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Dáil Éireann debate -
Thursday, 24 Jun 1982

Vol. 336 No. 7

Finance Bill, 1982: Committee Stage (Resumed).

Debate resumed on amendment No. 1:
In page 9, line 19, to delete "£4,400", and substitute "£4,800".
—(Deputy B. Desmond.)

Before Question Time I was referring to the strategy of the Coalition's budget. The Coalition proposed to tax poor people on food, a very essential item. Deputy Bruton and other Fine Gael Members seem to be worried about the underprivileged now, but there was not too much concern in January when they were asking our people to pay a whopping £47 million as a result of the removal of food subsidies. They also proposed to impose VAT on footwear and clothing amounting to £58 million. Deputy Desmond, in the course of the Second Stage debate, told us that if we imposed certain taxes we would be robbing Peter to pay Paul. I would not agree with some of the figures the Deputy produced when he was asked where the additional revenue would be raised. To be fair to the Deputy, I accept that he does not have the up-to-date information on the costings. We must ask ourselves, whether we opt for the £4 million or the £6½ million relief, where the money will come from.

With regard to the family income supplement proposed by the Coalition, the £9.60 per week that was to be taken off a husband's income and transferred to a wife, I should like to state that such a procedure would make little of the husband and seem to indicate that he was not supporting his family. Of course, we all know that the people pegged that out on top of its head. We changed that system and passed over the supplement directly.

Our proposal.

The Coalition were swapping the pockets. It should be remembered that only one-eighth of those eligible for that supplement applied for it even though the Minister for Finance carried out an extensive advertising campaign. Even with the assistance of high powered PRO people the Government failed to rescue that situation and get the people to apply for the supplement. The Coalition failed.

Not at all.

Of course the Coalition did but the Deputy does not have the guts to admit that now.

We have plenty of guts.

The proof of the matter is that seven-eights of those eligible did not apply. Why did they not apply? They did not do so because they copped on. Before the Coalition left office everything was on the table for alteration but up to then it was not possible to alter anything.

Fianna Fáil have altered a lot since.

Financial commentators and political correspondents have said a lot about the budget deficit, revenue income and borrowing requirements. It is easy for them to talk, but the Government must find the money.

If the Government resign they will not have to find the money.

The Coalition ran away.

Fianna Faíl took the wrong turn.

In regard to the last statement, I should like to remind the Deputy that the leaders of Fine Gael and Labour, who were members of the Coalition Government, did a U-turn after the defeat in the Dáil in January. They did a U-turn in regard to VAT on clothing and footwear and were going around measuring the sizes of shoes.

We did not do any U-turn on the tax on discretionary trusts.

Deputy O'Leary did a U-turn and the night before he left office everything was on the table for a U-turn or any other turn. The Opposition do not like to hear the truth but they should accept facts.

We should have a vote.

We are having a filibuster by the Government.

The position on the issues before us is clear. We all know of the famous plan of the Coalition to take £9.60 from my pocket and put it into the pocket of someone else.

On a point of order, I should like to point out to the Chair that this morning the speakers who were dealing with the general taxation situation were brought to heel by the Leas-Cheann Comhairle on the basis that speakers would confine their remarks to amendments Nos. 1 and 2. The Minister of State is more than straying a little at this stage and I expect that the same restrictions apply to him as applied to all other Members.

I was referring to the fact that Deputy Bruton dealt with the family income supplement and I was anxious to put the matter right. I never heard so much hypocrisy from the Opposition side of the House. Of course, I am aware of the situation that exists. The Labour Party were members of a Government who allowed food subsidies to be withdrawn and they are supposed to be the ones who look after the under-privileged. They were not very concerned in January.

(Cavan-Monaghan): Fianna Fáil put VAT on food but we took it off.

The question is: where will the Government get the money to implement the suggestions made by the Opposition? Introducing changes is a slow process but when we were elected to Government we had to produce a budget within two weeks. We had to make all the necessary arrangements to get in revenue. That is the situation.

(Dublin South-Central): I can appreciate the amendments and concern which the Labour Party and The Workers' Party have for the lower paid. This can be shared by everyone. However, we have been taking the wrong approach over the last few years towards improving the standard of living for the lower paid workers. Our primary aim should be to get inflation down. This is the most positive way we can make a contribution to the weakest section of the community.

The 1977 manifesto was the cause of that.

(Dublin South-Central): The higher the inflation rate goes, the richer the rich become and the poorer the poor become. We must take a positive stand and see what road we are following. Budget deficits must be controlled. The current deficit is the figure at which we hope to arrive this year.

Sections 1 and 2 of the Finance Bill deal with personal allowances and changes in the tax bands. In the amendments dealing with the sections — there are about 24 of them — there has been no voice from Fine Gael to adjust any of the bands nor has there been any concern for the lower paid sections of the community. Where is Fine Gael's voice? Why do they not discuss this at their Front Bench meetings?

We will invite the Deputy to the next meeting.

The Front Bench cannot hold them all.

(Cavan-Monaghan): There is no congestion in Fine Gael in Wicklow. What about Fianna Fáil?

(Dublin South-Central): There is no amendment from Deputy Bruton dealing with tax bands or personal allowance. They are using the amendments put forward by Labour and The Workers' Party to cause a general election. If they had the courage of their convictions and concern for the working people, they would have put down amendments. It is hypocritical to use those parties.

The same way as you are using other parties.

Watch yourself in Meath.

(Dublin South-Central): The sooner The Workers' Party and the Labour Party take this into consideration when voting in the division the better. I have no doubt that the main Opposition party are not concerned that the bands should be changed. Deputy Bruton brought in a budget and had an opportunity then to insert in the income tax code what he is asking the Labour Party and The Workers' Party to do now. If Fine Gael had tabled an amendment of their own, I would give them credit for it but it is hard to believe that they did not bring forward one amendment of their own that they could stand over and speak on. That reflects the true voice and merit of Fine Gael. They do not believe in these amendments.

If we do not continue to hold the line in the budget, inflation will rise to 25 per cent. That will be reflected on the weaker sections of the community. It is only by expanding the economy, bringing down inflation, bringing confidence back into the export market——

On a point of order, the House is debating a very long Finance Bill with many sections. It seems to me, with great respect, that the Government are afraid to face the vote we have been expecting for some time. There appears to be some conference going on elsewhere in the House while other people are being sent in to waste the time of the House. I suggest we have a vote on this amendment now and get an election over with.

That is not a point of order.

(Dublin South-Central): I am not trying to prolong the debate. I am putting the facts as I see them.

The Opposition do not want to hear the truth.

We never heard the truth.

Deputy Fitzpatrick on the amendment.

He never was on the amendment.

(Interruptions.)

(Dublin South-Central): If the Deputy is that concerned about income tax bands, why did she not make representations to Deputy Bruton?

I am concerned with getting the Deputy out.

(Dublin South-Central): There is the concern for the weaker sections of the community.

Speak for yourself and your party.

(Interruptions.)

(Dublin South-Central): As I have said, we are not afraid of votes and divisions.

Let us have one now.

(Dublin South-Central): Do not be so impatient about it. We will have time enough for it.

The Deputy may not.

(Dublin South-Central): I appeal to Deputies to consider the serious consequences for the economy. There is no doubt that we are facing difficult times. Everyone knows this. We know what the inflation rate is at present. This must be our primary objective. If the concern of Deputies is for the common good, a positive approach must be taken to keep the budget deficit at what it is. I fully appreciate the Minister's concern that this is done because, if it is not, it will mean more taxation and the standard of living will fall still further for the weaker sections of the community.

(Cavan-Monaghan): I have always held the view, particularly since the introduction of PAYE, that it is essential to have a fair and equitable system of taxation. Under the PAYE system of taxation, the wage-earner, worker and lower paid have no option whatever but to pay up to the last penny. It is taken directly out of their pocket and they cannot make any private arrangements for themselves. There is an onus on every Government to ensure that the system of taxation is fair and equitable so long as they operate this system.

I was glad to be a member of a Government which, for the first time since the State was founded, did something to introduce equity in taxation. We did this by introducing the capital gains tax. Prior to that the dealer in lands, the speculator in shares, the dealer in house property and so on could make £50,000 a year, which was a phenomenal amount of money at the time, without attracting one brass farthing of taxation because that was not regarded as income but as a capital gain.

(Dublin South-Central): What has this to do with the amendment?

(Cavan-Monaghan): It has every bit as much to do with it as the Deputy's contribution had. It was my namesake who prompted me to say what I am saying.

On a point of information, does Deputy Hussey's request not extend to Deputy Fitzpatrick so that we can go ahead with the division?

Deputy Fitzpatrick must be allowed make his contribution on the amendment.

(Cavan-Monaghan): I will be brief and concise. I was proud to be a member of the Government who introduced the capital gains tax and who, by way of that tax, got at the speculator, the dealer and anyone who was in receipt of a big income but who was not paying tax. We left behind a good and workable money-earning tax system but Fianna Fáil on coming into office altered that capital gains tax legislation. They pulled out its teeth, rendered it harmless and left it in such a way that while it remained in name it was not bringing in any worthwhile revenue. In the budget that we introduced in January we proposed to restore the teeth to the capital gains tax, to give it back its power.

A fair system of taxation is necessary. That is why I am happy to support this amendment in the names of my friends in the Labour Party. The amendment is framed so as to help the lower income group. As the Bill is drafted it is proposed to ask a married couple earning £4,400 jointly to pay income tax. In other words, a couple with a combined income of less than £100 per week, that is, less than £50 per spouse, are to be asked to pay tax. That is unjust, regardless of who may be responsible for it. The amendment proposes to increase the figure to £4,800.

But who will pay for it?

Deputy Fitzpatrick must be allowed to make his contribution.

(Cavan-Monaghan): When the Deputy tells me how the £45 million concession is to be raised, I will tell him how the change involved here will be paid for.

(Interruptions.)

Deputy Fitzpatrick without interruption, please.

(Cavan-Monaghan): I believe, as Deputy Fitzpatrick believes, that we need to cut down inflation, that we need to bring about more production and that we should be more competitive. But we will not become more competitive and neither will we increase production or cut down inflation by discouraging people from working. The present taxation system is turning people away from work. A man who is a lorry driver tells me that in the changed tax bands, he will be in the 60p bracket. Is there any encouragement for that man to continue in his job? This is a good amendment and one that should be supported. If accepted, it will encourage people to go back to work. Fianna Fáil cannot offer any good reason for not being able to get the few million pounds extra that would be necessary to implement the change proposed. They have no problem in finding between £40 million and £50 million for a little bit of this city. They are able to give £500,000 to this or that local authority as a stop gap measure. That will not encourage work. Therefore, in the interest of equity in taxation and of encouraging people to work, I am supporting the amendment.

We have tabled this amendment and put in a number of speakers to support it because we believe it is a reasonable amendment, an amendment designed to help those who have been buffeted by the increasing cost of living and who are in need of tax relief. We have costed the amendment to the best of our ability and it is a reasonable cost. Our party have borne the heat of the day in attempting to bring our economy back towards a direction of growth. We have taken the risks and the unpopular decisions inherent in that responsibility. It is important from the point of view of the country that we know where we are going vis-á-vis this Government and in terms of what remains in this Finance Bill. There is an air of uncertainty about the intention of the Government in relation to the various amendments that have been tabled to the Bill. It is time to end this uncertainty. We are very serious about the content of the amendment. We have wrung the elements that are in the amendment and we are now calling for a vote on it. The result of that vote will be a test of the Government's approach to the other elements in the Bill.

In order that we might clear the air, there is a very distinct difference between the rulings of yourself and of the Leas-Cheann Comhairle in respect of amendments Nos. 1 and 2. Certain reasons have been put forward by both Fine Gael and Labour for taking amendment No. 1 separately. The point being made was that amendment No. 2 differed marginally in that it sought to increase the allowances. I think that I am entitled at this time to formally move amendment No. 2.

The Deputy cannot do that. Deputy Barry Desmond asked that his amendment be taken separately.

It has been stated that if amendment No. 1 is not accepted, amendment No. 2 cannot be moved.

Amendment No. 1 will be dealt with separately and the Deputy may then discuss his amendment.

Lest the air be clouded up in that direction, we should make it absolutely clear for everyone concerned that the position is that if amendment No. 1 is successful an opportunity will then arise for The Workers' Party to debate amendment No. 2 but that if amendment No. 1 falls that party will not have the opportunity of voting on their amendment. Therefore, if they wish to discuss or vote on amendment No. 2, they must support amendment No. 1.

We should be crystal clear as to the procedure we are adopting. The first motion which you will have to put before the House is that £4,400, the existing limit, should stand. In the event of the House deciding that these words should not stand, you will have to put the question immediately that the figure of £4,800 should stand, that being the content of my amendment. Presumably, Deputies would then vote on that. I understand also that in the event of the £4,800 figure being accepted, that becomes the substantive decision of the House and amendment No. 2 is thereby negatived, because the House has decided that the new rate should be £4,800 and other amendments relating thereto are irrelevant at that stage. Deputy Sherlock and his colleagues should be under no illusion that this is a serious matter, that they have to decide in the first instance if they wish to see £4,400 remaining as it is and, secondly, if not, they must decide whether they wish to support the Labour Party amendment for £4,800. That is their prerogative.

I am not and the Labour Party are not playing games, either of the upstaging variety with amendments put down last night or of any other variety. We are not playing games just to defeat the Minister on the Finance Bill. That is not the purpose of the exercise. Neither are we playing games simply to defeat the Government and possibly have a general election or perhaps force the Government into having a motion of no confidence with the prospect of witnessing further gyrations in the lobbies as Deputies make up their minds where to go. We are in the process of discussing on Committee Stage a very simple amendment from the Labour Party the cost of which we have quite deliberately reduced to £4 million for this year or £6 million in a full year. Lest there be any illusion on the part of The Workers' Party I would not support an amendment that it should become £4,000 or £5,000. We stand or fall on our amendment. We are not here as cannon fodder for any other party who put down amendments. Let that be absolutely clear. I must say this with great deference to The Workers' Party so-called Deputies behind; they will have some difficulty on this whole question.

On a point or order, that man just called us "so-called Deputies". I wish him to withdraw that.

On a point of order——

Is this a point of order?

I am speaking on a point of order.

There is a point of order from Deputy De Rossa. Is Deputy Desmond speaking on a point of order?

I am currently speaking on a point of order.

Even on a point of order that sort of reference is not permitted and I would ask the Deputy to withdraw it.

Yes, I withdraw it. But I want to put it on record that it is about time——

Is this a point of order?

I am speaking on the amendment.

The Deputy cannot have it both ways. He can either have a point of order or speak on the amendment. He refused to yield to Deputy De Rossa because he said he was speaking on a point of order. The Deputy should not try to confuse the House.

If Deputy De Rossa wants to make a point of order——

I wanted him to make it but you said you were speaking on a point of order, which was deliberately misleading the House.

My regrets. I speak on the amendment at this stage.

On a point of order, I ask that the Deputy withdraw the remark "so-called Deputies".

I did that, no offence whatsoever meant in that regard. This is not a personal matter at all. However, I say to the five Deputies behind me: I find it somewhat incredible that when we had a Financial Resolution in relation to the budget a short time ago, Financial Resolution No. 3, which contained for the year ahead the personal allowances, including the £4,400, Deputy Bruton put down an amendment seeking to transform it into a tax credit system and behold, The Workers' Party Deputies fully supported the Financial Resolution. The Labour Party voted against it and in my opinion reacted honourably. Now, because the Labour Party puts down an amendment to increase the £4,400 limit to £4,800 The Workers' Party have apparently undergone a traumatic change of mind. That must be put on record, because if we are going to have a general election we will not have it on the terms of supporting Government Financial Resolutions right through the lobby of the House and careering into selected constituencies and then saying: "We stand for further PAYE relief, further taxation relief right down the line".

I welcome the decision of Deputies to stand for Dáil Éireann and participate in the democratic process, but they cannot have it both ways in the parliamentary proportional representation democratic process. I in no way ask for support — it is up to the Deputies to decide how they wish to vote on this amendment. I will leave it at that. Further, to copperfasten the point, if the Deputies have put down amendments as they have done — any Deputy can put down amendments; they shoved in a shoal of them last night about 6.30 or 7 p.m. to the General Office — one wonders at the tremendous change of mind that has occurred in this regard since the Second Stage of the Finance Bill only seven days ago. The Finance Bill contains, as the Minister outlined in detail, the personal tax changes. They fully supported the Government on that. Therefore, let it be clearly on the record that we are asking the Minister to accept our modest amendment, our necessary amendment, and we are not going to support the £5,000 lark in that regard. I want to make that absolutely clear.

Finally, may I say to the Minister — and he may want to respond — that the Labour Party have other amendments down in relation to the Finance Bill. I am not in the business in moving amendment No. 1, of indulging in a Dutch auction, of upping the ante — if one amendment is accepted, you are screwed in the next amendment and the one thereafter and so on. That is the way the Finance Bill is structured. If you wish to discuss a matter, you must table an amendment.

I am not going to behave in a wholly irresponsible way in regard to any amendment. In relation to some of the amendments I put down I do not know the precise costings because the Labour Party do not have all the data available to the Department of Finance. I do know that some of our amendments — and additional amendments follow on — in section 3, for example, will cost a substantial amount of money. I am acutely aware of that and I am quite prepared to say to the Minister that I propose to act in a wholly responsible, constructive way in this matter. I ask the Minister would he be prepared in that context to accept our amendment. Inevitably I think the choice must rest with the Minister in that regard. I make that point not in any sense of merely endeavouring to defeat a Government for the sake of defeating them; I make it to make progress with the Finance Bill. The Minister has indicated that he currently has a departmental expenditure review going on which apparently is to yield £20 million. No doubt that review can be extended; no doubt the £4 million and £6 million in a full year can be accommodated without destroying the integrity of the current budget deficit which we want to maintain in consideration of the financial solvency of the country. I have no doubt that also can be maintained and I just want to ask the Minister if he has any response to make.

First, I should like to thank Deputy Desmond for his explanation regarding his approach to the amendments. It is very easy for any Deputy to make the case in relation to £4 million in the case of the Labour Party amendment and £6.5 million this year in the case of The Workers' Party amendment. The Minister and the Government are being asked to accept these. I do not intend to delay the proceedings and I have desisted from contributing to the debate and answering some of the points made in the last couple of hours. If we look at this, the first series of amendments, which cost £4 million to £6.5 million, and then go on right through the series of amendments up to No. 90, or whatever it is, the same point can be made. We have amendments down in the names of other Deputies. We have an amendment from Deputy Bruton in relation to VAT on imports which would cost £140 million. Step by step, amendment by amendment, the same case is made to the Minister and to the Government: it is only £2 million, only £4 million. I said at the outset in relation to this amendment that it is £4 million and that it goes on to the budget deficit, on to the level of borrowing. Multiply that by 90 other amendments and you run into hundreds of millions. I made the position clear in my first intervention on the amendments and I have no alternative but to oppose it.

The whole thrust of the Fine Gael approach to this amendment seems to be that they have something better to offer. Possibly they made a mistake this morning in seeking to have amendments Nos. 1 and 2 separated from the rest of the amendments because they have spent the rest of the time talking about everything else in the Bill. The point was made that they did not ignore the less well-off, and they did not. They proceeded in their budgetary efforts to place tax on clothes and shoes, to remove the subsidies on butter, etc., and unfortunately at that time they were supported in that move by the Labour Party.

In speaking this morning to amendments Nos. 1 and 2 Deputy Bruton stated that they had tried to put tax on social welfare benefits because they considered that would be of benefit to the lower paid. Really I cannot see the logic of that when you consider that the social welfare benefits which people receive have been paid for by themselves, that these recipients have paid tax on the contributions they made in relation to the social welfare element. The whole thrust of the Fine Gael approach on this amendment has been to try to pre-empt a debate on the rest of the Bill. We are in this House to try to debate a Bill for the organising of the finances of the State. Either we are serious about trying to improve this Bill or we are not, and it would seem that Fine Gael are not serious about that.

I am pleased that the Labour Party are making a serious attempt. They have stated that they want a debate on this section and on all the other sections. I regret that they have indicated that they will not support our amendment on the tax exemption limits, because our amendment will benefit 32,000 of the lower paid, whereas the Labour Party amendment will benefit 19,000. Therefore, there is a significant difference between what the Labour Party are proposing in relation to benefits for the lower paid and what we are proposing in this regard. As to the cost, it has been stated that the Labour Party proposal will cost £4 million and ours approximately £6.5 million. But we have indicated that the rest of our amendments on this Bill show clearly how this money can be raised in terms of wealth tax etc., trying to close the various loopholes in our tax system, and taking wealth from those, who continually avoid paying income tax of any kind. When you consider that the PAYE sector — who, as has been said already in this House, pay their tax every Friday night — are contributing 80 to 90 per cent of the income tax, whereas another large sector of the community such as the farming sector are contributing something like 1 per cent, you can recognise a serious anomaly there. If this House is serious about rectifying that anomaly, the House should support our amendment, which is looking for an increase in exemption rates to £5,000.

The case has been well made from these benches for the necessity of getting Government approval for this amendment on behalf of the lower paid and those who are overtaxed. We know that throughout the country in recent years there has been a great deal of discontent about the taxation position of this group. In that spirit we put forward this amendment. It is also important for the country to discover the nature of the scaffolding upholding this Government, their conditions and so forth. It is important that we know how the rest of this Finance Bill is to be taken. This amendment is the litmus test of the Government's approach towards amendments. My party in Government have borne the heat of the day in dealing with the problems of our economy in the spirit of normal exchange of debate in this House. We can take lectures from the Minister on difficulties facing the economy, but it comes ill from those benches when you think of their behaviour in recent months and years and their profiligate mismanagement of the economy which has brought the country and the economy to this threatened sorry pass. At any rate, after many speakers and many hours of a debate, while we welcome the spirit of loquaciousness which has descended on the Government benches, dissidents and supporters alike we now think that it is time for a vote. We have heard enough.

On a point of order, I am sorry for having to rise again, but on the result of this vote will depend whether there is a vote on amendment No. 2.

This vote is being taken separately on amendment No. 1.

If amendment No 1 is defeated I will have the right to call for a vote on amendment No. 2?

Deputies

No.

(Cavan-Monaghan): On a point of order, am I right in thinking that when an amendment or a number of amendments propose to delete words and substitute other words, particularly when there are more than one such amendment, the invariable practice here has been to put the question on the basis that the words proposed to be deleted stand?

That is true.

For the benefit of the House, Deputy Bruton insisted that they be taken separately.

On a point of order, with all due respect, Deputy Bruton may request what he likes, but precedent is precedent and there is an unbroken precedent that that is the way the vote is put.

For the benefit of the House, a number of Deputies asked that they be taken separately.

A number of Deputies have requested a number of things. You have a particular responsibility on this occasion to observe precedent and undoubtedly precedent demands that the first vote should be on the proposal that the words stand.

On a point of order, this morning the Leas-Cheann Comhairle ruled that, in the event of the motion "that the words proposed to be deleted stand part" being successful on amendment No. 1, amendment No. 2 would be out of order. That was the ruling the Leas-Cheann Comhairle gave this morning and which was accepted by the Deputies in the House.

On a point of order—

That ruling was given in the House this morning, a Cheann Comhairle. Are you changing that ruling or does it still stand?

I understand that Deputies then demanded that they be taken separately and discussed separately.

Different Deputies may demand different things. The House must be governed by the practice established over many years. I submit that the correct procedure is that the first vote should be on the question that the £4,400 in the Bill stands and the House would vote on that. That is the request I make, because that is in accordance with the rules of order of the House.

I understand that they are taken separately unless the House agrees that they be taken together.

They will be taken separately. That will be the first vote. If that is carried obviously that is the end of the matter. If it is defeated the next vote will be on the question that £4,800 would stand in place of £4,400 and that will be voted on. If that is carried that is the end of the matter. If it is defeated there will be a separate vote on the question that £5,000 stand part of the Bill instead of £4,400. Those votes would be taken separately. That is the long-established procedure. I am requesting that we proceed in accordance with practice.

I understand that Deputy Sherlock's amendment has not been discussed yet.

Are you changing the decision which the Leas-Cheann Comhairle handed down to the House this morning? It is on record.

On a point of order, he moved his amendment.

I support Deputy Collins. I asked the Leas-Cheann Comhairle for his advice this morning. I am not sure whether it was before or after his ruling. He informed me that if the vote on the first one was defeated, if the amendment stood, there would be no vote on the second one.

This is a reasonably serious vote. It would heap obloquy on the proceedings of this assembly if we were not able to proceed according to precedent. We should abide by precedent and approach the votes with absolute decorum.

This is what must be on the record. At an earlier stage it was proposed to take amendments Nos. 1 to 24 together and this was rejected out of hand. Two reasons were put forward. Deputy Desmond said that because his amendment was submitted earlier — how much earlier does not make any difference — he wanted it taken separately. Three or four Fine Gael Deputies, starting with Deputy Bruton, said strongly that by reason of the fact that amendment No. 2 proposed to increase the tax allowances it was separate and should be taken separately. That was the decision accepted by us at that time.

A Cheann Comhairle, may I ask you what do you intend to put to the House?

I understood that they were to be taken separately. That was my information.

On a point of order, you need have no concern they will not be taken separately. The point at issue which you seem to be evading, with great respect, is that in accordance with Standing Orders to amend a technical section of the Finance Bill the first vote to be taken is on the motion that the words stand. The words in the Bill relate to £4,400. We vote on that and, as you well know, in the event of those words being voted down, you are obliged to continue with my amendment which is taken separately and proposes that £4,800 be inserted instead. Then we vote on that. Any other interpretation is wholly unacceptable.

I was not here but I was informed there was disagreement and it was decided that they would be taken separately.

There is confusion. They are taken separately. If on the first motion it is decided that the words stand, the second does not come up. If the first motion is defeated then the Labour Party amendment is put. If that is defeated the Sinn Féin amendment is put. If the motion that the words stand is approved the Sinn Féin motion cannot be taken. That is the order to the House and that is the procedure which was agreed this morning. We cannot go back now.

I am putting the question that the figure proposed to be deleted stand.

The procedure is now agreed?

That is Deputy Desmond's amendment.

Deputies

No.

Sorry. I am wrong. "That the figure proposed to be deleted stand."

(Cavan-Monaghan): That means, in effect, that you are putting the section as drafted by the Government. If that is carried, the section as drafted by the Government stands. If it is defeated, you then put the Labour Party amendment. If that is defeated, you then put the Workers' Party amendment.

I am putting the question "That the figure proposed to be deleted stand. "Na Teachtaí atá ar thaobh na ceiste abraidís tá——

On a point of order, I did not become involved in the discussions this morning. Precedent has been mentioned very often in the past few moments. Generally speaking, as was suggested by the Chair in the first instance, the series of amendments to the section, 24 of them, would be taken together and discussed together. Some Opposition Deputies said they wanted each amendment taken separately. That is a change from precedent.

Deputies

No.

Of course it is, because in the past 24 amendments related to the one point have been taken together.

By agreement.

That is the only comment I have to make about precedent.

Question put: "That the figure proposed to be deleted stand."
The Committee divided: Tá, 80 80; Níl, 80.

  • Ahern, Bertie.
  • Ahern, Michael.
  • Aylward, Liam.
  • Barrett, Michael.
  • Barrett, Sylvester.
  • Bellew, Tom.
  • Blaney, Neil T.
  • Brady, Gerard.
  • (Dublin South-East).
  • Brady, Gerry.
  • (Kildare).
  • Brady, Vincent.
  • Brennan, Matty.
  • Brennan, Ned.
  • Brennan, Seamus.
  • Briscoe, Ben.
  • Browne, Seán.
  • Burke, Raphael P.
  • Byrne, Hugh.
  • Byrne, Seán.
  • Calleary, Seán.
  • Colley, George.
  • Collins, Gerard.
  • Conaghan, Hugh.
  • Connolly, Ger.
  • Coughlan, Clement.
  • Cowen, Bernard.
  • Daly, Brendan.
  • Doherty, Seán.
  • Ellis, John.
  • Fahey, Francis.
  • Fahey, Jackie.
  • Faulkner, Pádraig.
  • Filgate, Eddie.
  • Fitzgerald, Gene.
  • Fitzpatrick, Tom.
  • (Dublin South-Central).
  • Fitzsimons, Jim.
  • Flynn, Pádraig.
  • Foley, Denis.
  • French, Seán.
  • Gallagher, Denis.
  • Allen, Lorcan.
  • Andrews, David.
  • Gallagher, Pat Cope.
  • Geoghegan-Quinn, Máire.
  • Gibbons, Jim.
  • Gregory-Independent, Tony.
  • Harney, Mary.
  • Haughey, Charles J.
  • Hilliard, Colm.
  • Hyland, Liam.
  • Keegan, Seán.
  • Kitt, Michael P.
  • Lawlor, Liam.
  • Lenihan, Brian.
  • Leonard, Jimmy.
  • Leyden, Terry.
  • Loughnane, Bill.
  • Lynch, Michael.
  • Lyons, Denis.
  • McCreevy, Charlie.
  • McEllistrim, Tom.
  • MacSharry, Ray.
  • Meaney, Tom.
  • Molloy, Robert.
  • Morley, P.J.
  • Murphy, Ciarán P.
  • Noonan, Michael J.
  • (Limerick West).
  • O'Dea, William G.
  • O'Donoghue, Martin.
  • O'Hanlon, Rory.
  • O'Kennedy, Michael.
  • O'Leary, John.
  • O'Malley, Desmond.
  • Power, Paddy.
  • Reynolds, Albert.
  • Tunney, Jim.
  • Walsh, Joe.
  • Walsh, Seán.
  • Wilson, John P.
  • Woods, Michael.
  • Wyse, Pearse.

Níl

  • Allen, Bernard.
  • Barrett, Seán.
  • Barry, Myra.
  • Barry, Peter.
  • Begley, Michael.
  • Bermingham, Joe.
  • Birmingham, George.
  • Boland, John.
  • Bruton, John.
  • Bruton, Richard.
  • Burke, Liam.
  • Carey, Donal.
  • Cluskey, Frank.
  • Collins, Edward.
  • Conlon, John F.
  • Connaughton, Paul.
  • Cooney, Patrick M.
  • Corr, James.
  • Cosgrave, Liam T.
  • Cosgrave, Michael J.
  • Creed, Donal.
  • Crotty, Kieran.
  • Crowley, Frank.
  • Keating, Michael.
  • Kelly, John.
  • Kemmy, Jim.
  • Kenny, Enda.
  • L'Estrange, Gerry.
  • McGinley, Denis.
  • McMahon, Larry.
  • Manning, Maurice.
  • Markey, Bernard.
  • Mitchell, Gay.
  • Mitchell, Jim.
  • Molony, David.
  • Moynihan, Michael.
  • Naughten, Liam.
  • Nealon, Ted.
  • Noonan, Michael.
  • (Limerick East).
  • O'Brien, William.
  • D'Arcy, Michael.
  • Deasy, Martin A.
  • De Rossa, Proinsias.
  • Desmond, Barry.
  • Desmond, Eileen.
  • Donnellan, John.
  • Dukes, Alan.
  • Enright, Thomas W.
  • Farrelly, John V.
  • Fennell, Nuala.
  • FitzGerald, Alexis.
  • FitzGerald, Garret.
  • Fitzpatrick, Tom.
  • (Cavan-Monaghan).
  • Flaherty, Mary.
  • Flanagan, Oliver J.
  • Fleming, Brian.
  • Gallagher, Paddy.
  • Governey, Des.
  • Harte, Patrick D.
  • Hegarty, Paddy.
  • Hussey, Gemma.
  • Kavanagh, Liam.
  • O'Donnell, Tom.
  • O'Keeffe, Jim.
  • O'Leary, Michael.
  • O'Sullivan, Toddy.
  • O'Toole, Paddy.
  • Owen, Nora.
  • Pattison, Séamus.
  • Quinn, Ruairí.
  • Ryan, John.
  • Shatter, Alan.
  • Sheehan, Patrick J.
  • Skelly, Liam.
  • Sherlock, Joe.
  • Spring, Dick.
  • Taylor, Mervyn.
  • Timmins, Godfrey.
  • Treacy, Seán.
  • Yates, Ivan.
Tellers: Tá, Deputies Ahern and Fitzsimons; Níl, Deputies Barrett (Dún Laoghaire) and Taylor.
Question declared carried.

As there is an equality of votes I am obliged to exercise my casting vote and I feel my casting vote should not be used to defeat the Government and furthermore I am maintaining the status quo by my vote.

Amendment declared lost.

What did Gregory get in the last hour?

(Interruptions.)

Mr. Bruton

I take it we will be following the same procedure in relation to this amendment as was followed in the other.

I am sorry about the misunderstanding.

I appreciate the Chair's ruling in the matter.

I am calling on Deputy Desmond to move his amendment.

When will the House be informed of the latest Gregory deal?

That does not arise now.

Amendment No. 2 not moved.

I move amendment No. 3:

In page 9, line 20, to delete "£2,200", and substitute "£2,400".

The purpose of the amendment is to increase the basic tax exemption for a single person from £2,200 to £2,400. As the Minister is aware, as a result of the exemption which he gave in the March budget a single person earning £2,200 had an existing tax liability of £120 and that was reduced to nil by the Minister in extending the allowance for single and widowed persons from £2,000 to £2,200. We propose to extend the limit to £2,400

At the moment a single person with a total income of £3,000 will have a current tax liability of £237.50 less the marginal PRSI relief given subsequently. We are suggesting that the relief be extended upwards. It means that a person earning around £45 to £47 per week would not be liable to tax. I do not know how many single or widowed persons would be given the exemption. However, we consider it an equitable measure and we ask the Minister to consider sympathetically this request from the Labour Party.

In view of the fact that we have had a very long debate, and in some ways a very exciting and wearing one, perhaps the House would agree to break for one hour at 5.30 p.m.?

Is the House agreeable?

I have no objection to the House adjourning for one hour from 5.30 p.m.

Will the Chair please clarify what amendment we are discussing?

Amendment No. 3.

Ths amendment is extending to single people the same increase in their allowance as was to be extended by the amendment that has just been defeated. It is logical that they should run together. The Minister was not able to give a separate costing but I can understand that. We will support this amendment as we consider it reasonable in the circumstances. It is within the confines of the tax allowance system. As the House is aware, when we were in Government we did something to change the tax allowance system to a more fair credits system. It is the best that can be done to help the lower paid; in this case we are dealing with the single lower paid as distinct from married people about whom we were concerned in the previous amendment.

On a point of order, did I understand from the Chair in reply to Deputy De Rossa that we were dealing with amendment No. 3?

As the House has decided that the words proposed to be deleted stand, where is the sense in continuing to debate any subsequent amendment in that section? If the words proposed to be deleted stand, and that has been so decided, I am somewhat confused as to how we can now be discussing either or a combination of these figures.

They are not the same figures.

There is a difference between line 19 and line 20.

I wonder could I have the matter clarified. If the House has decided to leave the figure of £2,200 stand how can we then talk about changing it to another figure?

How can we propose to change it since a decision has already been taken?

The amendment is to change £2,200. The first one is line 19, £4,400. Now in line 20 it is £2,200.

I understand that but perhaps someone could unravel, for my enlightenment, how if we have allowed by a decision of the House the figure £4,400 to stand we can then talk about changing in another line a figure which is half of the figure, namely, £2,200? It seems to be wrong. I merely seek clarification.

Deputy Blaney found difficulty seemingly in supporting Deputy Desmond's amendment which proposed giving an increased allowance to married people. Perhaps he might in this instance find he has undergone a crisis of conscience and will therefore support an increase in the allowance to single people. We hope he will be able to reach that conclusion and we want to give him the opportunity of doing so.

The same principle runs through all these 24 amendments and I have nothing to add to what I have already said in regard to amendment No. 1. I gave a global reply on the 24 amendments to section 1. I repeat that the increases in general, coupled with increases in personal and secondary allowances, are the most that can be offered to lower paid and aged taxpayers in our present difficult budgetary circumstances. The same principle underlies all 24 amendments and my reply in each case would therefore be similar. That would mean a great deal of repetition and it is not my wish to delay the House. My position on this amendment is the same as it was on amendment No. 1.

Amendment put.
The Committee divided: Tá, 80 80; Níl, 80.

  • Ahern, Bertie.
  • Ahern, Michael.
  • Allen, Lorcan.
  • Andrews, David.
  • Aylward, Liam.
  • Barrett, Michael.
  • Barrett, Sylvester.
  • Bellew, Tom.
  • Blaney, Neil T.
  • Brady, Gerard.
  • (Dublin South-East).
  • Brady, Gerry.
  • (Kildare).
  • Brady, Vincent.
  • Brennan, Matty.
  • Brennan, Ned.
  • Brennan, Seamus.
  • Briscoe, Ben.
  • Browne, Sean.
  • Burke, Raphael P.
  • Byrne, Hugh.
  • Byrne, Seán.
  • Calleary, Seán.
  • Colley, George.
  • Collins, Gerard.
  • Conaghan, Hugh.
  • Connolly, Ger.
  • Coughlan, Clement.
  • Cowen, Bernard.
  • Daly, Brendan.
  • Doherty, Seán.
  • Ellis, John.
  • Fahey, Francis.
  • Fahey, Jackie.
  • Faulkner, Pádraig.
  • Filgate, Eddie.
  • Fitzgerald, Gene.
  • Fitzpatrick, Tom.
  • (Dublin South-Central).
  • Fitzsimons, Jim.
  • Flynn, Pádraig.
  • Foley, Denis.
  • French, Seán.
  • Gallagher, Denis.
  • Gallagher, Pat Cope.
  • Geoghegan-Quinn, Máire.
  • Gibbons, Jim.
  • Gregory-Independent, Tony.
  • Harney, Mary.
  • Haughey, Charles J.
  • Hilliard, Colm.
  • Hyland, Liam.
  • Keegan, Seán.
  • Kitt, Michael P.
  • Lawlor, Liam.
  • Lenihan, Brian.
  • Leonard, Jimmy.
  • Leyden, Terry.
  • Loughnane, Bill.
  • Lynch, Michael.
  • Lyons, Denis.
  • McCreevy, Charlie.
  • McEllistrim, Tom.
  • MacSharry, Ray.
  • Meaney, Tom.
  • Molloy, Robert.
  • Morley, P.J.
  • Murphy, Ciarán P.
  • Noonan, Michael J.
  • (Limerick West).
  • O'Dea, William G.
  • O'Donoghue, Martin.
  • O'Hanlon, Rory.
  • O'Kennedy, Michael.
  • O'Leary, John.
  • O'Malley, Desmond.
  • Power, Paddy.
  • Reynolds, Albert.
  • Tunney, Jim.
  • Walsh, Joe.
  • Walsh, Seán.
  • Wilson, John P.
  • Woods, Michael.
  • Wyse, Pearse.

Níl

  • Allen, Bernard.
  • Barrett, Seán.
  • Barry, Myra.
  • Barry, Peter.
  • Begley, Michael.
  • Bermingham, Joe.
  • Birmingham, George.
  • Boland, John.
  • Bruton, John.
  • Bruton, Richard.
  • Burke, Liam.
  • Carey, Donal.
  • Cluskey, Frank.
  • Collins, Edward.
  • Conlon, John F.
  • Connaughton, Paul.
  • Cooney, Patrick M.
  • Corr, James.
  • Cosgrave, Liam T.
  • Cosgrave, Michael J.
  • Creed, Donal.
  • Crotty, Kieran.
  • Crowley, Frank.
  • D'Arcy, Michael.
  • Deasy, Martin A.
  • De Rossa, Proinsias.
  • Desmond, Barry.
  • Desmond, Eileen.
  • Donnellan, John.
  • Dukes, Alan.
  • Enright, Thomas W.
  • Farrelly, John V.
  • Fennell, Nuala.
  • FitzGerald, Alexis.
  • FitzGerald, Garret.
  • Fitzpatrick, Tom.
  • (Cavan-Monaghan).
  • Flaherty, Mary.
  • Flanagan, Oliver J.
  • Fleming, Brian.
  • Gallagher, Paddy.
  • Governey, Des.
  • Harte, Patrick D.
  • Hegarty, Paddy.
  • Hussey, Gemma.
  • Kavanagh, Liam.
  • Keating, Michael.
  • Kelly, John.
  • Kemmy, Jim.
  • Kenny, Enda.
  • L'Estrange, Gerry.
  • McGinley, Denis.
  • McMahon, Larry.
  • Manning, Maurice.
  • Markey, Bernard.
  • Mitchell, Gay.
  • Mitchell, Jim.
  • Molony, David.
  • Moynihan, Michael.
  • Naughten, Liam.
  • Nealon, Ted.
  • Noonan, Michael.
  • (Limerick East).
  • O'Brien, William.
  • O'Donnell, Tom.
  • O'Keeffe, Jim.
  • O'Leary, Michael.
  • O'Sullivan, Toddy.
  • O'Toole, Paddy.
  • Owen, Nora.
  • Pattison, Séamus.
  • Quinn, Ruairí.
  • Ryan, John.
  • Shatter, Alan.
  • Sheehan, Patrick J.
  • Skelly, Liam.
  • Sherlock, Joe.
  • Spring, Dick.
  • Taylor, Mervyn.
  • Timmins, Godfrey.
  • Treacy, Seán.
  • Yates, Ivan.
Tellers: Tá, Deputies B. Ahern and Fitzsimons; Níl, Deputies Barrett(Dún Laoghaire) and Taylor.
Question declared carried.

As there is an equality of votes, I am obliged to exercise my casting vote in favour of the status quo.

Amendment declared lost.
Amendment No. 4 not moved.

Amendment No. 5.

I move amendment No. 5:

In page 9, line 21, to delete "£5,000", and substitute "£5,400".

I do not propose to delay the House. Again this is a consequential amendment — but has to be treated on a separate basis — increasing the figure from £5,000 to £5,400 on the age general exemption limit. The Minister and Deputies generally are aware of this benefit to a small group of persons in the community on very low income. All the arguments have already been made in relation to the section.

On a point of clarification, since the rest of these amendments, numbered 5-24, relate to the same section, the section of the Bill which imposes different limits for people aged 65, over 75 and so on, would it be possible for us to take them all together, having one composite vote or agreement on them? If we are to continue like this my opinion is that it is ludicrous and somewhat of a joke.

(Cavan-Monaghan): Is the Deputy's blood pressure rising?

Is it possible to reach agreement that we take the rest of them together and have one vote on them or are we to go through the long tedious process of having votes all the evening? I do not think it is in the best interests of the House that we should continue that kind of charade.

I take the point Deputy McCreevy has made. There would have been a great case for the line he is adopting in respect of the last two votes because of the constitutional decision in regard to the treatment of married couples; there is a constitutional necessity that a married couple be treated the same as two single people in terms of their allowances. Had Deputy McCreevy made the point he has now made at that stage there would have been something in it but that does not apply in this instance. This is concerned with older members of the community who get an additional tax allowance. It is an entirely open policy matter on which we can, as a House, have a view, that there should be discrimination of a greater degree, relatively speaking, than exists at present given that the previous amendments have not been passed in favour of older people.

We have made the decisions about the basic allowances and what is at stake now is whether we should give a further additional allowance to older people, which is a new issue from the one we have been discussing up to now. Whereas the Minister made the case that for him £4 million was too much, and that he could not afford the generality of the amendments proposed by the Labour Party, I am quite sure that the cost of this amendment — which is merely extending an allowance to older taxpayers — would be very small indeed.

We are now afforded perhaps a fortuitous opportunity, nonetheless very real, to give something helpful to the older members of our community in terms of an increased tax allowance. I believe we should definitely support this amendment. Having succeeded in the other two votes, albeit by a very narrow and insecure margin, perhaps the Minister could see his way to accepting this amendment. The cost will be minimal and it will be constructively helping the older members of our community in regard to taxation. As the House is aware, there has been a considerable amount of controversy about the fact that old age pensions are liable to income tax. I do not want to get involved in that argument. I can see that if one excludes certain categories of income from——

Might I interrupt the Deputy? We have agreed that the House will adjourn until 6.30 p.m.

Sitting suspended at 5.30 p.m. and resumed at 6.30 p.m.

As I was saying just before we had our well-earned break, there is a lot of agitation because old age pensioners are taxed at all. People feel if they are receiving pensions which have been funded by contributions they made during their lifetime which was out of taxed income, even though they got tax allowances in respect of the contributions, they should not be taxed a second time on the pensions. I am not advocating that case because I believe one has to bear in mind that the more categories of income you exempt altogether from tax the more opportunities you are giving for tax avoidance. Obviously, if you exempted pensions you would have a situation contrived whereby people would be taking huge incomes in the form of pensions once they passed a certain age and not paying any tax at all on those pensions simply on the basis that the pensions per se had been exempted.

I am not advocating that case but I believe we have to recognise that this case has a fair degree of support and that there is a considerable amount of anger among older people because they pay so much tax on their pensions. Deputy Desmond's amendment affords us an opportunity of doing something to help the older people who are paying tax by increasing the exemption for them. I believe it is a very valid amendment. I do not believe it will cause any constitutional difficulties because it does not discriminate between married and single people. The Minister should consider accepting it. I would be interested if the Minister could let us have a costing for this amendment separate from the other amendments because obviously it will not cost £4 million. I imagine it would cost significantly less and it would be useful to have that information.

I would be interested if the Minister could indicate the cost of the particular amendment.

In reply to Deputy B. Desmond and Deputy Bruton in relation to the cost element, as I said at the outset this morning, the computer in the Revenue Commissioners costed all of the two series of amendments proposed and I gave those figures already. I do not have individual breakdowns of the cost. I do not want to repeat myself, I know there has been a distinction made between the first four amendments and amendment No. 5, but already that distinction is recognised when we see the £4,400 coming up to £5,000 for those over 65.

As I said, in reply to the first amendment, which was a general and global reply in relation to the 24 amendments to section 1, these particular areas cannot be looked at in isolation. The purpose of the exercise I undertook on 9 March was to devise, within the existing systems of taxation, the same benefits for the individual taxpayer as were proposed in the 27 January proposals. That included exemption limits, personal allowances, child allowances and tax band charges. Any one part of that overall package cannot be divorced from my main interest in providing, within the existing structures generally, the same benefits for all taxpayers, and that we succeeded in doing. I am sorry that I do not have the cost for which the Deputies have asked. Perhaps on Committee Stage it may be possible for the Revenue Commissioners to get that information for me out of the computer. So far, that has not been the position. If I can get this information at a later stage, I will very gladly give it to the Deputies. For the reasons which I have already mentioned in relation to the other amendments, including the aged taxpayers, the most favourable treatment which can be offered, bearing in mind the difficult budgetary circumstances, have been implemented in the terms of the Bill outlined in section 1 at the moment.

For the sake of illustration, the figure to which we are referring in this instance is the substitution of £5,400 for £5,000, which in itself is a substitution for the figure £4,600 in section 2 (6) (a) of the 1980 Act. This Act, in turn, is referred back to the principal Act, that of 1967, which states: "In a case where the individual would, apart from this section, be entitled to a deduction specified in paragraph (a) of the said section 138 ..................." I would like to determine exactly what figure we are talking about here by reference to section 138 of the original Act. Could the Minister help us in this matter? I understand that this refers to a case of a husband whose tax is assessed for the year of assessment in accordance with the provisions of section 194, or who proves that his wife is not living with him but is fully maintained by him for the year of assessment and that he is not entitled in computing his income for tax purposes of that year to make any deduction in respect of the sums paid by him for the maintenance of his wife. He would get a deduction of £2,230.

Could we establish, by reference to the section concerned, what exactly we are talking about? It is rather unfortunate that the legislation is so framed that to determine what exactly one is referring to, not only must one refer to the Finance Act of 1980 but back from that to the Finance Act of 1967. When we get there, we find that the relevant section of the Finance Act of 1967 does not give us the answer, but refers us back to another section of the 1967 Act, section 194. This concerns an assessment in respect of the income of both spouses.

Are we, in fact, talking about what we think we are talking about? This looks like a reference to people who are separated, rather than a reference to the aged. Perhaps the Minister could clarify the position?

I can understand perfectly why the Deputy asks why we refer at all to this Act. We are referring back to it because it is in section 138 of the Act of 1967 that we referred to married allowances. That is the reason for the reference to this Act at the present time.

So what, in fact, we are talking about here is the married allowance in respect of people over the age of 75?

No, 65, not 75.

So the next reference is to people aged 75 and over?

I was afraid that I had made my case on the wrong basis in the first instance. May I say, without repeating myself unduly, it is a pity that the Minister has not been able to provide the costing of this amendment. This is an amendment which stands on its own feet, independently of the other amendments upon which we have already made a decision. Would the Minister, or those advising him, know approximately how many people are at the moment claiming reduction of their tax on the basis of this section? I would have thought that that figure would be reasonably readily available. The Minister might be able to tell us how many people claimed last year, if the information for this year is not available. That would give us some idea of the order of magnitude of the costing.

The whole thing costs £4 million and it may transpire that somewhere in the region of 10 per cent of all taxpayers come within this section. Assuming that the average income of people over 65 is likely to be less than for those under 65 and, for the sake of argument, that 10 per cent of taxpayers will be involved, one could assume, I would have thought, that the cost of this concession would be in the region of 7 per cent to 8 per cent of the total figure for all the amendments. We are talking now of 7 per cent of £4 million — a very small amount, really. If the Minister has had qualms or trouble about the formula, he should not have much trouble about giving a concession costing such a small amount of money to people over 65. I am surprised that he has not been able to give us this information, but I am not making any unfair criticism either of him or of those advising him. One does not need a computer to give this sort of information. Ministers have been able to do so in the House long before computers were invented.

That is why.

We probably have more public servants in the Department of Finance even though it is not a particularly overstaffed Department, I must say — than we had in the years when they were able to give the information without the aid of computers. We should not be pleading the excuse of the Revenue computer as a basis for not giving reasonable information like this, which would be useful to us in looking at this amendment. In my view, for what it is worth, this amendment would cost somethere in the region of £200,000 to £300,000, that is all — a very small amount of money. Given that it is helping people over 65 and also that there is a concensus in the House that people over 65 need special help as far as tax is concerned — we all agree that they should get a rent allowance which others are not getting — it is not inconsistent, philosophically or fiscally, to grant some special extra tax allowance to the over 65s. Deputies who might have felt constrained to vote for the Government, if the Government decided to oppose this amendment — which I hope they will not — on the grounds of £4 million being too much, I am sure that they could swallow £200,000 to help the old with their tax. That is not too difficult to accept, from either a financial or ethical point of view.

I would ask the Deputies concerned who are, in a sense, determining the affairs of the House at the moment to consider supporting this amendment. Clearly, if the Government accept this, there is no great issue of principle involved or, if the Government are defeated on this amendment, they would not necessarily feel in the same compromised position as if they had failed to carry the earlier amendments. This would cost only a minimal sum of money in respect of people of an age who deserve help. I suggest that the Minister accept the amendment and I ask Deputies who supported the Minister in previous division to support this amendment. It would cost only about £200,000.

I apologise for not having the breakdown or the information I have been asked for. If I were to agree to these exemption limits I would be making allowances for more rich people than poor. The marriage allowance must be double that of the single allowance. That is a reality. It is not entirely a matter of cost. What is being done here involves a combination of income limitation, tax band allowances and to give the same advantage to individual taxpayers vis-à-vis credits versus allowances. As I said in relation to amendment No. 1, the Bill provides for increases of the size expected in respect of single and married and aged people. We cannot do better in existing difficult budgetary circumstances. Therefore, I cannot accept the amendment.

If I can get the additional information requested later in the Committee Stage I will give it to Deputies. As Deputy Bruton said, before the computer age it was possible to get such information. If I can get it I will gladly give it.

I share Deputy Bruton's view on the amendment. Effectively what we are saying to the Minister relates more to the 75 years-plus group than the 65 to 75 group. There are not many of them, but in terms of actual income it has been clearly established that the over 75 years group tend dramatically to have declining incomes, or at best fixed incomes. I do not have precise information of the numbers claiming the age allowance. It would be interesting to know how many people claim the age allowance at ages 65 to 75 years and those of 75 plus. I do not think it would be exaggerating to say that one could reasonably estimate the cost at not more than £400,000. Therefore, the relief we are looking for in the amendment would cost very little. The Minister can say what he likes about his objection to accepting any of these amendments, but when framing the amendments I deliberately kept the cost of accepting them to a very small amount of money. However, it could have a considerable impact on the people concerned, especially those of more than 65 years of age.

I have found information which will indicate the order of magnitude involved. Widows and widowers caught in the tax net are more likely to be older than 65 years. In the 1977-78 tax year there were 183,000 single males and 166,000 females paying tax. There were 72,000 married couples with the wives earning and 247,000 married couples with wives not working. That adds up to a substantial number of taxpayers. There were only 9,000 widowers and 23,000 widows in the tax net out of 702,000 paying tax. That is a very tiny proportion. I am not saying there are many widowers and widows of under 65 years of age. The people concerned in the amendment are a tiny proportion of those paying tax and I think Deputy Desmond's estimate of £400,000 is far too generous.

One can make this case in respect of each of the 24 amendments and the overall picture would be as I have already stated. We have provided an income limit in these cases equal to £100 a week for the over 65s. We cannot look at each amendment in isolation. Deputy Bruton would have to accept that we cannot pick out one of the categories involved and say, "We will do it for that section because it would cost only £X millions". We must always watch the trigger mechanism that operates throughout exemption limits. I do not think anybody can pick out a suggestion like this, or the one contained in the next amendment, and suggest that it should be implemented. However, because of the points that have been raised in the course of the debate and in the absence of the information in regard to cost and numbers — the point was made by both speakers about the age structure of such people — I undertake to examine the matter in the context of any review of exemption limits during the course of the preparation of next years' budget. That is as far as I am prepared to go. I will see if it will be possible to do anything in the preparation of next year's budget.

I am reluctant to press for a division in the absence of precise information. I have been searching through the various Financial Statements presented since 1978 and I still maintain that one is talking about a figure in the region of £300,000 or £400,000. That is tenable and because of that I will press the amendment, to a division if necessary.

Question put: "That the figure proposed to be deleted stand."
The Committee divided: Tá, 80 80; Níl, 80.

  • Ahern, Bertie.
  • Ahern, Michael.
  • Allen, Lorcan.
  • Andrews, David.
  • Aylward, Liam.
  • Barrett, Michael.
  • Barrett, Sylvester.
  • Bellew, Tom.
  • Blaney, Neil T.
  • Brady, Gerard.
  • (Dublin South-East).
  • Brady, Gerry.
  • (Kildare).
  • Brady, Vincent.
  • Brennan, Matty.
  • Brennan, Ned.
  • Brennan, Seamus.
  • Briscoe, Ben.
  • Browne, Sean.
  • Burke, Raphael P.
  • Byrne, Hugh.
  • Byrne, Seán.
  • Gallagher, Pat Cope.
  • Geoghegan-Quinn, Máire.
  • Gibbons, Jim.
  • Gregory-Independent, Tony.
  • Harney, Mary.
  • Haughey, Charles J.
  • Hilliard, Colm.
  • Hyland, Liam.
  • Keegan, Seán.
  • Kitt, Michael P.
  • Lawlor, Liam.
  • Lenihan, Brian.
  • Leonard, Jimmy.
  • Leyden, Terry.
  • Loughnane, Bill.
  • Lynch, Michael.
  • Lyons, Denis.
  • McCreevy, Charlie.
  • McEllistrim, Tom.
  • MacSharry, Ray.
  • Calleary, Seán.
  • Colley, George.
  • Collins, Gerard.
  • Conaghan, Hugh.
  • Connolly, Ger.
  • Coughlan, Clement.
  • Cowen, Bernard.
  • Daly, Brendan.
  • Doherty, Seán.
  • Ellis, John.
  • Fahey, Francis.
  • Fahey, Jackie.
  • Faulkner, Pádraig.
  • Filgate, Eddie.
  • Fitzgerald, Gene.
  • Fitzpatrick, Tom.
  • (Dublin South-Central).
  • Fitzsimons, Jim.
  • Flynn, Pádraig.
  • Foley, Denis.
  • French, Seán.
  • Gallagher, Denis.
  • Meaney, Tom.
  • Molloy, Robert.
  • Morley, P.J.
  • Murphy, Ciarán P.
  • Noonan, Michael J.
  • (Limerick West).
  • O'Dea, William G.
  • O'Donoghue, Martin.
  • O'Hanlon, Rory.
  • O'Kennedy, Michael.
  • O'Leary, John.
  • O'Malley, Desmond.
  • Power, Paddy.
  • Reynolds, Albert.
  • Tunney, Jim.
  • Walsh, Joe.
  • Walsh, Seán.
  • Wilson, John P.
  • Woods, Michael.
  • Wyse, Pearse.

Níl

  • Allen, Bernard.
  • Barrett, Seán.
  • Barry, Myra.
  • Barry, Peter.
  • Begley, Michael.
  • Bermingham, Joe.
  • Birmingham, George.
  • Boland, John.
  • Bruton, John.
  • Bruton, Richard.
  • Burke, Liam.
  • Carey, Donal.
  • Cluskey, Frank.
  • Collins, Edward.
  • Conlon, John F.
  • Connaughton, Paul.
  • Cooney, Patrick M.
  • Corr, James.
  • Cosgrave, Liam T.
  • Cosgrave, Michael J.
  • Creed, Donal.
  • Crotty, Kieran.
  • Crowley, Frank.
  • D'Arcy, Michael.
  • Deasy, Martin A.
  • De Rossa, Proinsias.
  • Desmond, Barry.
  • Desmond, Eileen.
  • Donnellan, John V.
  • Dukes, Alan.
  • Enright, Thomas W.
  • Farrelly, John V.
  • Fennell, Nuala.
  • FitzGerald, Alexis.
  • FitzGerald, Garret.
  • Fitzpatrick, Tom.
  • (Cavan-Monaghan).
  • Flaherty, Mary.
  • Flanagan, Oliver J.
  • Fleming, Brian.
  • Gallagher, Paddy.
  • Governey, Des.
  • Harte, Patrick D.
  • Hegarty, Paddy.
  • Hussey, Gemma.
  • Kavanagh, Liam.
  • Keating, Michael.
  • Kelly, John.
  • Kemmy, Jim.
  • Kenny, Enda.
  • L'Estrange, Gerry.
  • McGinley, Denis.
  • McMahon, Larry.
  • Manning, Maurice.
  • Markey, Bernard.
  • Mitchell, Gay.
  • Mitchell, Jim.
  • Molony, David.
  • Moynihan, Michael.
  • Naughten, Liam.
  • Nealon, Ted.
  • Noonan, Michael.
  • (Limerick East).
  • O'Brien, William.
  • O'Donnell, Tom.
  • O'Keeffe, Jim.
  • O'Leary, Michael.
  • O'Sullivan, Toddy.
  • O'Toole, Paddy.
  • Owen, Nora.
  • Pattison, Séamus.
  • Quinn, Ruairí.
  • Ryan, John.
  • Shatter, Alan.
  • Sheehan, Patrick J.
  • Skelly, Liam.
  • Sherlock, Joe.
  • Spring, Dick.
  • Taylor, Mervyn.
  • Timmins, Godfrey.
  • Treacy, Seán.
  • Yates, Ivan.
Tellers: Tá, Deputies B. Ahern and Fitzsimons; Níl, Deputies Barrett(Dún Laoghaire) and Taylor.
Question declared carried.

As there is an equality of votes I am obliged to exercise my casting vote and, for the reason I have already stated earlier, I am casting it in favour of the question. The overall result is Tá, 81; Níl, 80.

Amendment declared lost.
Amendment No. 6 not moved.

I move amendment No. 7:

In page 9, line 22, to delete "£6,000", and substitute "£6,400".

The Minister will be familiar with the argument in relation to the basic exemption relief for a person aged between 65 years and 75 years. This amendment is to give relief to those over 75 years of age of £6,400. We have already debated the cost and I imagine that in this regard it will be low.

For the reasons I gave in respect of the last amendment I support this one also.

For the reasons I have already given on numerous occasions I will not delay the House. However, I have some information regarding this amendment and the previous one which I will give the House. To take amendment No. 7 first, the number of people over 75 availing of age exemptions is 7,000 of whom 2,500 are married and 4,500 are either single or widowed. The figure in the 65 to 75 age group is 27,500 of whom 14,500 are married and 13,000 are in the single and widowed category. Again, I must apologise for not having the actual cost but if it comes to hand during the course of the debate, I shall give it to the House.

This confirms that my estimates were almost accurate. Having regard to the number of people in the tax net the proportion involved is tiny. For the two amendments the total is 35,000 while the total number of people in the tax net in the year 1977-78 was 702,000. That number is probably similar now, though it may be slightly more. Therefore, in relation to these two amendments we are talking of about 5 per cent of the total number in the tax net. If the cost of all the concessions amounted to £4 million, the cost in the case in question would be in the region of £200,000. That would be in respect of both concessions and given that of the 35,000 who are over 65, only 7,000 are over 75, I would expect the cost of the concession we are talking about here to be in the region of £40,000. That is a very small sum of money. Considering that the Government have decided to buy a castle in Galway for £400,000, what we are talking about here is only one-tenth of the cost of that castle.

But there is something happening in Galway.

That is what the Government are hoping for. This, then, puts in proportion the cost of the concession we are seeking for the over-75 age group. We have heard a lot from the people opposite about responsibility but they can hardly consider this amendment to be irresponsible. Consequently, I look to the Government to accept the amendment.

I have replied already to this question in relation to the previous amendment in so far as those in the 65 to 75 age group and now the over-75 group are concerned. I do not know whether I was understood but I said that in view of the case that has been made by Deputies I would take into account the points raised in respect of these age groups when the January budget is being prepared. That is as far as I am in a position to go at this stage.

We must take that assurance for what it is worth given the double condition that the Minister is only prepared to consider the question and that he may not be introducing a budget in January.

One would not get very much from a bank manager on such conditions.

The assurance is so hedged with conditions as not to be sufficient to satisfy us on this occasion.

Is the amendment withdrawn?

No, but in the light of the unfortunate happening to those in the 65 to 75 age group, I shall not challenge it to a vote.

Question: "That the figure proposed to be deleted stand" put and agreed to.
Amendment No. 8 not moved.

I move amendment No. 9:

In page 9, line 22, to delete "£2,500", and substitute "£2,700".

This amendment does not require any elaboration and I am simply now moving it formally so as not to delay the House.

It is the same situation in this case as that outlined in respect of the other eight amendments.

Question: "That the figure proposed to be deleted stand" put and agreed to.
Amendment No. 10 not moved.

I move amendment No. 11:

In page 9, line 23, to delete "£3,000", and substitute "£3,200".

Again, the situation is the same.

Question: "That the figure proposed to be deleted stand" put and declared carried.
Amendment No. 12 not moved.

I must indicate that amendments Nos. 13 to 24, inclusive, are related to the Table and since it has been decided already that the figures in the section stand, the figures in the Table which embody those in the section cannot be changed.

Amendment Nos. 13 to 24, inclusive, not moved.
Section 1 agreed to.
SECTION 2.

I move amendment No. 25:

In page 10, in column (3) of the Table, opposite the reference to section 141 (child) in column (1), to delete "100" and substitute "150".

Can the Minister say what is the number of taxpayers involved and also what is the cost involved here? As Deputies will be aware, this is a proposal to raise the child tax allowance from £100 to £150 and I am particularly interested in the cost involved.

The cost of this change would be £10 million in 1982 and £16 million in a full year. The reduction in the child tax allowance in respect of income tax from £195 to £100 as announced in the budget is associated with the increases in the social welfare children's allowances and cannot be taken in isolation. For those reasons and bearing in mind what I have said already in relation to section 1, that is, that all of these changes were part of a package designed to give generally the same benefits to the individual taxpayer as was proposed in the January budget, I cannot accept the amendment.

Would Deputy Desmond agree that amendment No. 26 is related and therefore might be taken with No. 25?

I would agree. What is the cost in respect of amendment No. 26?

In this case the cost is £1.2 million in 1982 and £1.8 million in a full year.

What was the overall expenditure in increased children's allowances in 1982?

It is a social welfare problem. All I have is the amount £11.75. I do not have the total cost of the social welfare changes but I shall get it for the Deputy.

I think the Minister should very seriously examine what I regard as the relative social inadequacy of children's allowances in the tax situation. We have failed to pay sufficient attention to this matter. There is a body of authoritative social research which gives the cost of maintenance of a child within the family unit and one is talking about 40 per cent of the adult rate for certain age groups. It is quite exceptionally high. I have no doubt that in the context of our tax structure the tax allowances for children are quite disproportionate as against allowances for single persons and for married persons. The amounts given in tax allowances for children have become regressive over the past two or three years. I say that notwithstanding that children's allowances, which are across the board, by and large have also areas of regression in them because farmers as we well know—there are 150,000 farmers very many of whom are married but the vast bulk of whom pay no income tax — get ordinary children's allowances and do not make a tax contribution. Definitely in my opinion there is a very serious social discrimination against PAYE payers and those generally liable for income tax but who only get at this stage an actual £100 per child. Admittedly, the cost is quite high.

I do not propose to press this amendment to a division but I ask the Minister in the context of next year's budget and of the report of the Commission on Income Taxation — I am rather dubious about what that commission would suggest in regard to children's allowances and this whole area — to have a social study done on this aspect within the Department of Finance. The Department, with their pervasive influence over budget content, with respect to the staff concerned, exert tremendous influence over the Minister. That is not inappropriate, but the Minister should also be a man in his own right prepared to write his own budget speech. Invariably there tends to be reluctance to give relief on the childrens' allowance side. I strongly urge the Minister to examine particularly the social cost of child maintenance within the family, within the single parent family where it is also very high, and within the family with one parent, a widow or widower. I have no doubt that there is an imbalance in our tax structure discriminating against children, a unique imbalance that has come about in the past seven or eight years.

Deputy Bruton when Minister made a brave effort in the context of the family supplement scheme and general turning about of the tax structure to achieve equity, but I think time was too short and the amount of work to be done too great. The end result is that we have now lapsed back into the old personal allowances and tax bands. I am not putting my amendment to a division because amendments Nos. 25 and 26 together involve something in the region of £20 million. I should like to see that money go to large families and families in greatest social need. I am not so sure that my amendment achieves social equity but there is a serious anomaly in connection with children's allowances.

Deputy Richie Ryan when Minister for Finance also made a tremendous effort in this connection when he suggested the clawback in relation to elements of children's allowances which were given indiscriminately to everybody in the community, as is still the situation. We all recall the vilification which Deputy Ryan incurred at that time when he suggested a change in regard to the money given out to the population irrespective of income. That does not happen in any other European country; there is a tax relationship in the money given out. Taking these points into consideration I urge the Minister to examine the situation which is now discriminatory and unjust and lacks basic equity.

I think it can be shown by reference to the records in regard to tax and benefits for families with children that families with children have lost very substantially in benefits and allowances against tax in the last five or six years. Probably a crucial point in the whole matter was the decision which granted a married couple the right to the same allowance as a single person. The Government financed that change at the time largely by failing to increase the benefits for families with children. In our tax structure a married couple with six children proportionately speaking were much better off five or six years ago relative to a married couple with no children than they are now. This is a socially regressive trend, and to a large extent an unconscious trend in our tax policy. I do not think any Minister at any time said: "We are being too generous to large families". They just slipped into the situation because of other decisions that had to be taken at different times. We have ended up with a tax system which in my view is fundamentally unjust to large families.

Speaking from memory, which I think is reasonably accurate, the child benefit in Britain is about three times as generous as it is here even though our old age pension and social benefits are the same or even less than equivalent benefits in Britain. This shows that we are concentrating all the benefits on people who are voters, adults. If you are an adult you get the benefit but no benefits are being given in terms of families with large numbers of children because the additional children have no vote. I think that is what has happened in a sense, that in voting strength large families are a small minority — even though in terms of population they are not a small minority. Progressively, for a number of years past we have been making the situation worse and worse for large families. We have failed to increase child allowances — in fact we have cut them — although my budget and the budget of the present Minister did increase child benefits, and the present Minister's budget increased child benefits fairly substantially, but they are still about one-third the equivalent rate in the UK even though our other social benefits are roughly line ball with those in the UK. I urge that this is very unjust. I do not believe that child tax allowances — which is what this amendment is about — are the best way of giving benefits to large families because they are of most benefit to large families in the 60 per cent tax band and they are of no benefit to large families who are not paying tax. We should aim to have a generous, means-tested child benefit which would go direct to all families on low incomes, regardless of whether their income comes from social welfare or work. At present persons on social welfare get child benefits, which are reasonably generous and which are built into their social welfare allowances, but if the head of such a household goes out to work he ceases to get the child benefit element in his social welfare payment and all he has is a very ungenerous child tax allowance to set against the income he derives from work. Also if he goes out to work he pays tax, whereas if he stays at home on the same income from social benefits he pays no tax at all on it.

We should aim to do away with the child benefit element in social welfare payments and use that money to give it to everyone on a low income whether at work or on social benefit. Probably we should aim to abolish child tax allowances altogether and give the money thereby saved in the form of a means-tested child benefit to the low income families whether they are at work or not, and we should aim to have that benefit at least as generous as the one that obtains in Britain at the moment. This is a reasonable opportunity to put my views forward on this. I do not expect the Minister to comment on them at this stage but I hope we will have another opportunity to discuss these matters.

I would like to ask the Minister to comment on the point in relation to the dependent relative allowance. That allowance was introduced in the 1949 budget by the late Deputy Paddy McGilligan as Minister for Finance. It has remained almost exactly the same since it was introduced. It had hardly been increased at all until I proposed to increase it in my budget of January and now the Minister is increasing it again. Deputy Desmond seeks to increase it further. If this dependent relative allowance had been index-linked since it was introduced in 1949 it would be around £500 or £600 now. Probably when it was introduced it was equal to or not much less than the personal allowance given to the taxpayer himself but it has remained at £95 until very recently, whereas the personal allowance has gone up to about £1,000. We should discuss the reason why this has happened. On the face of it it seems unjust that the allowance to a taxpayer who is keeping an aged relative, his mother, mother-in-law or father-in-law or any other relative who is not able to earn a living, should be treated so ungenerously that the allowance has remained static since 1949, while we have increased enormously all the other allowances.

I am drawing now on advice that I got in the Department of Finance, so I more than suspect that the reason that we have not increased the dependent relative allowance is that it is impossible to police it and to find out whether the dependent relative is really dependent on the taxpayer. A person can put in a claim for his Uncle Mick who might have been dead for ten years and the Revenue Commissioners have no way of finding out whether he is dead or alive. Certainly they have no way of finding out if he is dependent on the taxpayer or has an income of his own. Uncle Mick could be Nephew Mick who succeeded his uncle and the taxpayer could still be claiming for him so long as he is not in the tax net. It seems that we have not increased this provision because we are not sure that we can enforce it adequately, but that is illogical. If we believe that the thing is so wide open to abuse, why should we not do away with it altogether and not waste money on it? Alternatively, we should increase it but police it properly. We should give a reasonable dependent relative allowance but make sure that it is available only to people who are dependent on the taxpayer.

Now that we have a combined PRSI system where everyone has a number whether he is in the tax situation or welfare situation, it should not be too difficult to devise a dependent relative allowance system that would be enforceable, that would ensure that only people really dependent on the taxpayer would get it. I would like to ask the Minister if he has considered this point and if he can suggest if it would be possible — not at this time, not until he is satisfied that he has a method of ensuring that the dependent relative allowance will not be abused and to go any further at this stage would not be a great idea — before next year's budget to re-examine the whole operation of the dependent relative allowance to ensure that we have an allowance that is capable of being policed accurately and given to genuine cases. I would like the Minister to give me his comments on this and to state if he agrees that what I have said is correct about the dependent relative allowance in his experience and, if so, what he would propose to do about it.

I ask the Minister to reflect that if the dependent relative allowance was increased he would save money in other areas where relatives are put into Eastern Health Board and other homes when, if the allowance was more generous more families would be more willing to keep their dependent relatives. On the one hand he might increase the allowance but he might find that he would have a saving in the other area.

Starting at the end of those two comments, largely I cannot disagree with any of the points that have been made with regard to the dependent relative allowance. For the information of the House, 126,000 people are affected by that allowance. What Deputy Bruton said in relation to the administrative and controlling problems and so on is largely true. I cannot disagree too much with what he has said and I will undertake to have examined very carefully the points he has made in the context of seeing how best we can streamline this whole area in relation to dependent relatives.

The last point made is arguable. If you increase the allowances too much people might, just for the benefit of the allowance, take out of institutions people who are not fit to come out. The Deputy rightly made the other point that if the allowance was reasonable many people who are put into institutions would not have been put in in the first case. We have a two-sided argument there. I have taken careful note of the points made and in the context of future reviews in this regard I will see if there is any way that we could streamline this approach.

On the main point, the child allowance, taking the points that Deputy Desmond has raised, it is quite true that we have now reached the situation where we are writing out the child from the tax system and compensating in other ways under the social welfare code. The point he and Deputy Bruton made is that we should have a very close examination of this matter. There is a difference between what Deputy Desmond and what Deputy Bruton said about what should be done. I gathered from Deputy Desmond's approach that, as he proposes in his amendment, there should be an increased child allowance. On the other hand, Deputy Bruton put forward the suggestion he already put forward in his Programme for Government and in his budget statement of 27 January, which was to take away the tax allowance completely and combined it and the children's allowance for some sort of child benefit. There is a bit of a contradiction in what was said by Deputy Bruton and Deputy Desmond.

There is no harm in that.

I am not saying there is or there is not. It shows there are different views and different approaches to this question vis-à-vis the social welfare code, children's allowances, child benefits and the taxation code or a combination of them. I will see if we can make any progress regarding the situation vis-à-vis social welfare and tax allowances. I will look into it very carefully to see if there is any way in which we can streamline that consession.

In the circumstances of the overall package of measures to which I referred on previous amendments, I have to oppose this. Deputy Desmond said he will not press it. We are talking about £18 million and £20 million in a full year which is a sizeable amount of money. I have taken careful note of the points made about dependent relative and child allowances. I undertake to have them carefully examined. I am much more confident than Deputy Bruton may be that I will be introducing the January budget and I hope that in some way I may be able to include some of the points made by both Deputies.

In this instance it does not seem to be relevant which of us will be introducing the budget. We seem to be pretty much in agreement on what should be done. Might I make a further suggestion to the Minister in elaboration of what I have already said? In respect of the dependent relative, probably the best thing we could do would be to introduce, if possible, a dependent relative tax credit. If you have a dependent relative allowance it has the effect that it tends to give a disproportionately large benefit to somebody who has most of his income on the 60p rate. If in the course of changing it into something which could be capable of being properly policed we could introduce it as a credit, it would be of equal benefit to all taxpayers. That might be the best course of action to adopt.

I will be interested to see what the Commission on Taxation will have to say about it. I hope they will not suggest that the dependent relative allowance should be abolished because it is too inconvenient to find a system which works. That might be the temptation they would have. It was introduced for a legitimate reason in 1949 and it has been our successive failure to make it capable of working properly. The fact that it has not worked properly in the past derives from the fact that we did not make an effort to make it work properly. We should try now, and a tax credit would probably be the best outcome to have in the January budget.

We will have a look at that point as well. We are all anxious to secure a system which has greater equity. That is why the Commission on Taxation were set up two years ago. I understand that on 5 July or 7 July the commission will present me with a report. I will deal with it immediately and present it to the Government, and the Government will express their view on it.

Will it be published?

That will be a matter for the Government. The commission were set up to enable us to have more equity within the system. When we consider all the various exemption limits, and allowances, and dependent relative allowances and child allowances, and so on, we realise that we have sought to assist those areas under the taxation code or the social welfare code. Whether the allowances will go up at a given time or come down depends on the finances among other things. Perhaps there is a different approach towards helping these sections of the community. I hope the commission have directed their attention to it and will give us some guidance on what decisions might be taken in the future.

Is the amendment withdrawn?

Question: "That the figures proposed to be deleted stand" put and declared carried.
Amendment No. 26 not moved.
Section 2 agreed to.
SECTION 3.

Amendment No. 28 is related to amendment No. 27 and we are taking both together for debate.

I move amendment No. 27:

In page 11, Part I of the Table, to delete "£3,000" and substitute "£4,500".

If carried, this amendment would have the effect of restoring the tax bands to what they were in the last tax year. This is not a proposal to restructure the entire tax system. I am not under the illusion that I am introducing a budget. The Fianna Fáil budget proposal set out in the Finance Bill aims to reduce the 35 per cent tax band by one-third, from £4,500 to £3,000 for single people and from £9,000 to £6,000 for married couples. Even without inflation this would mean an increase in tax for many workers. Combined with inflation it represents a plan for a massive increase in the PAYE yield both as a proportion of workers' pay and as a proportion of total taxation. As a result huge numbers of workers will find themselves pushed into higher tax bands with many paying 60 per cent by the end of the tax year.

I pointed this out in my statement on budget day when, sadly, some of the other socialist Deputies, in The Workers' Party notably, were welcoming this budget as reasonable, well-balanced and a tremendous improvement and benefit. Indeed, they could find no fault whatsoever with it. I have been glad to notice that recently The Workers' Party have had second thoughts on the matter and I hope they will now reverse their vote of 25 March last and vote for this amendment to oppose this massive imposition on PAYE workers.

With this single but significant exception, I must say Deputy Desmond's new financial proposals represent a considerable improvement on those he supported in January. I would give my support to most of them. I reject Deputy Desmond's suggestion that only the very well-off would benefit from my proposal. A single man or woman on £6,362 in 1982-83 will pay 45 per cent tax, that is on £122 or so per week which is more than £20 below the average industrial wage. If a person earns £8,362 over the year to next April, that is, about £160 a week, he or she will pay 55 per cent tax plus 7.5 per cent PRSI. In other words, on any extra pound some of these people could be paying more than 60 per cent tax all told, more than the richest people in the country.

A single person earning £10,362, or under £200 a week, will pay 60 per cent tax at the top rate. By the end of this year, with inflation and the cost of living rising rapidly, these kind of earnings could hardly be described as princely. Similarly a married couple with only one earner bringing in about £12,000 over the course of the tax year may be better off than many but could not be said to be rich in a country with no wealth tax, a small tax on big farmers, and very low capital and profits tax. Should they be asked to bear the penal burden of hitting the very highest tax rates? Young workers who are paid well below the average industrial wage will now find themselves paying £52.5 per cent of every extra £1 between PAYE and PRSI, making it difficult for them to marry and set up home. I can hardly believe the Labour Party and The Workers' Party want this kind of situation.

In view of the fact that Fine Gael and Labour opposed the Fianna Fáil proposal on budget day, 25 March, and then proposed an amendment to increase the lower tax bands again I must express my disappointment at their attitude since that date. Deputy Michael Noonan of my own constituency, Limerick East, made a strong statement on that day protesting that the budget produced a situation whereby people on extraordinarily low levels of income would be moving into very high tax bands. Today, however, he apparently finds this acceptable. Deputy Bruton described the amendment on 25 March, quite similar to the one I am proposing today, as designed to help the lower paid. I hope to hear something from Deputy Bruton today on that score. While I would prefer a system of tax credits as a more flexible and fairer system of taxation, my amendment nevertheless does benefit the lower paid and should be supported by all Members of this House who believe in genuine tax reform.

As Deputy Kemmy quoted my statement after the Minister's statement on the budget I feel it is desirable for me to comment at this time. When I made that statement I meant what I said. I did say that it was reasonable because we have now seen the contentious issues removed from the budget that was supported by Deputy Kemmy on January 27.

I did not support it. I voted against it.

That was the issue and the fact is that we saw that these very contentious issues were removed from that budget and then I said it was reasonable.

But let us come to the issue now before us. I want to refer to the increases in the personal allowance to the various categories. From 1981-82 a single person's allowance was £1,115 and that goes up to £1,450; for a married couple it was £2,230 and goes to £2,290. I would not take that line because broadening the tax bands took away whatever was granted in those increased allowances. Suffice it to say that in any consideration one gives one must have regard to the category of people at this time who would benefit from the amendment as proposed. I do not think that Deputy Kemmy is entirely right when he refers to the people in the lower tax bands benefiting from the amendment if it were implemented. First and foremost it is estimated that the proposal would cost about £50 million. This is a very substantial amount of money and there has been no indication of how that money would be got. Deputy Kemmy mentioned the resource tax amendment which would raise about £7 million. In any case, it is not money that would be well spent in so far as it hands out substantial benefits to taxpayers in the higher income groups. For example, a married couple earning about £19,000 a year would benefit by £20 a week from this measure but it would not mean anything to a married taxpayer with less than £11,500 a year, especially if he is not claiming interest relief on a mortgage. For those earning interest relief it will mean nothing for those with incomes up to £16,000. Like the PRSI allowance the biggest benefit goes to those on the highest income; the more income the more the State foregoes tax revenue. This is not the correct approach to the matter. Of course we have nothing against increasing the exemption limit or retaining the tax bands but if that revenue is to be recouped there has to be reference to the people in the higher tax brackets and those people are the people who will benefit if the amendment as proposed were implemented.

I will only be a moment. I just wanted to say that it is quite obvious, when one studies the figures, that the order of the reliefs is such that the people on the smaller incomes achieve a proportionately higher reduction in the amount of tax which they pay. Surely this is the direction in which we have to try to move if we are to achieve a certain amount of tax equity which we are all trying to achieve. For example, on income tax payable under PAYE on earnings of a married couple with three children a person on £7,000 would save about £120 a year in income tax. Let us move up the scale to people on £15,000 who would pay an extra £125 a year in income tax. Between £7,000 and £15,000 the scale tips the other way. The people on £7,000 have a saving and the people on £15,000 pay more. So the bands as they stand in the Bill are quite sensible. If they were the other way around it would be quite a serious situation.

Again, if one takes mortgages into account which most people here have to pay one finds the same thing. A single person paying mortgage interest of about £2,000 per annum and earning £8,000 would pay an extra £90 or so in taxation under the present schedule which is not that great. A person on £20,000 pays the best part of an extra £600, taking the mortgage relief into account. While we could all write our own budget and put in our own figures and argue those figures the main thing that we have to be satisfied on as legislators is that the direction is the correct direction. We can argue about the detail of that direction, but I am satisfied from these rates that the less well off gain more proportionately than the better off. After that the only argument left is whether or not one has to raise any income tax. As I said on Second Stage, the options are very limited. If one raises taxation one increases the borrowing or one contains public expenditure. There is very little scope left for increasing taxation. There is virtually no scope left for increased borrowing. We will have to do what we can in the area of controlling and getting better value for State expenditure. I am satisfied that under this schedule the drift is quite correct. If we were to adopt the amendment it could tip the scale not to the less well off which I know is the aim of the amendment but it would certainly tip the scale towards the better off because one would be widening the band to give them extra relief. I do not think that is the direction we should go if we are to achieve tax equity.

I know this has been a rather long and strenuous day for Deputy Sherlock but he must be in a desperate state of mental confusion when he accuses me of voting in favour of the January budget. He is very wrong and I hope he will withdraw that allegation because the world and Garrett Reilly know my vote on that occasion.

I have heard the figures quoted against my amendment by Deputy Brennan and Deputy Sherlock and perhaps there is some truth in the statement made by Deputy Brennan about widening the tax bands. I pointed out that the PAYE system is not flexible and I would prefer the tax credits which would give us the opportunity to do what I would like. Nevertheless I will not have my figures disputed because they were carefully researched and analysed and will bear scrutiny by anybody. I have no intention of amending them.

I have the greatest regard for a fellow socialist in the finest tradition, Deputy Kemmy, because his intentions are invariably not just well-intended but are the product of long years of experience in public life. He should be in the Labour Party because we share so many views.

I have not the slightest doubt that when he tabled his amendment he intended providing substantial tax reliefs across the board to those in greatest need. He said those earning above £6,362 would benefit. I share his view but there is a problem. The average weekly earning of an industrial worker in transportable goods industries is £148 gross. Under Deputy Kemmy's amendment, he does not gain one penny. It was argued that he might get something on £120, but it would not be of any great consequence. I estimate that this would cost about £52 million and all that would go to the top 22 per cent of taxpayers. Even examining the Revenue Commissioners' Report of December 1979, and looking at the total range of incomes, in terms of distribution of incomes, there is not much doubt that the relief proposed by Deputy Kemmy would not be substantial.

I have been subjected to a great deal of almost personal abuse because of my attitude to taxation. I believe we should pay our taxes, and that we cannot abolish income taxation or PRSI. It is important to point out that under the existing Finance Bill a married couple earning £7,000 a year, which is below the average earnings of a PAYE worker, pays £1,000 taxes or 14.64 per cent of total income. We want an equitable tax system and I believe we can bring about such a system, but I do not believe there can be massive general reductions in overall income taxation. I believe that a very equitable PRSI system can be introduced. The current system is chaotic, unfair and unjust, particularly for workers earning less than £9,500. I do not believe one should pick figures out of the air and apply them across the board.

There is a great deal of propaganda going around about taxation. One would swear the whole country was paying 45 per cent to 55 per cent income tax. It is important to point out that under this Bill a married PAYE worker with PRSI allowance does not become liable to income tax at the rate of 45 per cent until his income is £11,800 a year. It must be remembered that the media people sometimes pick this up because they earn above the average worker's earnings, as do politicians. There are very few people in this country actually earning——

The Deputy is tempting interventions from the Press Gallery.

The Deputy is going against his usual angle——

Some people say that a person earning £10,000 or £12,000 is crucified on the 45 per cent rate. The short answer is that there are not that many people earning that amount of money. The average factory worker earns £148 a week gross, including overtime, shift allowances and week-end working, and the average take home pay is about £7,500. Dublin Corporation workers got an increase of £7.50 a week sanctioned by the Labour Court, which brought the basic rate up to £132 a week. If the average local authority worker gets another £10 or £15 a week, his wage will be only £148 a week. It is very important that all the people in the middle income group, those working in the media and politicians, who talk about people paying 55 per cent tax should appreciate that a married worker with a PRSI allowance does not become liable for income tax at the rate of 45 per cent until his income reaches £11,812. If he has additional allowances for mortgage interest, medical expenses, life assurance, he would not reach the 45 per cent rate until his income is well in excess of that figure — he might have another £1,000 to claim and that means he might have to earn about £12,700 before he pays the 45 per cent rate.

There is a great deal of propaganda going around about income tax and PRSI. About £1,600 million is collected in income taxation, of which the PAYE workers pay about £1,400 million. The system is wrong, in terms of inequity and discrimination, to the tune of about £300 million or £400 million. The system should be broadened. I tend to part company with other Opposition Deputies here because I think the farming community should be paying an extra £60 million or £70 million in income taxation, the capital gains side should be increased by another £60 million or £70 million, and there should be a property tax. What has happened is that a very large number of people have salted away substantial amounts of money in commercial banks under the £70 interest exemption and they used that money to buy property in the £70,000 and £80,000 bracket.

The Deputy seems to be taking pleasure from the fact that he knows he is out of order.

I am not that much out of order because as Deputy Kemmy correctly pointed out he is chasing tax equity, but we must chase it in the right direction. If I had £52 million to hand out today to support Deputy Kemmy's amendment, I could not do it because this will benefit the top 25 per cent of taxpayers. If I had that £52 million, there are many areas in which I would spend it —on large families, the elderly and those in greatest need. I would say to Deputy Kemmy not to force a division on this. Report Stage has yet to come. He has raised the general question of bands and he is quite free to table other amendments. He would not necessarily get our support at that stage but my view is that we should consider the whole matter. In the 14 years I have been in Dáil Éireann this is the first time the Dáil has discussed a Finance Bill in depth. The tragedy is that we have not had a committee of the Dáil to deal with taxation. As a result, an enormous amount of political mythology and waffle about taxation——

The mythology and the waffle are not pertinent to the amendment.

I agree with Deputy Kemmy where he pointed out that it would be far better if we could discuss this type of proposal in the context of tax credits. As long as Deputy Kemmy is forced, by the abandonment of the Government of tax credits, into a situation of trying to seek relief in the tax code on the basis of extending bands that are on top of allowances it is inevitable that disproportionate benefit will be given to the better off. This is an inevitable consequence of the fact that our system remains an allowance system. I am glad the Deputy has expressed so clearly his support for the idea of tax credits. If we could move towards tax credits we would be able to consider this kind of system.

The problem for taxpayers this year is to some extent a problem of perception. The Government were trying to imitate our tax credit proposals while still retaining allowances. That meant that artificially and in a very misunderstood way, so far as the taxpayers were concerned, they had to reduce the 35p band dramatically. If that had been done in the context of tax credits, even though many people would not be any better off in the end, there would not have been any rebellion because it would have been in the context of a reformed tax system based on credits and people at the bottom of the scale would come out better off with family income supplements. However, as long as the Government try to imitate tax credits while still using allowances there will be many strange results such as the dramatically reduced 35p tax band.

Because implementation of Deputy Kemmy's amendment would cost a substantial sum I do not think it can be contemplated at this time. However, I sympathise with him in trying to achieve greater equity in the tax code. While I find difficulty with his amendment I see myself in agreement with him on the need to move towards a system of tax credits. I hope that between us we will be able to create an opportunity in not too distant future to introduce tax credits.

On the last point made by Deputy Bruton, extending the tax bands gives greater benefits to the higher paid under any system, whether tax credits or allowances. There has been a discussion on tax equity in relation to the amendments. If the amendment was carried it would cost £53 million in 1982 and £82 million in a full year. People in the 35 per cent band would not receive any benefit; those in the 45 per cent band would have a benefit of up to £200 per annum; those in the 55 per cent band a benefit of up to £500 per annum and those in the 60 per cent band would have a benefit up to £700 per annum. I do not know how anyone can see equity in that.

Here is an example — we have had many such examples during the day, although they were relatively minor in comparison — of political opportunism and of misreading deliberately what was done. It has been described by Deputy Bruton as being artificial. There was nothing artificial about it. It was open, above-board and was explained quite clearly.

I did not say it was a secret.

The Deputy said it was artificial but there was nothing artificial about it. Here is an example of political opportunism. As Deputy Bruton pointed out, there would not have been the same reaction if what is being proposed was done by tax credits rather than by narrowing the bands. The fact is that at the end of the day what matters for taxpayers — and I include myself — is the amount they have to pay and they are not too concerned about the mechanism used.

The proposals introduced by me were presented as a package of measures, the rate bands, exemption limits, personal allowances and child allowances. As I said on many occasions, the package was introduced to give the same benefit to the individual taxpayer as was done under the proposals of January. Amendments Nos. 27 and 28 in the name of Deputy Kemmy cannot be regarded as serious in their attempt to help the taxpayers or to give any equity in the tax system. Neither do the amendments take any account of Exchequer finances. If anyone studies my proposals they will see that the individual taxpayer will get the same benefits as were proposed under the tax credit system in January.

I oppose both amendments.

Deputy Desmond made the point that very few people have £200 a week. That could well be so and, if it is so, it is an indictment of our economic structure and a reflection on our society. On £200 a week today one would not live like a Farouk. Even if some few people are earning £200 a week there is an element of contradiction because you cannot complain on the other hand about 100 people gaining by my amendment. The picture painted by the media of a great number of workers groaning under the yoke of PAYE is not wrong because the tax marches and the reaction of people generally have shown that this is no illusion. We have a number of lower paid workers and that is all the more reason for some genuine and drastic tax relief. My amendment is designed to spread the tax load more equitably.

Deputy Bruton's point that the PAYE system is a crude system is correct. PAYE is designed to take money from the workers every week but it does not respond in the same way in giving rebates and refunds. There is no flexibility in it. I fully support what Deputy Bruton said. On the occasion of the March budget Deputy Bruton moved along the same line as I do and I regret that he cannot support my amendment tonight. The Minister says he is objecting and he gives some examples but he did not advert to how my amendment would work. He took the worst possible examples and I hope to check his figures later on to see if they are accurate. He took aspects of the amendment which are not favourable. He ignored the favourable aspects. My amendment is designed primarily to redress some of the imbalances in our taxation system and I make no apology to anyone for doing that.

We are being treated here to gross hypocrisy. It almost borders on the obscene. The proposal is to add £53 million to the budget this year and £82 million in a full year. The Deputy is totally irresponsible in tabling this amendment. Not only that but he has the gall to query the veracity of the figures given by the Minister with regard to the effect his amendment would have. The figures given by the Minister show that of those in the 35 per cent tax band the figure is nil and in the 45 per cent tax band it would be up to £200. In the 55 per cent tax band it would be £200 to £500 and in the 60 per cent £500 to £750. Does this really come from a Deputy who purports to represent the less well-off sections, who purports to support a party whose claim is at all times, though they voted consistently today in a different direction, that their ambition is to keep down Government expenditure and support cutbacks in the public sector? Today they have voted consistently for the addition of extra taxation by their demands here.

Deputy Kemmy spoke of political parameters and the political philosophy of Deputy Bruton. They seemed to share the same philosophy and political parameters on a surprising number of occasions today. I am surprised the Deputy has done so little homework in the preparation of his amendment. We have discussed several amendments today and the one thing that can be said about them all is that their proposers did their homework. That can at least be said for them. On this amendment, however, the Deputy comes in here in an utterly irresponsible manner and proposes the addition of an extra £53 million this year.

What about the £100 million Fianna Fáil promised to Dublin West?

(Interruptions.)

The Minister without interruption.

The Deputy won the seat because of the PR system and he should be very grateful to those who transferred their votes to him. Fine Gael's voting last night on the Estimate for the Gaeltacht, an Estimate which they introduced, and their voting today, despite all their protestations about trying to reduce the budget deficit, can only be described as a mealy-mouthed approach by Deputy Bruton to Deputy Kemmy's amendment: "Well, Deputy Jim, we want to be with you but we cannot be with you because even our neck would not stretch as far as £53 million despite the fact that we have been stretching our neck all day". Remembering the support Deputy Kemmy has given Fine Gael he should get the support of Fine Gael now. He has gone with Fine Gael all along the line. He has voted with them and he is entitled to expect Fine Gael to vote with him this evening. They have ridden roughshod over every other principle. They rode roughshod last night in voting against an Estimate they themselves introduced here last January. The Deputy is entitled to their support. His amendment is, as I said, totally irresponsible but Fine Gael have been irresponsible all day and the Deputy is entitled now to their support in his irresponsibility.

This is the most convoluted language I have ever heard.

The Minister uses emotive language. A charge of irresponsibility is a serious charge. I have been in politics just as long as the Minister and he should remember that people living in glasshouses should be careful about throwing stones, especially if they are in their bare feet.

(Interruptions.)

The Minister shows the spleen there is against me in a way which is both immature and childish. I would expect better from the Minister. He says my amendment would cost £53 million. It equates very well with the concession given by his Government in recent weeks. I refer to the £45 million. It was given by the stroke of a pen. I can tell the House where it did not go. It did not go to the lower paid worker. The £45 million went almost entirely to higher paid workers. There have been other schemes also which were totally irresponsible — Knock Airport, for example.

I get the impression that Deputy Burke is annoyed with Deputy Kemmy.

Deputy Bruton is not supporting Deputy Kemmy as he ought to be.

We seem to have wandered from the subject we were dealing with. I do not think Deputy Kemmy is aware of the financial implications as far as the Exchequer is concerned. Deputy Desmond is fully aware of the situation and he knows that to make that concession for this year would cost £53 million approximately. It would be nice for me and also for Deputy Bruton — it would give him more into his pocket — and possibly is would be very good for some members of the Press Gallery——

(Interruptions.)

It is true what Deputy Desmond said. A married couple earning up to £11,800 can claim benefits such as VHI, tax relief on mortgages and many other concessions. If a farmer has a valuation between £20 and £40 his allowances are halved. If he has other employment that is also taken into consideration and he will have to produce approved, audited accounts. If farmers over £40 valuation make extra money they will be liable for income tax under the Act. There is a feeling in certain quarters that farmers are paying very little or no tax, but over the years there has been a substantial increase in what they pay. In 1975 £1.1 million was collected and the following year it increased to £3 million. In 1981 they paid £20 million and this year it is estimated they will pay £22.2 million. Deputy Desmond may not be aware of this as he represents an urban constituency. Some of the media have been saying of late that the farmers are getting off more lightly than others in regard to payment of taxation. Farmers have the usual allowances and this was the case when the previous Government were in office. I am not making a case for the farming community but the number of farmers involved in paying tax is about 43,000, which is an increase on last year of approximately 1,800.

What Deputy Connolly is saying is not relevant.

Deputy Desmond mentioned the farming community and, as a rural Deputy, I could not let the point go in case it went out from this House that the farmers were not paying anything at all and did not want to pay anything. I am fed up with that and it is not fair. Nobody wants to pay income tax. Even Members of the House want to pay as little as they possibly can. Deputy Kemmy mentioned the £45 million which was given in tax relief recently. Is the Deputy opposed to that relief? He seems to have some reservations about it.

I asked a question about where the money went.

Yes, he asked a question but he also expressed reservations about it. The Minister explained in great detail earlier that there was now an inquiry into expenditure and where savings could be made. He stated also that, if additional taxation had to be raised, that would be done. It is all very fine for Deputy Kemmy to say he has reservations in regard to the £45 million but he must take into account that it benefited a great many taxpayers throughout the country. If we were to insert a means clause into the taxation system it would create difficulties from an administrative point of view. The media said that the concession of £45 million was too generous and that we should not have made it.

Deputy Bruton had great sympathy for Deputy Kemmy and I know why. I could not agree with the case Deputy Bruton put forward. I would go as far as to say he is treble faced. Deputy Bruton has not been honest and he has been trying to play it both ways.

Surely that does not surprise the Minister?

No, it does not surprise me and I wanted to get that across because he is a man who had done a lot of twisting and turning over the last few months and speaking ex cathedra as usual. He thinks he is infallible.

Would the Minister please get back to amendment No. 27?

Mr. Bruton

I seem to have got under everybody's skin. I do not mind annoying Deputy Burke but I hate to annoy Deputy Connolly.

The Deputy did not annoy me and I know he liked the little bit about the farmers because his heart lies there.

It is like the Yorick scene in Hamlet.

If the concessions here were agreed to, people in the upper income bracket would benefit. We cannot have it both ways. Deputy FitzGerald, the Fine Gael leader, is always asking where we got the millions to do this, that and the other. Then his colleague, Deputy J. Bruton comes in and says, "Oh, we should give a concession here". I was asked at Question Time why I had not given a concession in respect of various other items. I was honest, I said I had not the money. That is the situation.

The Deputy is awarding himself a medal now.

How does one give £53 million while one talks about deficits, borrowing and so on? If we are to keep our finances in line then certainly we would not be able to do it within the conditions of the amendment put down by Deputy Kemmy. I cannot see its justification. I do not think the Deputy was briefed too well on this. I say that with all due respect to Deputy Kemmy. He was not well briefed. Possibly the briefing he received was from persons who were in that high bracket of money, people who may have said, "Well, it will suit us fine as well and put a gloss on it". I want to bring the Deputy down to the fine issue involved here, which is that this money has to be found, £53 million up to the end of the year and £82 million next year. That is the situation in regard to this. I must agree with my Minister here that there is no way we could agree to that.

This rumpus on the part of the Minister of State, Deputy Connolly, is very entertaining but his logic is far from being impeccable.

The same as the Deputy's.

I merely responded to the question posed by his boss, Deputy Raphael Burke, in relation to the £45 million which equated with my sum in this amendment, of £50 million. I said that his £45 million had gone largely to the higher paid. Neither of the two Ministers has refuted that charge. When they do, I will have some respect for them. In addition, I pointed out that my amendment is designed primarily to reform the imbalance in the tax code. Some of the areas mentioned constitute the worst aspects of it. I accept that because it is a crude method by which to redistribute taxation. By and large it will not have the effect alleged by the two Ministers.

About my being briefed, well, Deputy Connolly is obviously the most briefed man here judging by all the reading he does at Question Time. Indeed, the less said about that the better. Sometimes some of the reading engaged in, such as that in relation to a question I asked him yesterday about a road, let him off the hook. He did not know what he was reading; he was like a parrot. I would say that perhaps his own briefing could be examined somewhat more intently.

The Deputy got bogged down as well.

As far as I am concerned we should deal with facts in this House, not with this sound and fury signifying nothing.

It has been said that perhaps Deputy Kemmy is not too well briefed. I think that charge is quite correct in regard to this amendment, that he is indeed not too well briefed when he asks a question as to where the PRSI concessions went. It has been pointed out to him many times already in the course of the discussion on this amendment that the effects would be greatest for those in the £11,000 to £14,000 gross earnings bracket. If the Deputy took even a cursory glance at the PRSI regulations he would discover that the additional allowance applied to people on incomes up to the £9,500 bracket. If he wants clarification as to where the bulk of the concession on PRSI went, if he looks up the regulations he will discover it. As has been said, he should brief himself a little better.

That is not true.

It is indeed true.

The maximum benefit goes to those with maximum incomes.

The facts of the system — and Deputy Bruton should know better——

In view of his antics when his budget failed to get through the House I am not surprised that he does not, because it would not be the first thing he did not know.

The Deputy is back on that again.

The Deputy has been playing an old tune over there all day, we can play a tune here and put a few unpalatable facts——

If they were facts——

They are facts. The PRSI benefits apply to those up to £9,500 who pay the full PRSI rate. We should have a little bit of honesty in the House in relation to amendments. Deputies over there can sigh all they like but we should have a little bit of honesty in the House in relation to amendments.

We should have a great deal of honesty, not a little but of honesty.

Holier than thou.

The interruptions put me off my track somewhat so I must wait until we have a little bit of silence when I will direct my attentions to Deputy Kemmy's amendment and his remarks on it. I know that Deputies opposite do not want to accept the truth of the arguments being put forward here but they do represent the truth. Deputy Kemmy's amendment is aimed at benefiting those in the best positions, those with the highest incomes. The PRSI benefit at least was directed at those within a certain defined category which did not come within an ass's roar of the categories Deputy Kemmy wants to benefit.

I should like to say a few words on this amendment. I spoke earlier today regarding section 1 and the various amendments. What I said then holds equally with regard to these amendments. Regarding the increase in the taxation bands or tax free allowances I should say that while the present income tax code and tax free allowances obtain they are always going to benefit people with the greater incomes. The scheme announced by Deputy John Bruton in regard to income tax credits has a lot to recommend it. I have no hang-ups about the present system of tax-free allowances. I see everything to recommend the idea of tax credits. They are not included in this Finance Bill. Personally I have no hang-ups about it. It is a system that might well be looked at and I would have no objection to its inclusion in a subsequent Finance Bill because I found a lot I could agree with in regard to the tax credit system.

In regard to the amendment put forward by Deputy Kemmy, from an ideological viewpoint I can well understand why the Deputy put forward his point of view as to why this tax band should be increased or at least remain at its existing level. Also, viewing the current budget deficit, the present state of the economy and the problems confronting us I am sure Deputy Kemmy will appreciate my viewpoint. I know Deputy Kemmy sincerely holds the view that the lower income classes should benefit from the taxation system most. But from my viewpoint at least a different view must be taken of that. As I said earlier today it is easy to put forward the idea of taxation relief. I do not blame Deputy Kemmy, The Workers' Party, Fine Gael or Labour for putting forward those viewpoints because the history of our system has been that if one gives concessions then one benefits at the polls.

I think it was Deputy B. Desmond who raised the question of the pay-related social scheme in respect of which we had given a concession of some £45 million. Lest anybody have any doubts I should say I am not in agreement with that viewpoint, that one should give in, under electoral pressure whether it be in respect of a general election or a by-election, irrespective of the merits of that case. I would not like anyone to be under any illusion that Deputy Charlie McCreevy changed his viewpoint on that. I do not believe it is in the interests of democracy to have the view that when an election is to take place, whether it is a general election or a bye-election, it is the easiest thing in the world to agree to that type of pressure.

Could the Deputy come back to the amendment?

I am coming back to it now. I agree with Deputy Kemmy when he wants to increase the taxation band to give more relief to people so that they will have to pay less tax. If we encourage that viewpoint we should go ahead and explain this. Deputy Kemmy or any other Deputy in the House is free to put forward his viewpoint to give more relief. The same argument that I used in regard to the relief in section I of the Bill applies to this. If we are to agree to the increases in the bands it will cost the State money and I do not think that is the right thing to do at the present time. I believe the amendment put forward by Deputy Kemmy will have that effect. I understand from his viewpoint why he is putting it forward but from the overall point of view I hold I believe we should reject it.

Question: "That the figure proposed to be deleted stand" put and declared carried.

Is there the same requirement for this as there was last week in relation to those who support my viewpoint?

Is the Deputy calling for a vote?

Will the Deputies who are in favour of the amendment and who are calling a division, please rise in their places?

Deputy Kemmy rose.

As there are fewer than ten Members standing, I declare the amendment lost, but the name of that Member will be entered in the Journal of the Proceedings of Dáil Éireann.

Amendment No. 28 not moved.

I move amendment No. 29:

In page 11, between lines 12 and 13, to insert a new subsection as follows:

"(2) Notwithstanding anything in the Tax Acts, Part II of the Table to section 8 of the Finance Act, 1980 (inserted by this section) shall apply to persons with dependants who are widows, widowers or single parents.".

The purpose of this amendment is to provide the same tax relief for single parent families including widows and widowers with dependants as for married persons, particularly those who are struggling on low pay. It is just as difficult, possibly more difficult, for those families to survive on their incomes as for married persons. This is particularly true of single parents, especially in the case of a deserted husband or male single parent who is not in receipt of the deserted spouse allowance.

On a point of order, I just cannot hear what the Deputy is saying.

Could we have a little quiet, please? Could we have the sound checked, please?

The sound is all right. It is the voice of the Deputy which we cannot hear.

Could we have a little quiet for Deputy De Rossa, please?

The difficulty is possibly greater for those families who do not have a second parent to deal with the financial problems, particularly in relation to families not entitled to claim the deserted spouse's allowance. This is an important social reform which would not cost a great deal of money. The amount involved would probably be less than £5 million and we have already indicated here today where that kind of money can be raised.

One Deputy speaking in relation to another point said that there was no scope for increased taxation. I wonder did he mean that there was no scope for increased PAYE taxation. It is probably true that the PAYE sector are paying as much as they can afford to pay. However, that is not to say that there is no scope for increased taxation. Again and again, it has been pointed out here that there is ample scope in sectors which pay little or no taxation. Deputy Connolly referred to the farming class which according to statistics pay something in the region of 1 per cent of all income tax collected. What is required and what this amendment is attempting is to introduce some form of equity within the taxation system. It is obviously not sufficient simply to try to juggle around with figures and the amount of taxation collected at present under PAYE. The ultimate aim must be to broaden the whole base of taxation. Given the present situation and the possibility for Deputies on this side of the House to introduce measures for the raising of taxation, we must try to bring in measures which will result in some kind of equity.

The point should be made again that there is a small number of people involved. This would not apply to all persons who are made widows or widowers, or to all single parents, only to those who have dependants. Most Deputies would have some experience of the situation about which we are talking, where there is a constant struggle by either the mother or father who is left alone, to try to cope, more often than not, with a young family, trying to hold down a job and ensure that the children are cared for, have clothing, schoolbooks and so forth. This amendment would go some way towards alleviating this situation. I appeal to the Minister to see his way to adopting this amendment.

In reply to what Deputy De Rossa says, I would like to reply that if the married rate bands were applied to single parents — and when I say single parents I mean widows and widowers with dependants, as well as single parents as described in the amendment — it would be open to a married couple who have children to elect for assessment as single persons under section 193 of the Income Tax Act of 1967, inserted by the Finance Act of 1980. By each accepting responsibility for one or more of the children, they would then become entitled as single parents would, to be assessed to tax at the married rates of tax.

For example, a married couple with a total income of £17,000, who pay at the moment £4,442, would reduce their liability to £3,826 by this device. It would appear that it would be unconstitutional, following the decision in the Murphy versus the Attorney General case, to legislate against the married couple being taxed at, in effect, quadruple the rate bands if the single parent were granted the double rate band. In the Murphy versus the Attorney General case, the Supreme Court decided that it was unconstitutional for a married couple to be charged more tax than if they were unmarried. The extension of the double rate band to single parents would cost about £4.6 million in a full year. It has been argued that it is a comparatively small amount but we have been dealings with smaller amounts in earlier amendments. The cost in 1982 would be £3 million and in a full year it would be £4.6 million, if married couples were not included. If we were to include married couples the cost would be £23 million in 1982 and £35 million in a full year. I regret I have to oppose the amendment for those reasons, as well as the constitutional reason.

What we are proposing is that married allowances be applied to dependants of single parents and widows. How would the problem of quadrupling that for married couples come about?

In relation to the special marriage allowance, the rate band does not apply, and that is where the constitutional problem arises.

I am not an accountant or a tax expert and I should like the Minister to explain the position about the anomaly.

Neither am I an accountant or a tax expert. At the moment there is a single person's allowance and a single parent's allowance of £2,900. They are covered in the constitutional case of Murphy v. the Attorney General.

I am not clear about the point. The intention of the amendment is to provide for the single parent and the widow. Does the Minister intend to bring in an amendment to cover that category of taxpayer?

The constitutional issue does not arise until a married person pays more than the single person: a married couple shall not pay more than two single persons. The difficulty would arise only when they go on to the band.

Will the Minister indicate if he accepts the principle of the amendment and say whether he would be prepared to look at the amendment with a view, possibly, to introducing a similar type amendment on Report Stage which would overcome the anomaly?

At the moment it appears that the amendment would create a constitutional difficulty. These amendments came only last night and we had not time to study them in depth. I can have them examined fully and give the Deputy more information. I am sure every Deputy sympathises with the amendment but, as I have said, there are constitutional problems and it would be pointless to accept an amendment which would lead to a situation in which married couples could take cases which would result in our paying £35 million in a full year. I can do an in-depth study and deal with the matter on Report Stage.

Amendment, by leave, withdrawn.
Section 3 agreed to.
SECTION 4.

I move amendment No. 30:

In page 11, before section 4, to insert a new section as follows:—

"4.—(1) Notwithstanding anything in the Tax Acts, income derived by way of interest on savings to a bona fide group water scheme shall be exempt from tax for the year 1982-83 and subsequent years of assessment.

(2) For the purpose of this section a bona fide group water scheme shall mean only a scheme registered as a group water scheme within the meaning of the Industrial and Provident Societies Acts, 1893 to 1978.".

I am glad Deputy Connolly is in the House because he has shown great interest in this — it is something he has advocated. About two months ago I was surprised at what I learned in regard to a group water scheme in my constituency. It was brought to my attention that those responsible for a group water scheme had collected contributions from their members in anticipation of work being done. If they lodged that money in the bank while waiting for the work to be commenced, and there is no question of making a profit because the money will be spent in a relatively short time, they would be charged income tax on the interest it would accrue in the bank, even though the money will be used for a co-operative project which would otherwise fall on the State, and the entire expense would have to be borne by the taxpayers.

I am talking about money collected voluntarily by a co-operative to provide a group water scheme for themselves. It is a matter of people coming together to take on a responsibility of the State, to do work which the State would otherwise have to do. They have to pay income tax on the interest the collected money would accrue. I have raised this matter with the Revenue Commissioners because I could not believe such a situation could come about. I received a letter from the Chairman of the Commissioners which was the opposite to what I had hoped to be the case and confirmed the fact that interest on money on deposit in the name of a group water scheme organiser was liable to tax. One must bear in mind that the people involved are voluntary workers who had probably made themselves unpopular with their neighbours when collecting the money. It is ludicrous if they are liable to tax on the interest that may be paid on their deposit. We should try to rectify this. I am sure that the acceptance of the amendment would not mean any additional cost. I am prepared to defer to the Minister if my definition of the situation is not as perfect as it should be. However, I took some time to prepare the amendment which is fairly accurate in its wording. I hope the Minister will accept it without demur.

As the Deputy has stated, the cost in terms of revenue foregone from the bodies in question would be insignificant. The granting of any such exemption creates possibilities for tax avoidance and the Deputy must appreciate that. It would not be an easy matter to confine the scope of any exemption to group water schemes alone. If exemptions were to be granted to any particular category of taxpayer this inevitably would give rise to requests for similar exemptions for other groups also engaged in what may be described as worthwhile projects like group water schemes. The Deputy has rightly pointed out that the only income arising to group water schemes appears to be investment income, that is interest on balance held on deposit prior to the completion of such water schemes and after such completion in respect of moneys required for maintenance.

There is an alternative to a legislative provision for the exemption of deposit interest arising to group water schemes the amounts of which, as the Deputy appreciates, are very small. Such groups might consider the possibility of investing temporary surplus funds as far as would be practicable to do so in tax-free securities, for example, savings certificates. That would meet the aim of the proposed amendment and at the same time avoid the need to introduce legislation which might be used as a vehicle for tax avoidance.

Is the Minister going to create tax-free securities?

No. I am telling the Deputy that it will be possible for the groups to consider investing these temporary surplus funds in tax-free securities, for example, savings certificates. They would not have to pay tax on interest gained in that way and that would avoid the need to introduce legislation which might be used as a vehicle for tax avoidance, a grave possibility in regard to any concessions that may be given to group water schemes. As a former Minister for Finance the Deputy will appreciate that once one gives in on such an issue one hundred other examples giving the same justification as group water schemes — I am referring to projects like community halls, sports complexes and so on — will be mentioned. For that reason I cannot accept the amendment.

Coming from a former Minister for Finance this amendment seems to be impracticable and difficult to consider. Every Deputy could make a claim for social reasons that interest relief should be granted for savings accumulated. If we agreed to that we would be pulling down tremendous trouble on our heads. For example, I could claim that I have money on deposit to send by children to secondary school or university, that I am saving for a pension, that I am saving for health expenses, or that I am saving to buy a house. People could claim that they were saving money to create employment and we all know that it is the aim of most companies nowadays to have some liquidity so that they can survive the ups and downs that occur. Why not make the interest earned on that exempt? I do not dispute that group water schemes are in need of assistance but for a person who is trying to run the finances of the State the acceptance of this amendment is impracticable. It would open up a new argument. All Deputies could make strong social cases as to why interest should be exempt. It is a mine field and we should not enter it.

There are a number of problems about the suggestion put forward by the Minister so that group water schemes could avoid having to pay tax on interest earned. They would require a degree of flexibility in regard to the lodgment of moneys particularly if they are paying it out on a current basis from a bank account. If the organisers want flexibility they would not be in a position to avail of the savings certificates scheme because it does not have a cheque-writing facility or the flexibility an ordinary bank account has. The suggestion the Minister has made is helpful and it is something that should be made known to the organisers of those schemes. It is my view that very few of them are investing their money in this way. Practically all group water schemes have money on deposit and technically they are liable to income tax on it. I would be surprised if any of them have the bright idea that the Minister has mentioned and I am sure he would not have come up with that if I had not put down my amendment. To that degree, even if we do not succeed in having the amendment passed, we are making progress. Deputy Connolly, the Minister of State, is in a position to give this advice to the organisers of these schemes.

I do not accept Deputy Brennan's somewhat unnecessary analogies, suggesting that a person saving money to buy a bigger house is in an analogous position to the organisers of a group water scheme.

I did not mention that.

The Deputy mentioned saving for a house and that could mean a bigger one than the person owns. Hospital expenses and so on are personal matters while group water schemes relate to industrial and provident societies which set up specifically for co-operative purposes, non-profit making purposes defined by law that goes back to 1893. An industrial and provident society cannot make profit and because of its co-operative non-profit making character, as defined by law, is in a very different situation from a person who might invest money. I should like to remind Deputy Brennan that his party opposed the proposal that another form of industrial and co-operative society, agricultural co-operatives, be liable to income tax. It is because they are co-operatives that they are not liable to income tax. Why should group schemes be liable to income tax on their deposits if agricultural co-operatives are exempt? That is worth bearing in mind before anybody makes analogies about this matter.

Is the Deputy suggesting that we should extend the tax to the co-operatives?

No, but I am suggesting that Deputy Brennan should read a little more deeply into the question of the tax status of industrial and co-operative societies. The Minister has made a suggestion which I will have to consider and I propose to withdraw my amendment with the possibility of introducing a variation of it on Report Stage. I do not accept that this would be the basis for other exemptions. Group water schemes are unique. They are carrying out something which is basically a State function. Individuals are taking it over voluntarily.

What about sports?

That is not a State responsibility whereas water supplies are and have been traditionally.

The State is helping them as well.

(Dublin South-Central): What about housing co-ops?

That is an area we should look at. I propose to withdraw my amendment and examine the position further with a view to re-submitting it on Report Stage.

As Deputy Bruton referred to me and my Department, I should be glad to bring it to the notice of group water schemes that they could invest their money in savings certificates. I was a trustee of a very large group water scheme for a number of years. We never had any surplus money. Many of the representations I receive inform me that contractors are waiting for their money and if the trustees do not pay up in time they have to pay interest to the bank. I was surprised to hear Deputy Bruton say that some of these have surplus money. Most of those I have spoken to are very anxious for my Department to pay the grant.

They collected the money but they were held up by the Minister's Department.

They might be held up when the outline of the scheme goes to design. However, I do not want to become involved in that. There might be a spill-over with some of the group water schemes into other areas and it could be used under that disguise.

(Cavan-Monaghan):“Spill-over” is very appropriate.

The Deputy understands what I mean. They could take on another line of business. We hear a lot about tax evasion and it would be hard to keep this on the rails. If there are any group water schemes with surplus money which they put on deposit, I shall be only too glad to recommend another avenue for the money.

(Cavan-Monaghan): Is the first £70 interest earned by a group water scheme free of tax as it is for an individual?

No. Savings certificates are allowable up to £150.

(Cavan-Monaghan): That is not fair. The first £70 of interest an individual investor earns is free of tax but I understand that the first £70 in the hands of a building society is not.

All the interest is free.

(Cavan-Monaghan): Was the Minister wrong?

Yes, but I admit it.

Amendment No. 30, by leave, withdrawn.

Amendments Nos. 31 and 32 have been ruled out of order in so far as they would involve a potential charge on the people. Amendment No. 33.

I move amendment No. 33:

In page 12, subsection (3) (a), between lines 40 and 41, to insert a new subparagraph as follows:—

"(v) by 10 per cent. per annum of the original market value of the car for each year of ownership.".

This amendment is in respect of benefit in kind in regard to cars. As we said on the Financial Resolution in relation to this section, the position is that people will be taxed on a proportion of the value of the car they have from their company when it was new. They may be taxed in the third or fourth year in which they are using the car when its value would be far less than when it was new. Under the Minister's proposal they will still be taxed on a proportion of its new value. What I am proposing is that the new value of the car, for the purposes of the section, be reduced by 10 per cent per year which is not a generous reduction considering the depreciation in value of the car. The Minister's proposal will encourage people who have company cars to hold them for a year and then get rid of them. This will be bad for the balance of payments and a wasteful use of equipment. Such people will be at an artificial disadvantage if they retain a car for more than a year. This amendment is a reasonable improvement on the proposal made by the Minister and I hope he will accept it.

I cannot accept this amendment because it would render the section ineffective. What was originally proposed in the budget was much more severe than what is now in the Bill. As I said earlier in reply to questions and amendments, I and the Government were severely criticised by Deputies in Fine Gael and by many people throughout the country for altering the budget provisions when we introduced the Finance Bill on 2 June. In one case there was a difference of £½ million between what was intended in the budget and what was in the Finance Bill.

The people who criticised us for the supposedly enormous changes which were made between budget day and publication of the Finance Bill now want me to accept a further reduction in revenue in the case of benefit in kind and company cars. It does not make sense. I cannot accept this amendment.

The Minister is deliberately failing to understand the purpose of my amendment. The purpose is not to render the new tax measures ineffective in regard to benefits in kind. It is simply to improve them so that there will be no artificial incentive for people to keep buying new cars when they could retain their existing ones.

I am not seeking to undermine the Minister's proposal. The revenue implications will be minimal. Perhaps the Minister might tell me if there are substantial revenue implications, which I do not intend, because of the way the amendment is drafted. If the Minister can supply me with that information I will be happy to withdraw my amendment with a view to redrafting it in such a way that it will not have any unintended effect of significantly reducing revenue but only the intended effects of removing any artificial incentive to people to keep buying new cars rather than retaining old ones.

The proposal in the Bill is that 20 per cent will be operative for three years. What the Deputy is asking me is that 20 per cent be for the first year, 10 per cent for the second year and nothing for the third year.

It would be 10 per cent of the 20 per cent.

The amendment clearly states 10 per cent per annum of the original market value of the car for each year of ownership.

That is not the intention.

I can only go by the way it reads.

The intention is not to use the full market value as the basis for making the calculation but to reduce the market value somewhat on a sliding scale so as to remove any artificial disincentive. The Minister seems convinced that this would cause major problems and revenue losses and I am sure that with the advice available to him he has some reason for taking this line. In these circumstances I am happy to withdraw the amendment. I do not wish to destroy the proposal but merely to improve it. Therefore, I will submit an amendment for Report Stage designed to remove all the disincentives involved but I trust that the Minister will arrange to have made available to me details of the basis on which he is rejecting the amendment now. In this way I will be in a position to examine carefully the evidence with a view to submitting an improved amendment. Would the Minister be prepared to make that facility available to me?

The interpretation that the Deputy has put on his amendment now shows straight away that he changed the 20 per cent in the first year to 10 per cent. I did not get fully the point regarding the making available of facilities to him prior to the preparation of an amendment for Report Stage but I have no hesitation in giving to any Deputy any information required in respect of any suggestion or amendment he puts forward. I am prepared to be as liberal as possible in respect of any information requested but obviously there is a misinterpretation in this case.

Amendment, by leave, withdrawn.
Question proposed: "That section 4 stand part of the Bill".

(Dublin South-Central): There has always been a problem with Finance Bills in so far as the question of this benefit in kind is concerned. It has always been difficult to decide on where we should draw the line in these cases. I have always been convinced that business people, commercial travellers and so on should be given full allowances in respect of business expenses incurred. These are the people who motivate business, who sell our products. On this occasion the Minister has been fair. We hear a good deal here about tax evasion and tax avoidance. In this context it is the duty of any Minister for Finance to try to ensure that the loopholes are closed in any taxation measure. The Revenue Commissioners advise the Minister on such matters and they are in the best position to assess a situation.

There are many people who have the benefit of company cars and other perks and we must ensure that in legislating here we do not create a situation in which people entitled to such benefits are not put in the position in which there are disincentives so far as their work is concerned. We are talking about people who contribute in a substantial way to our economic expansion. Frequently, they make efforts in this area that are beyond the call of duty. What we are giving here by way of concession is not generous by any standard but having regard to our economic situation it is as far as any Minister could reasonably be expected to go.

There are many amendments being proposed to this Finance Bill but we must realise that the concession sought in each of those amendments would represent an additional charge on the Exchequer. It is easy for any Opposition Deputy to put forward an amendment but so far none of those concerned has told us where the money for the concessions involved can be found. Surely this question is fundamental to the Finance Bill and to our entire economic structure. I have been here for the introduction of the past 18 budgets and I have known similar problems to arise on each occasion. No matter what figure the Minister might write in to any part of the Bill, there is bound to be some Opposition Deputy who will propose an increase in that figure. That has always been the case but the Minister is the one who must take responsibility, who must answer to the public as to what is in the Bill. The Opposition do not have that responsibility. Naturally, any Minister for Finance would be only too happy to be in a position to concede these various amendments but we all know that that is not possible and that any Minister who would do so would be reneging on the trust placed in him.

I consider the Minister's proposals to be fair. We all appreciate the benefit of a car being placed at someone's disposal. The majority of us here use private cars. We realise the cost of running a car so we must be fair and acknowledge that anyone who is supplied with a company car is deriving substantial benefit in kind. But we must devise a fair system. We must try to ensure that there is a fair apportionment of that benefit and this is what the Minister is doing in this measure.

Successive Ministers for Finance have used a fair rule of thumb in determining what concession should be made in respect of this benefit but none has ever succeeded in satisfying everyone concerned. They have always been criticised by commercial travellers, company directors and so on in respect of the measures taken but we have to be realistic. This sort of benefit in kind represents a certain amount of loss of revenue to the Exchequer and at this time of scarce finances, at a time when £1 million or even £500,000 is a major contribution to the Exchequer, we must try to reach a balance as between what is fair on both sides of the camp.

Any concession granted must be paid for by the public. We do not want additional taxation at this time when we are trying to keep our inflation under control.

Progress reported; Committee to sit again.
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