Vol. 330 No. 11
asked the Minister for Finance whether he will consider between now and the introduction of the Budget raising the proposed £9.60 allowance to stay-at-home wives to £20 which would be liable to income tax as this would be more equitable and realistic.
24.
asked the Minister for Finance the total cost of the £9.60 tax allowance for women in the home as promised in the Fine Gael Election Programme; when it will be introduced; and the groups of women who will benefit.
With the permission of the Ceann Comhairle I propose to take Questions Nos. 23 and 24 together.
The essential principle underlying the proposed payment is that it is tax linked and involves a transfer of half the married tax credit to the spouse at home. The figure of £9.60 corresponds to one-half of the full credit. If this payment were increased, then the credit entitlement of the working spouse should logically be reduced pro rata. This, I consider, would be inappropriate.
Details of the scheme are being finalised and I intend to make an announcement in the immediate future.
There are very many questions unanswered here. First, let me repeat my question, because the Minister has not answered it. I have asked him what is the total cost of the tax allowance for women, the £9.60, as promised in the Fine Gael election programme. Surely that it straightforward. I did not hear the answer.
The tax credit as such, in so far as it involves simply a conversion into a cash payment to the wife of a tax credit which would otherwise be available to the working spouse, would have no net cost whatever. However, as the Deputy will also be aware, there is a proposal to extend it to people who are not in the tax net. That has a net cost and I will be announcing, in the relatively near future, the decision the Government will take in the matter. The matter will also be the subject of legislation, which it is hoped to introduce into this House before the Christmas recess. At that stage there will be an adequate opportunity to discuss the ins and outs, ups and downs of this scheme and how it works. I wish to stress that the £9.60, in so far as it is a transfer of a tax credit, has no net cost at all. The introduction, in combination with the introduction of the tax credit system, of new, lower rates of tax will cost money.
Further arising from the Minister's reply, surely he cannot say that there is no net cost in that transfer? The administrative costs alone, even if the assumptions he is making are right, will be extremely high. We are also given to understand that the administration of the scheme will be very difficult. Surely the Minister is not being honest when he says that the person whose spouse would not be paying sufficient tax, so that the wife could not get the full credit, will be compensated for the difference between whatever it might be? Surely there are costs there?
There is no net cost in the £9.60 in so far as it is paid to wives or spouses of taxpayers. That is the point I wish to establish, because there is no net cost in that operation. It will not cost the millions of pounds people are worried about. It is simply a transfer. If the Government decide to extend the £9.60 to people who are not in the tax net or whose tax payments and consequent use of their tax credits are less than £9.60 per week, then there would be a net cost. The Government will be announcing their intentions in this matter. However, I assure the House that the net cost, given the total tax collected, will be relatively modest. In relation to the administrative costs, the answers I have given were related to the costs of revenues foregone. Obviously there will be some administrative costs involved. The details of the arrangements for the payments are being worked out at present. It is not possible at this stage to say what the administrative costs will be. I do not think it is something which will cause enormous concern, but as arrangements are being worked out it is premature to put a figure on it.
(Dublin North-West): Is the Minister aware that all women were given the impression by the Fine Gael manifesto that they are entitled to £9.60 per week? The introduction of this allowance is discriminating against many women, especially widows and deserted wives——
A question, Deputy, please.
(Dublin North-West): Would the Minister agree with the suggestion that all stay at home wives should receive £20 per week, which would be taxed, and which would be a far more realistic way of compensating stay at home wives?
It might be more realistic but it would also be a lot more costly. We were not left with a lot of money to spend. We are doing our best against a very difficult background. It was made quite clear during the election that the £9.60 was a tax credit and would be paid only to wives of taxpayers. I remember answering numerous questions on that subject, both in the media and on doorsteps. Subsequently, in the discussions with the Labour Party prior to the formation of the Government, they made the proposal, which we accepted in principle, that the scheme would be extended to wives of people who were not taxpayers. It is in that area that the relatively modest net cost to which I referred will arise.
In the case of a small farmer, small shopkeeper or a person with a family who are not paying income tax, surely it is right that they should get the £9.60, as all the Minister's canvassers told the people of Carlow and Kilkenny prior to the general election?
I do not accept that our canvassers said that. The Government's intentions in this matter will be announced shortly and a detailed opportunity for scrutinising, arguing over and complaining about it will be made available to the Deputies opposite before Christmas because we will be introducing legislation to give effect to the £9.60. That debate will give Deputies an opportunity to say whether they are against the £9.60 or for it, something they have avoided doing for some time.
We cannot anticipate that debate. I have allowed a lot of latitude in this matter. I recognise the fact that it is a subject of great interest but I have to terminate it now and go on to the next question. We could go on for ever and, if I could change Standing Orders, I would gladly do so. The Minister has given an undertaking that the matter will be debated. Therefore, could we now go on to the next question?
In view of the fact that it will be six months before anybody can put down a question with regard to the £9.60, are Deputies not allowed at least one supplementary question to the Minister for Finance?
The Minister has given an undertaking that it will be debated in this session. There is no question of six months.
If the Deputy wants help in drafting the question——
This proposal is of some importance. Does the Minister not realise who won the elections?
The Deputy asked a question about an announcement to be made by the Government. When the announcement is made, he can ask all the questions he wishes. If he wants any assistance in the drafting of his questions, from my lengthy experience in opposition, I will assist him.
I cannot allow any more supplementary questions on this subject. I am now asking the Minister to proceed with the next question, unless there is a question on a specific point of order. When I am standing, the Deputy must resume his seat. I ask Deputy Kitt for a question on a point of order.
In these discussions which will take place regarding the £9.60, could the £9.60 which the sheep farmers were supposed to get be included?
That does not arise on this question.
I recollect that that was negotiated by the previous Government.
I am sorry, I must take the action I am taking. Question No. 25.
