of restaurants and cafes instead of providing some respite to working people. And we know Minister, and I've said it time and again, and you've seen the evidence as much as I have, all of the evidence shows, the objective evidence, the impartial evidence shows that this cut will favour the chains that don't need it rather than the small independent operators who we know are finding going tough. What makes it all the more bizarre is the fact that we are using tax policy and how we distribute our precious resources to narrow the tax base for sector that in its totality is adding jobs by the week. That makes no economic sense whatsoever. What's more is that all of this is being paid for by the working class having to forego a small breather on their income tax with hard-earned pay rises swallowed up by inflation and the failure to ensure that rates, bands and credits kept pace with the very inflation that we're trying to combat at the moment and that's been and it's proven to be so problematic for consumers across the country. All told what we're dealing with now because of those decisions, those fateful decisions taken last October and reflected in the Finance Bill, the Finance Act I should say, giving effect to the budget measures, what we're dealing with now is effective pay cuts for many low and middle income workers at the very time when the cost of everything is going up. And the Tolerance Day, I found this remarkable, the Tolerance Day yesterday, it's reported in the Irish Times today when he was talking about his favoured retail savings and investment scheme, the thing that he's announced and re-announced now about 562 times, he was saying well PAYE workers are irked, they're irked over the fact that income tax, bands, rates and credits weren't adjusted to allow for inflation this year. They're more than irked, they're more than irked, they're incredibly annoyed, incredibly annoyed about this because they can feel the impact in their day-to-day budgets, they can feel the impact in their inability to manage their weekly and monthly budgets, the household costs. I mean the PAYE workers are being irked, that's the understatement of the year, they've been left behind, left behind. And wait until that particular measure goes live now on the 1st of July, when people understand that the money that should have been going to them for some tax adjustments is going to McDonald's and Supermax and KFC and so on. It's absolutely bizarre, it's bad economics and it's even worse politics. The Gaelic Fianna Fáil Minister will have some explaining to do to constituents when they realise what's happening. Nobody's saying for a moment that the hospitality sector, parts of it, don't need some structural reforms, they do. But decisions taken to reintroduce a lazy rinse and repeat, that cut that's been around in one form or another since 2011 is not the answer to the structural problems that small hospitality businesses face. The answer is addressing once and for all the ridiculously high energy charges in this country for high consumers of energy like the hospitality sector. It's a real reform of the commercial rates system for good bricks and mortar businesses around the country that employ important and significant cohorts of people. And ensuring as well that staff in the sector, that we can create a real career in those sectors. It used to be the case when we had organisations like CERT who were training to a very high standard internationally, chefs, hospitality managers and so on. That's what we need to look at rather than the short term sugar rush of VAT cuts improving the bottom line for a short period of time for hospitality businesses that are finding it difficult. So Minister, if you were serious about giving working people a break, you would actually use this bill to address that issue and to use the resources we do have available to index PAYE workers tax rates, bans and credits back to January and ensure that there's some respite for such workers. But we know from experience that that will not be the case. PAYE workers have been told in this bill that they're going to have to wait. And we've been told time and again, well, with the exercise duty cuts that this bill will legislate to bring into primary legislation based on the financial resolutions a number of weeks ago, that well, there's some respite from high prices at the pump for diesel and petrol for PAYE workers. That's an afterthought. That's an afterthought. That wasn't the target and the focus of this measure. PAYE workers certainly weren't. Like the measures, like what we in Labour said when these measures were first announced a couple of months ago, nothing in that for PAYE workers. There's nothing in this bill for PAYE workers either. And you'll reap a political whirlwind because of that. And you'll reap a political whirlwind because of that.