Dáil Éireann debate -
Wednesday, 30 Jun 1982

Vol. 337 No. 2

Finance Bill, 1982: Committee Stage (Resumed)

SECTION 5.

Debate resumed on Amendment No. 33a:

In page 17, subsection (2) (a), lines 31 and 32, to delete subparagraph (i) and substitute the following:—

"(i) at any time during the year of assessment he was of the age of 65 years or upwards or if under the age of 65 years he was at any time during the year of assessment in receipt of an income less than £7,000 per annum, and,".

—Mr. Gregory—Independent.

Minister for Finance (Mr. MacSharry)

As I was saying before the adjourment of this item, in view of the points I have made already, particularly on the grounds of cost as well as the difficulties which will arise under the PAYE system, it would not be possible to accept these amendments.

I would say to the Deputies concerned with the amendments that, in view of what I say, what Deputy John Bruton said in January and again over the last few days because of the cost and financial constraints generally it is not possible to go beyond the 65-year olds on the initiation of this relief. However, once the relief is established, as it will be under this provision in the Bill, obviously the hope on all sides of the House will be to have it extended as soon as the financial position improves and allows such extension.

Also we shall have the Commission on Taxation report, which I shall have examined fully prior to the next budget. There is also the fact to which I have referred already that huge anomalies could arise if the content of the amendments was accepted, because then many people with very high incomes would have a taxable income of only £4,500. For the reasons I have given I would suggest to the Deputies that, in the light of the financial situation obtaining and until such time as that improves, it would not be possible in view of the cost of implementation of this amendment to accede to that request at present.

Mr. J. Bruton

I am glad we have had a figure from the Minister for the cost of this amendment. The figure he gave was £16 million for exempting people with less than £4,500 taxable income. Although I know Deputy Gregory's intention was to devise an amendment specifically for the low paid, it happens that this amendment, which is based on a figure of £4,500, is helping people who have above-average incomes. There is a total of 808,000 people in the income tax net of whom 428,500 or 53 per cent, more than half, have incomes of less than £4,500. I believe on this issue there is very broad agreement in the House that we should make an amendment to help the lower paid but I believe the amendment in relation to £4,500 is going further than helping the lower paid. It would help more than half the eligible taxpayers in the country.

I would like to mention two alternative possible levels of taxable income which could be used for the purpose. If you were to say that people with a taxable income of under £2,000 were to benefit solely from the concession, then you would be talking about 21 per cent of the total taxpayers in the country, that is the lowest paid people in the country. That obviously would not cost £16 million. It would cost in the region of £6 million. You would be talking about an amendment which was more directly helping the lower paid rather than the majority of taxpayers and it would also cost significantly less. If you were less generous and took only those who had taxable incomes of £1,000 or less you would be helping only 10 per cent of the total taxpayers. Your cost would then be around £3 million, which is a very small sum to pay for establishing the principle that you want to help the low paid people in respect of their rent.

I feel in this discussion we should try to find a consensus across the House between the Minister and the other Members of the House on a figure somewhere between £1,000 of taxable income and £4,500 taxable income which would accept the principle of helping the low paid in respect of their rent and would also be fiscally responsible. If you were to take the lowest figure, of £3 million, you would not be talking about an amendment which would cost a very substantial sum. If that amendment costing £3 million were accepted it would not cost anything this year. The revenue would be next year so the Government would not be in a position where their current budget deficit would be affected. They would be in the position of having to find in the overall budget for next year £3 million to help low paid people in respect of their rent. The House should try to reach a consensus on this.

My party are very anxious to go as far as we can along the road of finding consensus in the House on this point between the Minister and the other Members of the House. I say that very deliberately because the Government should be wary of adopting the attitude that no amendment whatever proposed by anybody except the Minister for Finance can be accepted. If that is their attitude they are in effect saying that this debate is a complete waste of time and we should not be discussing the Finance Bill at all because no matter what anyone says the Minister will not change a single line of the Bill. I am sure the Minister and his colleagues fought very hard to become Members of the House and they would not wish a situation to be created where the debates of the House meant nothing as they would if the Minister persisted in the attitude he seems to have adopted that no change, no matter how modest, no matter how responsible, in respect of anything in the Finance Bill can be contemplated. I am not certain that is the Minister's attitude. It certainly should not be his attitude.

The Minister may take the view that on any amendments to the Finance Bill, no matter how modest they are, once there is a cost issue involved, he has to dissolve the Dáil and plunge the country into an election that night. This is constitutional nonsense. The House has a responsibility to fulfil to amend the Finance Bill, as its majority sees fit, in a responsible fashion. We must ensure that the Finance Bill is passed before any election takes place. If the Government, having considered all the amendments put forward in the debate, decide that the changes to be made are too wide-ranging for them to accept after the Finance Bill has been passed, they can then have an election if they decide that is what they need. As I said on other occasions outside the House, for the Government to say, as they seem to be saying, that they will not accept any amendment, no matter how small, to the Finance Bill, is negativing the value of this debate and if they go on to say that if such an amendment is made they will dissolve the Dáil overnight, then it is they and not the House who will be plunging the country into financial chaos. They are under no obligation to dissolve there and then. They are perfectly free to pass the Finance Bill, as amended by the House, as it is the job of the House to do and only having done so, if they then decide that they cannot work with the Finance Bill, that there is not enough money, they can have an election at that stage. If they decide in midstream, during the course of the discussion on the Finance Bill, to have an election and thereby jeopardise the possibility of the Finance Bill being passed before 25 July, when the resolutions passed on budget night in regard to this matter run out, it will be the Government, not Members of this House who are doing their duty in proposing amendments to the Bill, who will be plunging the country into financial chaos. The Taoiseach needs to think a little more deeply about the issue before he rushes in a panic on to television and the radio to make statements about the so-called irresponsibility of the Opposition when in fact by making those statements he is contemplating this highly irresponsible deed.

I further remind the House that there are many precedents in other countries in relation to Governments who have failed to get support on every item in a Finance Bill. One example is the Callaghan Government in Britain who accepted certain amendments in relation to proposals in their Finance Bill. They had an election after they passed the Finance Bill. They decided they could not live with those amendments. They said they accepted them for the time being and they would try to get a new House that would support their line. That is the normal constitutional practice to adopt in a situation like that. The Government, as I already said, would be acting irresponsibly if they adopted any other attitude. I hope they will not do so. That is why my party have been trying to find a consensus in the House. None of us gains anything by engaging in exaggerated statements as seems to be the approach on the other side of the House.

We should debate this issue of rent relief for tenants as an issue. It deserves to be debated in an unemotional way when we are all trying to reach consensus on the subject. I am sure that Deputy Gregory will feel, like my party, on the basis of further information, that when his amendment will benefit 53 per cent of the total taxpayers it is not only going to the lower paid but is going to others as well and that perhaps another figure could be chosen.

There is another point made by the Minister, that there would be problems in administering the relief. He suggested that there would have to be some form of marginal relief for taxpayers who have — let us take a figure of £2,000 — a taxable income of £2,100 who do not get any income relief as against those who have a taxable income of £1,900 and who get tax relief. Those people would then be worse off. I am sure the Revenue Commissioners have plenty of experience in solving matters like this. If the Minister can be persuaded to accept the principle of this amendment and if he does not devise a way to get over this between now and Report Stage, we can devise a suitable system of marginal relief which would get over that problem.

The other technical difficulty the Minister mentioned in relation to the amendment is that you would not know if someone has a taxable income until the end of the year in relation to the £2,500 or the £4,000. His income might go up and he might not be claiming the allowance. He said that clearly he could not be allowed a relief on a week by week basis. He would have to wait until the end of the year when a refund would be given if his income had gone up to qualify him for the relief. I do not believe that is a problem. I do not see any reason why one cannot wait until the end of the year to get such relief. It would be a simpler transaction in that there would be one refund to be made, one cheque to be sent. By waiting to the end of the year also rather than doing it on a week to week basis it would be easier to make the calculations regarding whatever marginal relief is introduced because that would be just one calculation done at the end of the year rather than an on-going running calculation having to be made week by week by the employer during the year. That is the way we should seek to frame the practice in regard to the matter.

The Minister may say that there would be difficulties in operating this, that introducing such a new concept into the revenue law would cause a big problem for us because it is such a new concept. I do not accept that either because no relief will actually fall to be given to people in respect of their income until next year. All they are being asked to do this year is to keep the receipts and it is only next year that the relief will come into operation. The Revenue Commissioners will have up to nine months during which they can make whatever calculations or arrangements are necessary from an administrative point of view. The Minister may also claim that if we make the amendment at this stage there could be some unforeseen problem that would come up to keep the Revenue Commissioners working assiduously on the subject over the next couple of months. The Minister may say that next September or October they may come up with a problem and say that they should have mentioned that to the Minister when the legislation was going through the House. They may say that they cannot find a way of solving it and, consequently, could not operate the scheme. That is not so either. I should like to draw the attention of the House to the fact that subsection (5) states that the Revenue Commissioners are given power to make regulations, for the purpose of giving effect to that section, with respect to the allowance granted by this section, or to any matter ancillary or incidental thereto, or, in particular and without prejudice to the generality of the foregoing, to provide for certain things.

One can see from the first few words I have read that the Revenue Commissioners have power to make regulations to govern any unforeseen problem that might arise from the fact that this is an amendment introduced to the Finance Bill rather than something that was in the Bill from the outset. That is an inevitable danger in amending any Bill. One cannot think of everything no more than any Minister for Finance cannot think of everything when introducing a Bill. Rarely has a Minister for Finance introduced a new tax or an new tax concession without having to come back to the House the following year to amend. That is not a great problem. In this instance we have a solution built into the section in that subsection (5) provides the Revenue with the power to make further regulations to iron out any detailed problems that might arise in the administration of the section or the amendment to it that may be made in the House.

The £4,500 figure consisting as it does of more than half of all taxpayers and costing £16 million is going further than we can afford at this juncture and we should, either by agreement here substitute another figure, as we can do orally, for the figure of £4,500 in Deputy Gregory's amendment or, failing that, come back on Report Stage with another figure which is more reasonable from the Revenue and low income point of view. I appeal to the Minister and the Government in their own interest as much as in the interests of the House to adopt an open attitude towards amendments of this kind which are put forward with a view to solving a real problem and not to say that because they are the Government they will not accept any change whatever. That is not a politically judicious attitude for the Government to adopt. It is an attitude which shows a lack of appreciation for the prerogative of the House which is even more serious.

Mr. Taylor

The position is that a situation which existed at the time of the Minister's budget speech, which was already in imbalance, has been thrown into greater imbalance by the Finance Bill. I refer to the imbalance between the taxation concessions made available to rent payers as opposed to those made available to houseowners. In the Minister's budget statement it was provided that houseowners paying mortgage interest would have their relief to tax limited to the standard rate whereas in the Bill an additional concession has been provided to that category extending the relief to the full marginal rate of tax they pay. That extends the imbalance between people paying rent and those who own their own houses. It is entirely indefensible. Equal concessions should be given to the less well off sections who are paying rent.

The view of the Labour Party is that we should try to achieve a situation of parity where at least the same concessions on taxation would be available to people who pay rent as to those who own houses. It would be the ideal to have an across-the-board situation. I realise the Minister is facing a substantial deficit and perhaps we will have to try to achieve something less than that. I should like the Minister to give a figure to the House on this. What is the cost to the Exchequer of altering the tax concessions to houseowners from having their tax concession limited to the standard rate as was specified in the budget speech, to having it at the full marginal rate as is provided for in the Bill? It would be reasonable and in the interests of equity in the taxation system for the Minister to consider altering the position which now faces the House in the Bill back to the position which he outlined in his budget statement. The money saved could be made available as a tax concession to those who are less well off and are paying rent. I regard that as a basic minimum.

It is a gross inequity to have a situation where people who pay rent or, even worse, people who are not in a position to pay rent and are neither tenants nor householders but live with in-laws and have not the financial means to buy or rent, subsidise through PAYE those who are in a position to own their houses. The alteration which the Minister has made in the Bill has made that situation worse. Would he not consider reverting to the budget situation — limiting that relief to the standard rate and making that saving available, in a formula the House could agree on, to tenants who pay rent? A small balancing factor would then be brought in at no extra cost. No extra deficit would be involved. I would not be satisfied with that position as an eventual solution. Parity should be achieved between the two but, if the Minister made that concession, we would have achieved something along the road to equity in taxation as between the people who rent houses and those who own them.

Mr. MacSharry

I should like to reply to some of the points raised before there are any further contributions. I wish to be helpful in all cases but this is not possible if there are a number of points raised by various speakers. To take Deputy Taylor's point and the changes in the mortgage interest relief, if it was possible for me to implement what was proposed on 27 January and in the budget I would have done so. It was not possible to do that. It was not possible to limit the interest relief to the 35 per cent band on the capital allowance of £35,000. If I could do it, I would do it. I would have done it in the Finance Bill in June. I stated it in March and my predecessor, Deputy Bruton, stated it in January. It was not possible to implement it. That is the reason for the change. The amount is insignificant. The maximum figure would be £½ million. That is the reply I must give on the advice I received in relation to that point.

Deputy Bruton spoke about the possibility of taking figures other than the £4,500 mentioned in Deputy Gregory's amendment. I have before me the amounts of money involved. If the taxaable income was £1,000 the cost would be £3½ million next year and £5½ million in a full year. If it was £2,000 the cost would be £7 million in 1983 and £11 million in a full year. If it was £2,500 it would be £10 million in 1983 and £15 million in a full year.

I shall not take this opportunity to refer to other points made by Deputy Bruton in relation to amending Bills or possible general elections. Nobody on this side of the House referred to those. It was Deputies from Deputy Bruton's own party who were contributing on various amendments in the debate last week. At least two Deputies were involved. I think Deputy Collins was one and a lady Deputy the other. I am not sure who it was so I shall not mention any name. However, they said all they wanted was a vote to get rid of the Taoiseach and the Government. It was not any wish on their party to help the lower paid when we were dealing with the amendments last week. I want to make that point clear in relation to what Deputy Bruton said.

When one looks at the extension of the relief to people other than those over 65 years of age one must look at it across the board. If we introduce income limits or taxable limits we will cause chaos in the PAYE system. Deputy Bruton had much praise for the Revenue Commissioners and for the officials. I endorse totally what he had to say in that regard, but the advice I have from these people is that the Deputy's suggestion if accepted would lead to the total disruption of the PAYE system. What was intended in the Programme for Government in June last was that this provision would apply across the board, that there would be no income limits and, consequently, no problems vis-á-vis entitlements at any time during the year. In the case of the 65-year-olds and upward the position will be that they will hand in their rent books this year showing exactly the amount of rent they have paid and based on those figures they will get the tax allowance in the following year. That is a simple system, and one that does not give rise to problems that might be brought about in respect of income limits. While I cannot anticipate budgetary decisions at this stage, if there were to be any extension of the scheme it would have to be by some mechanism other than the PAYE system.

Like Deputy Bruton and other Deputies who have spoken, I, too, can accept this suggestion in principle. But we must be realistic and the reality is, in the first place, the question of cost and, secondly, the mechanism that would be used to translate that principle into effective relief for the people concerned. It is not possible to do so within the existing system. As I said earlier, while one can take account of all the points raised in relation to the lower paid, the problem is to find a mechanism which can produce the desired results.

Mr. Dukes

I am somewhat puzzled by what the Minister has said. He has spoken of the danger of a total disruption of the PAYE system. I should like him to expand a little more on what he means by that. Deputy Bruton went to some trouble to point out that if we were to operate the system as he suggests, regardless of whether there are income limits involved, the simplest way of doing it would be to wait until the end of the year when we would be in a position to establish what people's incomes were and what bracket of tax they came into.

Mr. MacSharry

There are no income limits.

Mr. Dukes

These people would then be in a position to furnish details of the rent they had paid during the year. I see no great difficulty in establishing from the P60 form of every employee what the adjustment to his tax would have to be on the basis of information supplied about his rent payments. I cannot see how, operated that way, a total disruption of the system would result. All that would seem to be required would be an extra calculation to be made at the end of the year in precisely the same way as it would be done under the Minister's scheme.

Mr. MacSharry

The number involved is 700,000 and the employer, not the Revenue Commissioners, would be the one who would have the information concerning taxable income. To do as the Deputy suggests would involve going through the income of every claimant and this would totally disrupt the system.

Mr. Dukes

I appreciate that, but we are not talking about having to go through the tax records of everyone in the system. We are talking of going through the records of those who would claim and who produce the evidence required. This is similar to what is provided for in the Minister's scheme. The employer will not be involved. He will not have to do any more than that which he does now, that is, to produce the P60 forms showing how much income the employee has received and how much tax has been deducted. In the light of that information it would be for the Revenue Commissioners to do another calculation for those people to whom the system applied in order to net out what the tax situation would be.

Mr. MacSharry

The position is that the Revenue Commissioners do not have details of taxable income until the end of the year. Therefore, the only way in which this could be operated would be that, by being in a position at the end of the year 1982-83 to know what the taxable income was, the benefit for the year 1983-84 would have to be on the basis of the 1982-83 taxable income. That would cause administrative difficulties and chaos. That is the advice I have from the people whom Deputy Bruton has been praising.

Mr. B. Desmond

I wish to make a general point. The Minister has quoted correctly that part of Deputy Bruton's January budget statement in which he said that the Government programme proposed a tax allowance for private tenancies up to a maximum of £1,000 and that the full implementation of that was estimated to cost in the region of £15 million to £20 million in a full year in tax foregone. According to the Revenue Commissioner's estimate in January last, without there being any question of taxable income limitation, that would be the amount in terms of revenue foregone. Was there any income limitation in the Government programme?

Mr. MacSharry

There was not.

Mr. B. Desmond

If one reduces this amount to approximately 53 per cent of taxpayers, which would be roughly anybody earning up to £7,800, it is fair and reasonable to say that the cost would not be as the Minister says but between £7 million and £10 million in, not this year, but in the year 1983-84. We are not talking about anything in terms of provision for 1982. This benefit comes into operation only in the tax year 1983-84. I would not be the last person to suggest to the Revenue Commissioners that there may be a slight overestimation aimed at scaring certain people. There may be some of that going on, but we cannot buy overestimation in terms of cost.

My questions, then, are: for the over 65's, how much will the scheme cost in 1983-84? The figure in that respect has not been mentioned so far. Secondly, regarding the original estimate of from £15 million to £20 million in a full year in terms of tax foregone in the former Government programme, how is that now apparently only half of what it was originally estimated to be? How is it doubled up? We are assuming that everybody who is paying rent is going to apply for tax relief. It is an assumption, not necessary a valid assumption because some landlords and tenants have cosy arrangements between them.

Mr. J. Bruton

There is something in the section about that.

Mr. B. Desmond

They do not always disclose precisely what they are up to and the arrangements are more cosy than financial in many respects. It is assuming, for example, that there will be no clawback from the landlords in terms of tax on income from the tenant because there would be a higher incidence of tax detection with a system in operation for tax receipts, and there is no allowance for that. It would be allowing at the very minimum a couple of million pounds in that context for these two areas. I see the merit of what Deputy Bruton is talking about but I favour changing the section at this stage, not letting it stand part of the Bill. Remember that whatever comes into operation will be in operation next year and will have to be contained in next year's budget. There is no provision at all for it in this year's budget. It would be up to the Minister in the budget of 1983, 1984 or next year's budget to put in whatever we would give today — £2 million, £3 million or £4 million. You would take that on board in your budget for 1983. That is feasible, but what value does the concession now contain in next year's Estimate?

Mr. MacSharry

I would like to reply to two questions posed by Deputy Desmond. In relation to the quotation, I said that on the basis of more up-to-date data it is now estimated that tax relief for all private tenants will cost in the region of £30 million in a full year or £20 million in 1983. Perhaps Deputy Desmond has not had some experience, but Deputy Bruton will have had, that any Government or Minister can ask for certain information. I think Deputy Bruton has already made this point in relation to the publication of a Bill and I myself on advice have a number of technical amendments down which have arisen on further examination of the issues. The same thing arises in relation to initial examination of any proposal. That was the advice given in January. The position today is that it is £30 million in a full year and £20 million in 1983. These are not figures off the top of my head or made up to this size for the purpose of frightening people off the issue.

In relation to the second question asked by Deputy Desmond, the cost of the concession now in the Bill, proposed firstly by Deputy Bruton and secondly by myself, is £600,000 in 1983 and £900,000 in a full year and 28,000 taxpayers over 65 years of age will benefit.

Mr. J. Bruton

I have some problems with the Minister's figures. I would be very hesitant to suggest that he was not supplying figures that were wholly accurate, but I would like him to tell us the basis upon which these calculations were made. Was any allowance at all made for possible revenue effects in terms of additional detection of people who have hitherto evaded tax, or was that ignored as if it had not occurred at all? If so, as Deputy Desmond said, the figures were not truly accurate. I would not tend to be as optimistic as others in the House might be about the amount of detection, but we must expect some detection to occur. I have difficulty with the Minister's figures. He said that the entire scheme to give it to everyone would cost £30 million in a full year. He also says that Deputy Gregory-Independent's amendment 33b would cost £24 million in a full year. Deputy Gregory-Independent's amendment involves just over half of the taxpayers, 53 per cent in fact, having taxable incomes of less than £4,500. How can it cost £24 million to give it to just 53 per cent and no more than £30 million to give it to 100 per cent of all taxpayers? There does not seem to be any proportionality between those two figures. Either the £30 million for all taxpayers is under-estimated or, more likely, the £24 million for Deputy Gregory-Independent's amendment is over-estimated. They cannot both be right, because £24 million is somewhere in the region of 80 per cent of £30 million, whereas taxpayers with taxable incomes of under £4,500 are only 53 per cent of all taxpayers. How can you have a concession for just over half of all taxpayers which is to cost 80 per cent of the cost of giving it to everyone? Those figures do not seem to make sense and the Minister should explain them.

Mr. MacSharry

On the first point in relation to the cost, these are the figures that have been given to me. I am not inflating them. As I said earlier, this cost would be reduced to some extent — the extent is unknown — by the extra tax collected from certain landlords who at present are evading tax. It will be some significant time before that benefit would accrue to the Exchequer and some years later before the Revenue Commissioners get around to the landlords, etc., but that is the system that will be set in train. These costs are compiled from statistics that the Revenue Commissioners have and any other information. They are fed into the computer and these are the figures that come out. There is no question of attempting to inflate them. That is the best information I can get and the Deputy can see that it is even changed from the information he himself got in January in relation to costs. He made a statement in the Dáil on that on 27 January. I am going, as he did, on the figures given to me based on statistics and other information fed into the computer. This is the information that followed in relation to either the overall exemption or exemption up to £4,500.

Mr. J. Bruton

He is the Minister; he should be able to give figures.

Mr. MacSharry

I should be better than the computer, is that what the Deputy is saying?

Mr. J. Bruton

He should tell us on what the figures are based and not be hiding behind the computer.

Mr. MacSharry

I told the Deputy that it is on the basis of statistics that the Revenue Commissioners have in relation to tenancies and any other information they can lay their hands on.

Mr. Taylor

I do not think the two figures are necessarily contradictory. When one reaches a certain point in the scale the graph goes at a different angle and the two figures possibly could be reconciled. Exactly how one would work it out I do not know, but I do not think that necessarily there would be a contradiction. For the purpose of comparison and balance I would like to ask the Minister what is the cost to the Exchequer of the concession given to house purchasers for allowance of tax at the standard rate at the maximum figure that is allowable, the £2,400 or the £4,800.

Mr. MacSharry

If I can get that figure I will gladly give it to the Deputy.

Mr. Gregory-Independent

If the amendment or any compromise or consensus amendment were agreed to, would there be any cost this year or are we simply putting the amendment into effect and making provision for relief which would be granted next year?

Mr. MacSharry

Sorry, I did not hear the question. I will give the reply to Deputy Taylor. I was getting the information while Deputy Gregory-Independent was asking his question. The cost of the mortgage interest relief is £50 million to £60 million.

Mr. Gregory-Independent

It seems from some of the contributions made that there will not be any actual cost to the Exchequer this year if any of these amendments are accepted. What we are doing is making provision for relief to be granted next year. Is that correct?

Mr. MacSharry

That is the case.

Mr. Taylor

The Minister gave a figure of £50 million to £60 million for mortgage interest relief for up-market people. This highlights the point I was making. It can be seen that house purchasers benefit from the Exchequer by way of tax relief to an amount of approximately £55 million. As the Bill stands people renting houses get a concession of £.9 million. That appears to be a glaring imbalance on the wrong side. Would the Minister not agree that this glaring inequity ought to be balanced?

Mr. MacSharry

I do not believe we can categorise all the people who are getting this mortgage relief as up-market people. There are many people who are buying local authority houses——

Mr. Taylor

Up-market in the sense that they have a house.

Mr. MacSharry

They have been encouraged by successive Governments through different incentives, such as the £1,000 grant or this mortgage interest relief concession, to do so for a number of years. We are talking about moving towards helping those in rented houses, but because of financial constraints both the previous administration and this administration feel that as far as we could go this year was relief for the over 65 year olds and this would be implemented next year. One cannot pick on something which has been on-going policy of successive Governments and say that because the scheme is costing £50 million or £60 million we should provide the concession for the rented side at a cost of £10 million, £15 million, £20 million, or whatever. That is not a valid argument.

Mr. Sherlock

Does the figure of £16 million include the allowance to be granted to local authority tenants?

Mr. MacSharry

It is only for private rented dwellings.

Mr. Sherlock

We are providing a tax allowance for people in private accommodation and not for local authority tenants. Is that correct?

Mr. MacSharry

That is the position.

Mr. Sherlock

I do not understand how anybody could stand over a situation where tax allowances are provided for people in private rented accommodation while ignoring local authority tenants. Why is there such a difference? Deputy Gregory-Independent asked about the cost to the Exchequer this year and the Minister said it would not cost anything. Is he saying that what will happen in 1983 is that the concession will increase the deficit by £16 million?

Mr. MacSharry

I will take the last point first. The way the system will work as proposed in the Bill is that the rent paid until December 1982 will be given as an allowance for the 1983-84 year. That means there will be no cost this year as the system will only come into operation next year. The £16 million to £24 million would add to the cost of running the country next year. In regard to local authority tenants they are already in highly subsidised accommodation. It was not intended that the concession would be granted to them. As everybody appreciates, a subsidy system operates in local authority rented accommodation.

Mr. Sherlock

Would it be true to say that a section of the local authority tenants are subsidised but the majority of people paying differential rents are not being subsidised? The system says that the rent will be assessed on the income of the principal earner, that could be an 18 or 19 year old person just started work. In such a case the subsidy would be very little, if they got any at all.

Mr. MacSharry

Under the differential rents system very few people would be paying an economic rent. The majority of these tenants are in highly subsidised accommodation. There may be a few examples at the top of the scale but I do not know of any such people. Most people are getting a subsidy.

Mr. J. Bruton

I asked the Minister about costings — the cost of the entire scheme being £30 million and extending it to 4,500 people, the cost being only another £24 million, although the latter represent only 53 per cent of the total taxpaying public. How did the Minister get that figure? What was the reason for the lack of proportionality? Is it that the people in higher incomes do not rent dwellings?

Mr. MacSharry

Deputy Taylor put his finger on that. Most people in private rented accommodation are in the lower income bracket. From the advice given to me I have explained that the statistics of private rented dwellers and any other information the Revenue Commissioners can get was used as the base to calculate these figures.

Mr. B. Desmond

We have had a number of complicated amendments, no less than five amendments, three from Deputy Gregory-Independent, one from Deputy Kelly and one from me. There are six amendments to one section, all inter-related and very complicated. From what the Minister said it appears we are talking about a range of costs in 1983 of between £12 million and £15 million in terms of actual relief. This would mean that everybody in the community earning less than £8,000 would be getting a tax allowance for rent. I have some honest misgivings about that because I believe one has to bring in parallel with that, the rent tribunals system. Otherwise there would be subsidisation of landlords as well. We have detailed figures of the cost of each amendment. The ultimate logic will be that on Report Stage those of us who are in full possession of all the information will have to frame an amendment and there will be no question of an "out". With great respect to Deputy Sherlock, he will not have the "out" of saying that because it does not give tax relief to local authority tenants——

Mr. Sherlock

Deputy Sherlock is not looking for any way out. Let the Deputy speak for himself. I hope Mr. O'Malley in the Press Gallery is listening to that. That man should get the facts straight before he goes to press.

An Leas-Cheann Comhairle

The Deputy has not a licence to address the Press Gallery.

Mr. J. Bruton

It has never been the custom in this House to refer to members of the Press Gallery by name. I think a serious view should be taken of it so that it does not recur.

An Leas-Cheann Comhairle

The Deputy will appreciate that the Chair has already indicated to Deputy Sherlock that he should not have done so. We should allow Deputy Desmond to proceed.

Mr. Sherlock

I want to put it straight——

An Leas-Cheann Comhairle

The Deputy may not put the matter straight just now.

Mr. Sherlock

I will.

An Leas-Cheann Comhairle

The Deputy will not. I ask him to resume his seat. I will call on him when Deputy Desmond has made his contribution.

Mr. B. Desmond

People have advanced various reasons why these amendments are unacceptable but those reasons must be examined. Apparently the Revenue Commissioners got the figures wrong in the proposals in January. At that time the cost was estimated at £15 million to £20 million but now we are assured by the Revenue Commissioners that the real cost would be between £25 million and £30 million.

I appreciate fully the difficulties facing the Revenue Commissioners in trying to assess private rents and how tax relief might be given. That is a difficult exercise at the best of times and the Revenue Commissioners have my sympathy. However, it is extraordinary that the figure was given in January of £15 million to £20 million but now the Minister tells us it is £30 million. The Minister has a legitimate point in stating that he would have to make provision for £30 million if the benefit were allowed across the board. Deputy Bruton, quite rightly, pointed out the cost involved. Deputy Sherlock has shifted his ground very considerably from where he said last weekend — as did Deputy Gallagher — that the reason they could not support Deputy Gregory's amendments was that landlords would benefit. Apparently that is not the excuse now. Ten minutes ago the excuse was that local authority tenants would not benefit. We realise that local authority tenants pay differential rents varying between 25p per week to a maximum of £17 per week. Generally this concession does not apply to local authority tenants and, consequently, that argument does not hold. The Deputy will have to search for another argument.

The Labour Party have tabled an amendment providing for relief across the board. We have got the cost and, frankly, I will not be pressing my amendment because I do not think we can afford £30 million of straight relief on that basis although I have very strong views about mortgage interest relief. Relative to what people get in private rented accommodation, mortgage interest relief is enormously beneficial to householders generally. I am convinced there is a strange discrimination in this area.

The kind of amendment I would favour would be that anyone with a taxable income of £2,500 should get this relief. It is easy to make it up. It means that a married man with an income of approximately £5,500 with tax relief of £2,900 plus an extra £200 for two children and an extra £100 between overdraft, VHI, insurance and so on would get benefit. It would benefit a person earning approximately £110 per week as distinct from giving it to someone with take-home pay of approximately £170 per week which would be the effect of the amendment put down by Deputy Gregory. An amendment along the lines of £2,500 would be entirely reasonable and that is what I would table. Deputy Gregory and I would have common ground on that and we would not destroy the integrity of the budget. However, the only way we could do that would be on Report Stage. I throw out this suggestion to Deputy Gregory, to Deputy Kemmy and to those people who want to help low income families who have to pay exorbitant rents. I am sure there are people in Mitchelstown, Charleville, Fermoy and in Mallow who have to pay rents of £30 per week for two rooms out of a take-home pay of £85. They are the people who must be considered for tax relief. I respective of any reservations I may have about colleagues in terms of their political attitudes, I will go all the road with them if they put forward amendments on those lines. However, I have reservations about going all the way with them where six out of every ten taxpayers would get the benefit under the other amendments.

An Leas-Cheann Comhairle

Before Deputy Sherlock speaks, perhaps he will bear with me for a moment. If he is going to speak on the matter to which he has referred already I will help him by telling him that it is not unknown in this House for Deputies to plead with, to cajole or to criticise the great body of ladies and gentlemen called the press but it is not acceptable that we make a direct comment, especially an uncomplimentary one, on any one person.

Mr. Sherlock

Tuigim.

An Leas-Cheann Comhairle

In so far as the Deputy may have been uncomplimentary to any person, I am sure he would wish to withdraw his remark.

Mr. Sherlock

When Deputy Desmond was speaking the tone of his remarks was that there could be common ground between himself, Deputy Gregory and Deputy Kemmy on Report Stage. He then turned around and said that this would give Deputy Sherlock — not The Workers' Party — a way out. I responded by saying I did not want any way out. The Workers' Party are not looking for any way out. We will make any decision on the consideration we give to any issue. At the same time, I looked at the Press Gallery and I said Mr. O'Malley should get that straight. I am often surprised how people can concoct things which are very far removed from the truth. That happened quite recently and you cannot blame me for making the point.

An Leas-Cheann Comhairle

I take it there was no lack of compliment in what you said to the gentleman of the press. I should add that you do not always have to respond to the thwarting or to the invitation made to you by any Member of the House.

Mr. Sherlock

It is as well to keep the record straight.

Mr. MacSharry

Arising from what Deputy Desmond and other Deputies have said in the last hour in relation to the fact that some sort of taxable income limit should be looked at on Report Stage, I would be less than honest if I said I would take this approach on Report Stage. We have got a Commission on Taxation who will be giving us some idea in relation to the overall question of taxation. Because of the fact that anomalies can be created, as already referred to by Deputy Bruton and Deputy Desmond, in relation to any income limit that could be agreed on or accepted, I said I could not anticipate any budgetary measures for the future but that the basis for this suggestion was laid in the Programme of Government of the previous administration last June. Deputy Desmond referred to the figures that were announced in the budget statement of 27 January of £15 to £20 million, which was the estimate at that time and which my predecessor, Deputy Bruton, could not concede because of financial constraints.

The amendment we are debating mentions the sum of £4,500. That would cost £16 million next year and £25 million in a full year. It is not possible within the financial constraints at present to concede those amounts of money. I accept in principle what is being asked for, but the realities have to be faced in regard to the mechanism that would be used and where the money can be found.

Mr. Kemmy

This has been a long day, although it has been useful and constructive. I have no desire to push my amendment to a division. I have listened attentively to the Minister's point of view and he has come some of the way to meet us, at least verbally. He might not like to accept some of the onus we are trying to place on him with regard to tenants, especially young married couples, who are being exploited in all our towns and cities. However, perhaps it is the duty of a Minister for Finance to tackle this problem and to alleviate the sufferings of people who are as helpless as sitting ducks and are at the mercy of unscrupulous and ruthless landlords in using the acute housing shortage to enrich themselves and make large profits.

The Bill should have been flexible enough to take into account what we have said and to help to alleviate this distress and hardship. Unfortunately, he has not done so to my satisfaction. I have a duty to refer to this in the House. This does not mean I am withdrawing my amendment; I will put it to a division in the future if I can, if procedure allows me to do so. If I can make common cause with Deputy Desmond and Deputy Gregory in this area I am willing to do so, but that presupposes that the Minister is willing to compromise in improving his present legislation to meet some of the points we have made in this debate. I hope we will get that undertaking from the Minister because, while we can all pay lip service to this principle, the reality is different. If the Minister is willing to meet us in a spirit of compromise, I am willing to withdraw my amendment.

Mr. Gregory-Independent

In the light of what the Minister and Deputy Desmond have said, it appears that there is no consensus and that the Minister is not prepared to make any commitment or concessions on the principle contained in the amendment. That leaves me with no option but to press my amendment. Amendment No. 33b seems to be the most acceptable to Deputies. It leaves me with no alternative but to ask for a division on that amendment——

An Leas-Cheann Comhairle

Deputy Gregory, amendment No. 33b was not moved. Amendment No. 33a moved and we took debate on amendments Nos. 33a, b and 34. Could we have a decision on what is being done with amendment No. 33a and then we can move on to other considerations?

Mr. B. Desmond

The Deputy is entitled to withdraw his amendment.

(Interruptions.)

An Leas-Cheann Comhairle

Deputy Desmond should leave these matters to me. He is not entitled to withdraw it unless he gets leave of the House to do so. Could I ask you, Deputy Gregory, to indicate if you wish to withdraw amendment No. 33a?

Mr. Gregory-Independent

If I am prepared to withdraw amendment No. 33a, will you allow me to move amendment No. 33b?

An Leas-Cheann Comhairle

If you indicate to me that you wish to withdraw amendment No. 33a. I will put it to the House and, subsequently, we will allow you to proceed with amendment No. 33b, This is not a matter for me; it is a matter of what is required under Standing Orders. You are at liberty to seek the permission of the House to withdraw amendment No. 33a and that does not inhibit you from subsequently moving amendment No. 33b.

Mr. Gregory-Independent

As you will appreciate, I am not as familiar with procedure as some of the longer serving Members of the House are. If I withdraw amendment No. 33a, can you then proceed without further debate to take amendment No. 33b?

An Leas-Cheann Comhairle

Yes, and you will have the pleasure of moving it again as a separate one as if we had not discussed anything at all pertaining to it.

Amendment, by leave, withdrawn.

Mr. Gregory-Independent

I move amendment No. 33b:

In page 17, subsection (2) (a), lines 31 and 32, to delete subparagraph (i) and substitute the following:—

"(i) at any time during the year of assessment he was the age of 65 years or upwards or if under the age of 65 years he was at any time during the year of assessment in receipt of a taxable income (after deductions of normal allowances) of less than £4,500 per annum, and,".

An Leas-Cheann Comhairle

We have a new motion before the House. The House will appreciate that we have discussed the contents of amendment No. 33b even though it has not been moved.

Mr. J. Bruton

I welcome the idea behind amendment No. 33b. However, the House will appreciate that there were problems pertaining to amendment No. 33a the main one being that it was based on gross income of £7,000, thereby giving benefit to people who had an income of £7,000 regardless of whether they had a large family or no dependants whatever. It meant simply that if one had an income of less than £7,000, no matter what was one's situation, one got that benefit.

This amendment, No. 33b, does not have that defect in that it is related to taxable income — in other words, income after deduction of allowances. Therefore, a person with a large number of allowances will reach a taxable income of £4,500 at a higher gross income than a person entitled to very few deductions. Amendment No. 33b is fairer in that it takes better account of the actual situation of families likely to be claiming this allowance.

We have been told that the cost of Deputy Gregory's amendment, on the figures as indicated here, would be in the region of £24 million in a full year and £16 million in 1983. Of course, it would cost nothing in this year and does not therefore affect the current budget deficit for this year in any way — we would have the time between now and whenever the amendment was passed to find the money.

The Minister raised some technical objections to this concept of taking taxable income and saying that people with less than that taxable income shall be eligible for the allowance and people with more than it shall not be eligible. The difficulty he raised was that it is not possible to know whether a given person has a taxable income of more than or less than that sum until the end of the tax year. Therefore it is not possible until the end of the tax year to know whether or not that person is entitled to the rent allowance. My view is that that problem can be solved if the relevant rent allowance is made in the form of a single cheque to be sent to the taxpayer at the end of the year, not during the year as he earns the money but at the end of the year after all of these calculations have been made. This would remove any administrative difficulties the Minister might have raised against this allowance. Of course it would mean that a taxpayer would have to wait a little longer for his allowance. But, rather than get no allowance at all, because the Minister claims that the administrative difficulties would be insuperable, it would be well worth while waiting until the end of the tax year and have it received in one cheque, as I have suggested. That disposes of that problem.

The whole idea here is that we are seeking to help people who are in rented accommodation. At present, as Deputy Taylor brought to light, there is a tax benefit in the region of £50 million being given to people who own their own houses in the form of mortgage interest relief. That tax benefit is given them regardless of how well off they are, regardless of whether it is being used for their second, third, fourth, or fifth house in terms of moving from one house to the next. Therefore it lends itself to trading up in the market, to people improving their standard of accommodation, perhaps indeed to increasing house prices by virtue of the additional demand that process generates. At the same time people who rent their accommodation get no benefit whatsoever from the Revenue Commissioners. It is our view — and has been our view both in Opposition and in Government, in the joint programme that Fine Gael agreed with our former colleagues in Government in the Labour Party — that to remove this inequity, there should be an allowance against income tax for rent payments——

Mr. Fitzpatrick

(Dublin South-Central): Why then did the Deputy put it into his Finance Bill?

Mr. J. Bruton

—— in a similar manner to that available to people who get mortgage interest relief.

As I explained before Deputy Fitzpatrick came into the House — and I am glad he is here now — the considerations that led us into not going the whole way in introducing these concessions were primarily financial. It was our wish to bring in a comprehensive rent allowance system. But in the January budget we decided it would be better as an initial measure, given the cost problem that would ensure next year but not this year from introducing a broader allowance system, to introduce an allowance solely for those who were over the age of 65.

An Leas-Cheann Comhairle

Sorry, Deputy Bruton. I am reluctant to interrupt. But technically there is a new motion before the House. My understanding was, and indeed from listening it was obvious that the three amendments were being discussed together. I would hope that, while technically we can contend that they are not, regard would be had now to the fact that we have already covered much of this ground. Indeed, the ground being covered now by Deputy Bruton has already been covered by him and there is no obligation to repeat it for the sake of Deputy Fitzpatrick who was not in the House earlier on.

Mr. J. Bruton

Well, I am anxious to assist Deputy Fitzpatrick in understanding the issues at stake.

An Leas-Cheann Comhairle

I am afraid that Standing Orders do not provide for this magnanimity. I shall have to ask you, as I will ask other Deputies, to avoid repetition.

Mr. J. Bruton

I thought Deputy Fitzpatrick would be anxious to hear all of the considerations before deciding in which direction he will be exercising his franchise in the event of——

Mr. Fitzpatrick

(Dublin South-Central): What the Deputy thinks about it and what he put into the Bill are different. That is what is important.

An Leas-Cheann Comhairle

I appeal to Deputy Fitzpatrick to allow Deputy J. Bruton to proceed without interruption. Deputy Fitzpatrick will be given an opportunity of making his contribution.

Mr. Dukes

He will also find out why what is in the Bill at present is in the Bill in spite of what he feels about it.

Mr. J. Bruton

I feel it is appropriate that the debate on the Committee Stage of this Bill be used as an opportunity for improving on any proposal emanating from any Government. As the House is aware, this proposal was one that was made in my budget and has been adopted by the present Government. But the fact that I put it forward with the restriction to those over 65 does not mean, in the light of arguments advanced in this House from Deputies of any party, that one might not see the possibility of improving on that proposal. Clearly, at a time when there was very limited finance available, it was reasonable not to extend it to all people, and reasonable to introduce a restriction to people who were over the age of 65. However, if it proves possible to introduce a further distinction making the relief available to those under the age of 65 who have low incomes only and not to those with large incomes within the generality of the taxpaying public, if that becomes technically possible, as it now seems it is in the light of the debate so far, then it is right that we should consider whether this matter should not be examined again.

The problem here is clearly one of cost. The Minister has told us that the cost of Deputy Gregory's amendment would be as I have already indicated. He has also said, however, that if one were to choose a lower figure, if the maximum taxable income that one could have if one was to avail of the allowance was £2,500, one could arrive at a figure of £15 million for the full year cost. If one took a taxable income figure of £2,000 one could arrive at a figure of £11 million. On the other hand, if one took a figure of £1,000 taxable income one could arrive at a full year cost of £5,500,000. While £24 million is a very substantial sum, £5,500,000 is not quite such a substantial sum. I feel we need to look at this whole subject anew in this light.

I also feel that this debate must be influenced by the fact that the Minister has taken a totally negative attitude towards any amendments to this or any other section. This has only emerged in the last few minutes when it became clear that the Minister was not prepared, even on Report Stage, to entertain amendments in respect of this matter. I hoped, as I said in my opening remarks on this section, that we would be able to reach a compromise. I hoped the Minister would be as forthcoming on his side of the House as we wished to be in suggesting modifications, looking for costs, weighing up what we would like as against what we can afford and reaching a reasonable compromise between those considerations. The Minister seems to have adopted a stance which in my view is a negation of the whole debating process in this House, the purposes for which the House has been established, that it does not matter what amendment or suggestions are proposed by anybody, no matter how reasonable they are or how much valid argument is proposed in their favour, he will not change a single line of the Bill so far as this matter is concerned.

That seems to be a very unreasonable attitude for the Minister for Finance or any Minister to adopt in a matter of this kind, particularly when it seems a majority of the Members of the House want some change in respect of this section. The Minister, in opposing this, is speaking as a representative of a minority in the House. That needs to be contemplated on by the Minister and by everyone else before judging if he is right in adopting such an inflexible attitude in respect of specific, realistic and modest proposals that might be made for some modification to help the low paid in relation to rental income. While I have said I would not be totally happy with the extent of the concession that might be granted in Deputy Gregory's amendment, extending as it does to relatively substantial costs, I believe the Minister, if he wishes to have the co-operation of the House and the co-operation of the majority of Members in the House, should be more concerned than he seems to be, in reaching consensus as to amendments that could be introduced on Report Stage.

We would not be asking him to spell out the nature of that amendment at this stage or to say what figure he would be prepared to agree to in terms of the maximum taxable income one could be earning before one could claim this relief but we would be asking him at least to give an indication that he is prepared to consider amendments along these lines. That is precisely the reverse of what he has indicated he is prepared to do. He is not prepared to do anything. He is not prepared to entertain any amendments whatever.

The Minister may console himself by saying that this is showing great fortitude on his part. I do not believe that is so. It is fortitude at the expense of tenants in rented accommodation for whom small concessions could be made at relatively modest cost. We have been canvassing various concessions, costing in some cases as little as £5½ million next year and, perhaps, even less if further modifications or restrictions could be introduced between now and Report Stage that would limit the concessions in one way or another to ensure that it was only those who are absolutely deserving get the benefit. It is unfortunate, and in many senses a negation of the processes of the House, that the Minister should adopt the attitude he has in this matter.

I have also said — this is an important point that Members need to consider carefully — that we need to encourage the rented market for housing for economic and social reasons. The position is that over the last 20 or 30 years the amount of available rented accommodation has reduced to about half of what it was at the beginning of that period. Less rented accommodation is available and much more reliance is now being placed on owner-occupied accommodation. The latter type of accommodation is a less flexible and less economical method of meeting our housing needs as a community because if one owns a house one keeps it for life regardless of whether one is using the full house or only some of the rooms in it. At some stage in the family cycle one might use the house to the full but at other stages in the cycle one would find oneself only using one or two of the rooms with many left vacant. If one owns the house one can do nothing about making better use of the available housing accommodation unless one breaks it up into flats.

We have been pouring millions of pounds of the taxpayers' money and national resources into housing. As long as we keep disproportionately pouring it into owner-occupied houses we are going to have a situation where our housing stock will be seriously under-utilised. People may say that is a somewhat esoteric argument. It is not and Deputies in Dublin constituencies know of couples who have reached the stage where most of their children have gone away and got married. They will realise that there is a considerable amount of under-utilised housing accommodation in the area. Likewise, we have a situation where when families are at a certain stage, the early teenage-stage, the same house is not big enough.

There is a reasonable case to be made for encouraging people, as is the case in other countries, to adjust their housing accommodation if they are living in an urban setting. It is not possible in a rural area if one is living on a farm. There is no reason why people should not be encouraged to move to and from houses that are more suited to their housing needs at a given time in their family's development. That can be done relatively easy if there is a substantial and active rent-housing market. Over the last number of years by giving disproportionate benefit, as Deputy Taylor correctly pointed out, to people in terms of mortgage interest to buy their own homes we have given disproportionate encouragement to a rigid owner-occupied housing market and discouragement to the existence of an active rented housing market by not allowing any tax allowance to one and allowing a significant tax allowance to the other. The result has been that we do not have the flexible housing market or the best use of the housing stock we should have. It is not due to the fact that, as many people say, the Irish people like to have a house of their own. That is almost a social cliché that has become acceptable here. People want a house that suits their needs at a given time. The reason they are going for owner-occupied accommodation is that they get big tax advantages and because there are big tax penalties if they go for rented accommodation.

The amendment in a modest sense is seeking to remove this artificial imbalance in terms of incentive in favour of owner-occupied accommodation and radically against rented accommodation and the development of the rented accommodation market here.

In this discussion we are raising issues of considerable importance not just in terms of the cost of the amendment which, if it is suitably modified, will not be very significant, but in terms of the best way of using our capital. Any investment in housing is a utilisation of our capital and we must use it to the best possible result in terms of better accommodation for our people. We need to encourage the provision of more rented accommodation and the amendment is a step in that direction.

I should like to bring to the Minister's attention, and to the attention of members of his Party, the fact that Deputy Gene Fitzgerald in his budget in January 1981 introduced a proposal to encourage the provision of additional rented accommodation. He introduced a tax concession for the development of new rented accommodation, not a tax concession for the tenant. That was a step in the right direction. That move by Deputy Fitzgerald was a reasonable one to bring forward. Our proposal is, broadly speaking, consistent with that trend. We should try to see if we can find a way of suitably modifying the amendments being proposed so as to keep the cost at a relatively modest level and, at the same time, move in the direction of encouraging the rented accommodation market. We have discussed the various levels of cost that would be introduced and we need to look at them further because it is regrettable that the Minister has not given any indication that he is prepared to give consideration to any amendment on this subject now or on Report Stage. The debate could have come to an amicable and speedy conclusion a while ago if the Minister had indicated such a willingness. He did not do so and therefore we need to explore the matter further.

Mr. MacSharry

Deputy Bruton made quite a philosophical argument about the imbalance between rented and owner-occupied accommodation. That same imbalance existed in January. It is not something that has happened since January. It is easy for Deputy Bruton to talk about a compromise or concession ranging between £5½ million and £25 million when his great argument about the imbalance between rented and owner-occupied accommodation existed in January. I cannot argue about that imbalance. I agreed with that point but it existed in January and the best Deputy Bruton could do then, as we are doing now, was to provide £900,000. Now he is talking about expenditure ranging between £5½ million and £25 million and in my view that is hypocritical of a former Minister for Finance.

That begs the question as to the intention behind the attitude adopted by Deputy Bruton and Fine Gael in regard to this series of amendments, particularly amendment No. 33. I have been accused of not being forthcoming and not being flexible. I have said already that one could accept in principle the intention behind such amendments but, as they are budgetary measures, I cannot anticipate at this stage what budgetary decisions might be made in relation to any extension of the concession. Like other Deputies, I could accept the intention in principle outlined in the amendments but I would be less than honest if I said I could come forward with an amendment on Report Stage. I have already pointed out the anomalies that may occur when going this way in regard to taxable income. I also pointed out the difficulties about administration and pointed out that the Report of the Commission on Taxation would be issued soon. When that report is issued we will have an opportunity of looking at this whole area in regard to income tax, PAYE, PRSI and all other tax concessions. That is as we said we would do and we hope to be in a position to make proposals arising out of that in the January budget.

I cannot anticipate what the budget decision might be in relation to any extension of this. It is disheartening to find Deputy Bruton, and Fine Gael, in the space of a few months deciding to support an amendment making the minimum cost £5½ million and the maximum £25 million, particularly when in January they were prepared to spend £900,000. That does not seem to make sense and their intention is not clear. Between now and Report Stage they are seeking consensus between all parties and the Government on a figure ranging between £5½ million and £25 million.

Mr. Dukes

I am sorry to hear that the Minister is disheartened but I cannot say that I have a great deal of sympathy for his feelings on the matter.

Mr. MacSharry

It is the attitude of that side of the House that has caused it.

Mr. Dukes

If our attitude has caused the Minister to be disheartened it is a feeling that the Minister will have to get used to because if he persists in the attitude he is adopting on these amendments he will find more reason to be disheartened with our reaction in the face of what is a well reasoned case. Now that our feelings are being bruised mutually on all sides of the House what disappointed me was the Minister's attitude in his previous intervention. Not only did he say he would not accept any of the amendments now before the House but he did not see any possibility of accepting any other amendment on Report Stage.

Mr. Fitzpatrick

(Dublin South-Central): He did not say that.

Mr. Dukes

He said that clearly but I am not sure if the Deputy was here at the time. The Minister has just said now that he would be less than honest if he had forecast any possibility.

Mr. MacSharry

I said I would be less than honest if I said I could come forward with an amendment on Report Stage. The Deputy should not be trying to twist what I said just because his party are changing stance. The Deputy should not be trying to put that over on this side. It is on that side it lies.

Mr. Dukes

When the Minister has finished baying perhaps he might listen to what I am saying. The Minister's colleague on the back benches is very vocal today.

Mr. N. Andrews

I am very vocal. The Deputy is misinterpreting the Bill.

Mr. Dukes

The Deputy is in fine voice. It is good to hear him. The discomfort on that side of the House goes further than the Minister's bruised feelings. There is an occasional Deputy on that side who has a bruised conscience about what is going on. It is disappointing that the Minister should take such an obdurate line on this, particularly since he has repeated on a number of occasions that he can agree in principle with the spirit and direction of the amendment and since he has also said that he agrees with the rest of the argument advanced on this side in order to support the case. I find it curious that he can say all that and then say he will not change anything.

Mr. MacSharry

Because I cannot anticipate budgetary decisions. The Deputy should finish the sentence.

Mr. Dukes

If we or the Minister are to have any function here that is what we should be talking about. We are in the business of trying to make those decisions. We are in the business of examining a Finance Bill to give effect to the budgetary proposals put forward.

Mr. MacSharry

Next year's budget.

Mr. Dukes

If we can make decisions along the lines Members of the House indicate they want, then we are doing our job constructively. It is not right for the Minister to be disappointed or upset because we set out to do in the House what we were elected to do.

Mr. N. Andrews

Why did you not do it in January?

Mr. Dukes

If the Deputy listened he might find out what was going on in the House. He might be able to make some objective judgment as to the merits of the issues before us.

An Ceann Comhairle

Deputy Andrews can make his contribution in a few moments.

Mr. N. Andrews

Thank you. I look forward to that.

Mr. MacSharry

So do we all.

Mr. Dukes

Will the Deputy have anything left to say? He should save his breath until then. What we are charged with is to make decisions on the Finance Bill. What we have been asking for is that a proposal in the Finance Bill be modified to take account of a number of arguments to which we attach some weight and to which the Minister said he could attach a deal of weight and with which he has sympathy.

We are talking of a range between £5½ million and £20 million which would be the cost of the amendments which have been proposed in a full year. We are also talking about a range between £3½ million and £10 million in 1983 which would be the range of possible alternatives to the specific amendments we are now discussing. The Minister seems to have moved to the position where he says that if anything was to be done along the lines we are proposing, it would not have a direct effect on the Exchequer until 1983. We have established that. We are not talking about the effect on this year's finance but the effect of deciding in this year, 1982, to make provision similar to that in the amendment under discussion, but perhaps with a different income figure, and implementing that decision next year in 1983, leaving the Exchequer position under that head untouched in 1982 and leaving untouched, in so far as it is appropriate to use that word, the Minister's financial targets for 1982.

This is another area where the Minister disappointed me more than anything and has not given a full explanation of his objection to the suggestion we made. This was that we would make provision this year that the allowance would be granted and the whole matter would be settled at the end of the tax year. The Minister said that this would cause serious disruption of the whole PAYE system. When he was challenged about that he did not give an adequate answer. I should like him to reflect on that again. He may find that when we take the fact that the financial impact of these proposed amendments would be in next year because of the way we have suggested the system be implemented, he might be a little more relaxed and flexible in his approach. What we are proposing — we can frame an amendment at a later stage — is that the allowance be set up this year and that we make provision that people whose taxable income is not above £X would at the end of the 1982-83 tax year be granted an allowance in relief of a proportion of their income tax liability on the basis of the amount of rent which they had paid during that year.

Mr. Fitzpatrick

(Dublin South-Central): For 1982?

Mr. Dukes

Or for the year beginning 5 April 1982, if the Deputy wishes it that way. We could look at those details if the Minister is open enough to accept that we can come back to it on Report Stage. They would get an allowance in relief on some of their tax liability at the end of 1982-83 tax year for rent which they proved they had paid during 1982 or the tax year 1982-83. The effect is the same. If we end up, as Deputy Bruton said, at the end of the year making a refund of a proportion of tax to the individuals concerned, they have got value out of the concession for the year. They may not have it through the year but they will have had value for the concession. They will have had substantial relief on a part of their income tax liability and we will have achieved with that system what we set out to achieve with the amendment we have before us.

Those are technicalities. The essential point is that it can be done at the end of the tax year. The financial impact of it will be in 1983, as the Minister said. It would not necessarily be a complicated calculation. I am not sure the Minister has answered this point completely. He went into a discussion about what the complications would be for employers if they had to fill in various forms for their employees. I do not see any reason why employers should be brought into it. We should have a direct computation of the tax relief on the basis of the evidence presented by a beneficiary of the rent he has paid on the one hand and on the other the records available to the Revenue Commissioners on the amount of income tax the person in question has been assessed for during the year. There is no reason for an employer to come into it. It could be done independently of the employer. There could be a direct transaction between the Revenue Commissioners and the person in question in order to settle his entitlement.

I am not convinced that we should move on this before we have the report of the Commission on Taxation. I wonder what members of that commission must think when they read the debates we have in the House on the areas which cover taxation. I am sure there were nights when they were unable to sleep because of anxiety about what next we would expect them to cover in their report. I doubt very much that they will be able to produce a report next month, and that begins tomorrow, that will cover specifically everything that we expect them to cover. I am not sure whether that report will go into the kind of detail that we would need to assess the merits of proposals such as the one we are discussing now. In any case the Minister is not making of this a matter of principle. He is prepared, and I congratulate him on this, to implement the measure which we had put forward in January to have effect this year. He is prepared to do that without making any appeal to the Commission on Taxation and without waiting for them to produce their report. Why, then, should he wait for the commission to report before operating the same kind of measures in favour of perhaps a much wider group of people?

Mr. MacSharry

It is the mechanism that is important.

Mr. Dukes

The Minister keeps referring to the mechanism but he should explain in a little more detail exactly what he means. I do not see how or why we would be obliged to require that employers make a calculation on a weekly, monthly or even yearly basis as to what would be the adjustment on the tax bill for any individual.

Mr. MacSharry

Both the Deputy and I must be guided by the Revenue Commissioners in these matters.

Mr. Dukes

With due deference to the Revenue Commissioners, they are not the ones who are legislating for changes in our tax system.

Mr. MacSharry

I did not say they were.

Mr. Dukes

I am not convinced that we should be guided always only by what are the inclinations of the Revenue Commissioners in terms of the construction of a new scheme.

Mr. MacSharry

They operate the system.

Mr. Dukes

With the greatest respect to them, surely it is our job to say what we require to be done and it is their job to work out the scheme required. I do not wish to become involved in this kind of sterile argument but I would warn the Minister against accepting too readily that we must be said and led by what the Revenue Commissioners are inclined to put forward as the kind of initiative of which they would approve and which they think they can operate.

Mr. MacSharry

I do not think anybody said that. What I said was that they operate the system. They are the people who advise us on the operation of any scheme.

Mr. Dukes

They must act on the basis of what we wish them to do. But if on any occasion we are proved wrong, we must come back and amend the relevant part of our tax legislation. Occasionally we find that the mechanism set up by the Revenue Commissioners proves for one reason or another not to be entirely suitable for the job concerned. Without intending any disrespect to the commissioners, it is our responsibility to have the system right, to say what way the tax system should work. We are the ones who must go before the people every so often and put our heads on the block. We are the ones who must explain to the public whether the tax system is doing what we want it to do and whether it is having the effect on them that we told them it should have.

The Minister has made some play of the fact that the imbalance between rented and owner-occupied accommodation has not happened only since January. He should not dwell too much on that argument. The situation has not come about only since last January nor since last June nor in the last ten years. That is a point to which we could give much more attention.

Mr. MacSharry

Something that Deputy Bruton did not do.

Mr. Dukes

Our whole cultural approach seems to be that the first step we want people to take on marriage is to saddle themselves with a debt that will continue for a large part of the remainder of their lives. Not everybody who buys a house is in the position to which the Minister has referred. Not everybody is in the position from time to time of constantly trading up in the housing market. There are people who buy houses and who are never in a position to trade up. A big proportion of those who buy houses of all kinds, whether local authority or privately-built houses, do so with the intention of remaining in them for the rest of their lives. This is not a new development. Deputy Bruton was drawing attention to one aspect of a wider problem, which is that we seem to inculcate in our young people this almost automatic obligation that as soon as they marry, or even earlier, they must take on the very substantial debt involved in buying a house and this is probably at a time when they wish to start a family. There are other ways of dealing with the question of organising one's lodging for the rest of one's life. I notice that the Minister has left the House.

Minister of State at the Department of Posts and Telegraphs (Mr. Leyden)

He will be back in a moment.

Mr. Dukes

I should not like him to think that I was saying something disobliging about him in his absence.

Mr. N. Andrews

I would draw the Deputy's attention to the fact that Deputy Bruton left the House half an hour ago.

Mr. Dukes

I am sure Deputy Andrews will be given ample opportunity to make his contribution.

Mr. MacSharry

I have not missed a word the Deputy said.

Mr. N. Andrews

Perhaps if Deputy Bruton spent more time here he would not be so confused about the January budget.

Mr. Dukes

I cannot take very seriously the Minister's remark in criticism of us in terms of the financial effect this proposal will have. As I have said, that financial effect would fall in 1983. The Minister was at some pains to point out how much of it would happen in 1983 and how much would happen in a full year, but he seems to have forgotten that none of it would happen in 1982. He seizes on this argument of circumstance to criticise us for putting forward an amendment while we had up to last January and indeed since made the point that we must take very seriously the financial targets set in budgets. We said at the time that we should take very seriously the kind of deficit we aim at securing. To say the least I find it gratuitous of the Minister to come here and criticise us on a head of expenditure that would not occur until next year, to criticise us on grounds of financial rectitude when he has not told us from where he will get the £45 million which has been given away already this year after his own budget and in complete contradiction of what he said on budget day.

Mr. N. Andrews

What about the £140 million?

Mr. Dukes

That was also in complete contravention of the kind of speech which he and his Taoiseach have begun making in the past few days, where they seem finally to have got the message, the validity of which they denied most vigorously between 27 January and 10 March last. We cannot take that kind of argument very seriously and I assure the Minister that that is not the kind of argument that will deflect us for a moment from pursuing the kind of amendments we have put forward.

Mr. MacSharry

What amendment has the Deputy put forward?

Mr. Dukes

It is totally irrelevant to the kind of amendment we are talking about. We are discussing the second amendment put forward by Deputy Gregory and I am discussing the kind of alternative amendment to that that we might bring forward on Report Stage and which I am asking the Minister, in the light of all that I have said, to be open to consider on Report Stage——

Mr. N. Andrews

Apart from being boring——

Mr. Dukes

——for the reasons I have set out. The kind of remark he is making about financial rectitude as far as it applies to this year is irrelevant when we come to consider the case for amendments of that kind. I ask the Minister to take that point on board and make it clear to some of his more vocal backbenchers here who do not seem to have understood what we are talking about as far as costing is concerned.

(Interruptions.)

Mr. Dukes

Also they do not seem to have understood the full implications of what the Minister and the Taoiseach have been saying in the last few days. Read the Minister's speech to Cáirde Fáil lately. Why did the Minister feel it incumbent on himself to be converted to financial rectitude only at a meeting of Cáirde Fáil? Why did he not make that point in this House? Why could he not come before this House, a Cheann Comhairle, and make those points?

An Ceann Comhairle

Could the Deputy come back to the amendment?

Mr. Dukes

I am speaking to the Minister's comments on the amendment we put forward.

Mr. MacSharry

I will invite the Deputy to listen——

Mr. Dukes

I am dealing with some of the points which the Minister has brought forward in support of his totally obdurate stand in relation to a very limited set of proposals which will have the effect of doing something worthwhile without conferring a direct financial benefit in the year 1982 to which the Minister belatedly seems to attach some importance.

That is by way of a general background to the kinds of things we have been saying. Once again I ask the Minister and Deputies on that side of the House to consider very carefully the following proposition. If the Minister is not prepared to go as far as the amendment before us goes, that is to provide for relief in respect of rents where the taxable income of the person concerned is less than £4,500 a year, will he consider any one of the other suggestions which have been made such as that we would apply this either in the case of people whose taxable income is less than £2,500 a year or, failing that, less than £2,000 a year or, failing that, less than £1,000 a year? Thus we could make clear the acuteness of this problem which has been underlined by a number of Deputies on this side of the House and which I am sure is not unknown to Deputies on that side of the House and we can make progress and show that there is a commitment to making some further progress along that line than is seen in the Bill before us. I ask the Minister also to consider the possibility of simplifying the system to the point where we could do all of that without causing what he claims will be major disruption in the PAYE system which would not in any way be rendered necessary or inevitable by the amendments which we are proposing.

An Ceann Comhairle

Deputy Desmond has an amendment which he wishes to move.

Mr. B. Desmond

I move the following amendment to amendment No. 33b:

In subparagraph (i) to delete "£4,500" and substitute "£2,000".

It may seem somewhat confusing but I am proposing an amendment to Deputy Gregory-Independent's amendment. Deputy Gregory-Independent has spoken quite eloquently, pointing out to the House that he wished to provide tax relief to persons with a taxable income of £4,500 maximum. He did so, having withdrawn his earlier amendment No. 33a which he accepted has given, generally speaking, an imbalance of relief to single persons as against married persons. The costs have become apparent in the House and, accordingly, I am moving that "£4,500" be removed from Deputy Gregory-Independent's amendment and that "£2,000" be inserted in place of it.

As every Deputy here knows, a married person's allowance under the current Finance Bill is £2,500. If one adds to that say £300 for three children which is the current allowance, £50 for insurance and so on plus the special allowance for PAYE or PRSI of £312 or £600, a married person would have total allowances of £4,162. Add on taxable income of £2,000, and roughly speaking, the effect of my amendment would be that anybody who is earning around £120 per week would get the benefit. Deputy Gregory-Independent's amendment would give tax relief to about 55 out of every 100 taxpayers in the country. That is a very large number. Under mine, which is the amendment to the amendment, roughly speaking about 19 out of every 100 would get the benefit.

Mr. N. Andrews

How does the Deputy work that out?

Mr. B. Desmond

The Minister has indicated that on £4,500 of taxable income roughly 53 per cent of our taxpayers would tend to get the benefit.

Mr. MacSharry

That figure is 70,000.

Mr. B. Desmond

Is it 70,000?

Mr. MacSharry

Who could benefit.

Mr. B. Desmond

That is not an unfair figure because there are roughly 800,000 taxpayers. The Minister said 70,000. In fact my amendment is extremely modest. That would mean about one in every ten would get the benefit. The cost is the biggest issue before the House today. The Minister has said, and we must accept his word, that Deputy Gregory-Independent's amendment would cost £15 million for nine months of next year and £25 million for the full year 1984. I estimate that the £2,000 of taxable income relief, the basis that we would give, would be about £5 million or £6 million in 1983 and about £6 million, £7 million or £8 million in 1984. The proposal is entirely modest and reasonable and must be contrasted with the fact that everybody in this House knows — Deputy McCreevy is an accountant — that the amount claimed for mortgage interest relief which Deputy Taylor has talked about is £60 million. Deputy Taylor winkled out the figure of £9 million in respect of repairs to dwellings.

Mr. MacSharry

I am sorry I misled the House. I said 70,000. It should be 170,000.

Mr. B. Desmond

I said 19 out of every 100 and 170,000 out of roughly 850,000 makes a lot of people. In other words, putting it crudely, the worker Deputy Sherlock spoke of, the man with gross earnings of £120 per week, which is away below average earnings of £145 a week, living in Mitchelstown or Mallow or Charleville or any town in north Cork who would not be getting full factory wages but just about what the employer would get away with giving him, would benefit from this if he is married with three children. We are not asking the Minister to have this included in this year's budget; the money will be found in the 1983 budget.

That would solve the problem. There would be no division and Deputy Gregory-Independent would have ensured that the widows, the deprived, the poor and married men on low wages would benefit. The lowest 20 per cent of PAYE wage-earners would benefit. Private rented tax relief would not be given to the farming community because they do not come under the same tax system reliefs, nor would local authority tenants benefit because there is a differential rents system in operation. That system has a large number of anomalies in it because it is not truly a wage-related system. It is wage-related only in so far as it takes into account basic wages, not true earnings. Income tax takes into account actual earnings. If we want to reform the differential rents system, that should be done by this House, not just by NATO and the Minister at their annual jamboree. These are fundamental issues.

I suggest the Minister accepts the amendment to the amendment. This would mean Deputy Gregory-Independent would not push to a vote amendments Nos. 33b, 34a or 34b. If the amendment to the amendment were taken first, it would avoid precipitating any traumatic results in terms of a vote. We have spent all day discussing these amendments and I would like to be helpful. Deputy Gregory-Independent spoke very clearly and indicated his willingness to act in a constructive way. Neither he nor I knew what the cost of his first amendment would be until it was mentioned in this House — something of the order of £16 million for 1982 and £35 million in a full year. I would have great difficulty in supporting such a move and, accordingly, I ask the Minister to accept the amendment to amendment No. 33b which would give great relief and would be of considerable benefit to many people.

Mr. Fitzpatrick

(Dublin South-Central): The Labour Party, The Workers' Party and Deputy Gregory-Independent have put down amendments to this section. I find it very difficult to see any sincerity in the speeches made by Fine Gael Deputies who failed to table any amendments to relieve people paying rents in the private dwelling sector. I listened to Deputy Dukes and Deputy J. Bruton for a considerable time expressing concern for these people. If they were so concerned they should have done something about it in their January Finance Bill. The section dealing with relief for people over 65 years was included in that Bill, but they did nothing to help the rest of the people. Circumstances have not changed and financial circumstances have not improved since then. If they could not see their way to providing for these people then, I do not see how they can expect the Government to do so now.

I read many of Deputy B. Desmond's speeches when he was very active in the Department of Finance. At that time he should have asked his Minister for Finance, Deputy J. Bruton, to include these amendments. The situation in the private dwelling sector is causing grave concern. I can see merit in the proposals put forward, but I know from experience that any improvements which have been introduced in this House, whether through the Department of Social Welfare, the Department of Health, the Department of Labour or AnCO, were taken step by step. We have taken a first step in this Finance Bill by providing a concession for those over 65 years of age.

A look should be taken at rents paid for private dwellings. I have always been concerned about this problem. I represent a Dublin constituency and can see the enormous rents being charged. We should set up an inquiry to look into the rents situation. There are many people in this city paying exorbitant rents for the accommodation offered. A future Finance Bill could make provision for them.

People buying their own houses are given a tax concession on the interest they pay. If we were to grant the concession in this amendment we would have to ensure that we were not encouraging landlords to further increase their rents. That would serve no purpose except to enhance landlords' incomes. Landlords are not properly registered and we should have a comprehensive register. We will be taking a step forward in this area when we pass the Landlord and Tenant Bill and we will also have a rents tribunal. This problem is so important that it should not be tackled on a piecemeal basis. If concessions are given, they should be given to those in most need. We should have a list of registered landlords and we should lay down certain standards. This is something we will have to do eventually.

As I said, I see merit in these amendments. Deputy Dukes and others said the rebate based on the 1982 income would not be given until 1983. It may not be paid in 1982 but the charges will be incurred during 1982 and the rebate will be given in 1983. I am convinced that any Minister for Finance framing future budgets would have to take into account rebates which would have to be paid at the end of that financial year and budgeted for in the current year. It would be a good budgetary proposal to take it in the current budget, to pay the rebate at the end of the year and to carry on in the following year with the same kind of proposal. Implementation of Deputy Desmond's amendment would cost in the region of £5,500,000——

Mr. MacSharry

£7 million.

Mr. Fitzpatrick

(Dublin South-Central): If a rebate has to be given at the end of the financial year provision should be made for it some time during the year. Deputies will have an opportunity during the year to make proposals to the Minister regarding this matter. I accept that there is merit in what is being proposed but all implications must be studied. If we establish in the Finance Bill the provision to give the concession to those over 65 years, I have no doubt that the concession will be extended in future years. This has been the practice in the area of social welfare.

I have no doubt that if anomalies arise they will be corrected and any loopholes will be closed. If we introduce the provision this year the Minister for Finance will be able to build on it in future years. I know many people who are paying very considerable rent for one or two rooms while others who buy houses get tax relief. However, we must be careful in the way we introduce the concession being sought. Otherwise there will be a chaotic situation for the Minister for Finance and the Revenue Commissioners. We must establish clearly what exactly is the situation with regard to landlords and rents charged and, above all, we must make sure that when the concessions are given they will go to the people who pay the rent. We must make sure they are not an encouragement to landlords to increase the rents.

I accept that there is merit in the proposal but it needs much further examination. We have made a start this year and I hope that next year the Minister for Finance will consider the matter to see if it is possible to include other people who pay rent for private dwellings.

Mr. G. Mitchell

After listening to Deputy Fitzpatrick and others it appears to me that everyone in the country has the right to make submissions or to have a view on what should be done with the amendments except the elected Members of this House. I am not too concerned in this section to deal with suggestions made by my constituency colleague about tribunals and so on. My view is that we should do what we were elected to do, namely, to deal with this legislation in a reasoned and reasonable way and to consider amendments in that light.

All we have heard so far is innuendo, heckling and all kinds of nonsense from the Government benches with regard to reasonable arguments that have been put forward in the House. So far as I am concerned, I have to look at the matter in the light of overall budget strategy and in the light of the reasonable arguments that have been put forward. The Minister's comments on mechanisms and consultation with the Revenue Commissioners are boloney. It is our job as legislators to decide what goes into a section of a Bill and if there are difficulties at a later stage in administering the legislation it is a matter for those concerned to take it up with the administration of the day. It is a matter for this House to decide on the legislation we consider is appropriate for the people who elected us.

I do not accept what the Minister has said. In fact, all he did was to mumble something about mechanisms. I ask the Minister to give us a clear indication of where he stands, and if he is not in the position now to say where he stands on the section will he indicate to the House his overall attitude and take up the matter on Report Stage? This would leave Members on this side of the House in a better position to consider the section and the amendments. If the Minister is not prepared to accept any of the amendments or the figures mentioned in them — the most recent was the figure of £2,000 given by Deputy Desmond — will he indicate what figure he is prepared to accept? Is he prepared to go away and consider the arguments that have been put forward with a view to putting something before the House on Report Stage? At least this would give the House an assurance that he is taking account of the serious contributions being made here.

The amendments have been put before the House in an orderly way but the only difficulty is that they have not come from Dublin West in the middle of a by-election or from Galway East prior to a by-election. If they had come from those areas the Minister would have no difficulty in finding the money, and a lot more money with it. I do not accept any of the nonsense thrown out by the Minister in relation to this section.

Mr. MacSharry

I do not accept what the Deputy says.

Mr. G. Mitchell

If the amendments emanated from Galway East there would be no difficulty. Let us have a reasoned argument from the other side. Then Members might be able to make a clear decision and get on with the business of the House. From what the Minister has said it is very difficult to accept what will be the cost. Quite honestly, there is distrust on this side of the House of anything emanating from that side of the House in relation to figures. That is something the Government have brought upon themselves.

Mr. MacSharry

I reject totally what the Deputy has said. The figures were given to me by the Revenue Commissioners and, if the Deputy is accusing me, he is indirectly accusing the Revenue Commissioners. The figures I have used throughout the day have been given to me by the people on my right from the Revenue Commissioners.

Mr. G. Mitchell

I have every faith in the Revenue Commissioners. My distrust is with regard to information provided by Ministers and the way it has been provided and from my own unpleasent experience to date.

Mr. MacSharry

The Deputy said he questioned the figures.

Mr. G. Mitchell

I questioned the amount mentioned by the Minister.

Mr. J. Bruton

A person is entitled to question a figure.

Mr. MacSharry

The Deputy doubted the figures because I gave them.

Mr. J. Bruton

That would be unfair.

An Leas-Cheann Comhairle

Deputy Mitchell commenced his contribution by being critical of all contributions made beforehand. I ask the Deputy to direct his attention to the amendments before the House.

Mr. G. Mitchell

On a point of order, could I correct you, Sir?

An Leas-Cheann Comhairle

The Deputy will not correct the Chair, he is not entitled to do so. He will proceed with his contribution.

Mr. G. Mitchell

If the Leas-Cheann Comhairle is so concerned with order, he should have asked the Minister not to keep interrupting.

An Leas-Cheann Comhairle

The Chair will take no impudence from Deputy Gay Mitchell. Will you resume your seat? I am informing Deputy Mitchell that if he does not direct himself to the terms of the amendment before the House, the Chair will take action. I am asking him to follow the good example which he claimed to be setting when he initiated his contribution.

Mr. G. Mitchell

I am withdrawing from the House in protest at your outrageous chairing of this House.

An Leas-Cheann Comhairle

The Deputy is at liberty to do that. Thank you very much.

Mr. N. Andrews

We have heard much innuendo, suggestion and hypocrisy earlier on on this amendment. Last January we had a budget introduced in the House and there was a lot of talk about financial rectitude. Garret the Good was in charge and there was going to be no wrong done in the House. Deputy Bruton said that under no circumstances could anything coming before the House be changed. They accuse us of hypocrisy. We have amendments which will cost the taxpayer over £140 million. There are headlines in today's Evening Herald which suggest that the Government are over-spending; yet Fine Gael, with unbelievable hypocrisy, are conducting a smear campaign to which I referred earlier ——

An Leas-Cheann Comhairle

I appeal to you, Deputy Andrews, to make your case in less emotive terms and to direct your attention solely to the amendments before us.

Mr. N. Andrews

This hypocrisy is sickening. Deputy Dukes addressed the House in a very confused way and then Deputy Desmond discussed the amendment to the amendment. I do not see any great disagreement between us and any other Members of the House. The amendment is very acceptable to most Members but I find it very difficult to see how any Member could introduce these amendments and not suggest that there is difficulty in private rented accommodation. Young married couples seeking temporary accommodation have difficulty in finding homes because they have or are expecting a child. An English person or a Pakistani cannot get accommodation because of their accent or the colour of their skin. This amendment has been brought into the House merely on a monetary consideration and not on humanitarian grounds. I object to it because it does not deal with the underlying problems of rented accommodation. The great difficulty is that landlords and landladies are not subject to legislation in respect of discrimination and those who are anti-family. I suggest to the proposers of the amendments that they withdraw them on the basis that there is a need to look at these aspects in conjunction with their amendments. I do not disagree with Deputy Gregory-Independent on most issues, but the whole area of rented accommodation should be dealt with and not merely tax relief. If Deputy Gregory-Independent could introduce a Private Members' Bill that would consider the human aspect and the appalling lack of accommodation for young married couples, the price of land——

An Leas-Cheann Comhairle

The Chair cannot allow the Deputy to bring the price of land into this amendment.

Mr. N. Andrews

The price of land is directly concerned with rented accommodation.

An Leas-Cheann Comhairle

The price of land is a very important matter, admittedly, but the Chair is at a loss to see why we should have a discussion on it in respect of the amendment before the House. I ask the Deputy to accept that.

Mr. N. Andrews

The whole area to which we are referring is inter-connected. The price of land dictates the price of the house, the price of the house dictates the price of rent and there are discriminatory practices by landlords in renting their accommodation.

Mr. Fitzpatrick

(Cavan-Monaghan): The right of the Fine Gael Party to intervene in this debate or to make a contribution in support of a relief in income tax for people who have not got houses of their own and who are forced by one circumstance or another into renting houses seems to be questioned by Members of the Government party. They seem to think we have no right to make a contribution on this. We have a perfect right to do so. Deputy Bruton, when he was Minister for Finance, was the first Minister to write into a Finance Act a provision which gave relief to tenants of rented dwellings. It is high time that such a provision was made. I go further and say that, if in the past there were wrongs and necessity for such relief in respect of income tax, in recent times the necessity for such relief has been increased and is much more apparent.

The house building industry is about to come to a halt. I met representatives of the building industry yesterday evening and they told me that men are being laid off all over the city. In Cavan, the biggest builder has laid off 50 men over the weekend. If that is any indication of what is happening all over the country the building industry is grinding to a halt.

At a time when we have more young people in the country than ever before, when people appear to be getting married younger than they ever did before, requiring more houses, we shall have an acute housing shortage. We are now in a free and open market and it has been established by decisions of the Supreme Court that rent restriction, as it was practiced here since 1914, is no longer permissible in accordance with our laws. All this seems to suggest to me that we are going to have a situation in which rents will be higher, in which people will be forced to pay rents they cannot afford. Regrettably, and I say regrettably, we have reached a stage at which we need far more local authority houses than ever before. In years gone by the trend here was towards owner-occupied houses. The trend seemed to be that young people wanted to build their own homes some distance from a town, look after them and take a pride in them. I suppose they still have that earning but nobody can convince me that they are able to afford the mortgage repayments to provide themselves with such houses even if they could get the necessary mortgage finance. All that seems to me to impose a new obligation on our legislators and indeed on society in general to make up in some way for this new demand on householders, people who have to live in houses, and everybody must. I cannot think of any better way of coming to the rescue of such people than by granting them the relief from income tax these amendments propose. I am speaking now in a general way about the amendments.

Whether people on the opposite benches believe it or not I have said I seriously and honestly believe that since the first day the PAYE system of income tax was introduced there was a huge obligation on our legislators, whether they be Fianna Fáil, Fine Gael or Coalition, to devise a fair system of taxation. It is high time that this little pocket here was removed from suits and that people paid on their income no matter what that income amounted to once it reached ——

An Leas-Cheann Comhairle

Deputy, what we are discussing here is the question of relief of tax on rent paid on private dwellings. I think the Deputy has an appreciation of Committee Stage debate and will realise that, on that, we are not talking about relief on mortgages, nor are we talking about the housing industry or PAYE. I would ask the Deputy to direct his attention to the relief proposed in respect of private rented dwellings.

Mr. Fitzpatrick

(Cavan-Monaghan): I seem to get into little discussions with the Chair far too frequently. I have no desire to be disorderly or unruly. I have been a Member of the Oireachtas now approximately 21 years, I have been in this House about 16 years and I do not believe I was ever ordered out of the House never mind be suspended in that period.

An Leas-Cheann Comhairle

The Deputy will appreciate that the Chair is not accusing him of or indicating that he is being disorderly. What the Chair is doing with Deputy Fitzpatrick is what he has done with all speakers to date, in endeavouring to direct his thoughts and attention to the relief of tax on rent paid on private rented dwellings. When the Deputy examines the Official Report at a later date I think he will share with me the decision that he was not as relevant as he might like to have been.

Mr. Fitzpatrick

(Cavan-Monaghan): I will try and be very relevant, Sir. It would be possible to enforce the rules of debate on Committee Stage to such an extent that one would merely be confined to saying “yes” or “no” and I think the Chair would agree with me that that would be reducing things to an absurdity. If there were plenty of cheap houses in the country, if people had endless money and the building industry was flourishing there might be no necessity for this relief. But I make the case — I shall not labour it indefinitely or to the extent of nausea — and argue strongly that, in prevailing conditions, with a huge population of young married people seeking houses all over the place, with the price of houses gone out through the ceiling with people being forced into flats, this constitutes no more than the introduction of equity into the taxation system. My colleague, Deputy Fitzpatrick (Dublin South-Central), says there is undoubtedly good example the National Coalition Government introduced into the January budget which will be followed. I am sure it will but that is a case of “live horse and you will get grass”. A further effort should be made now, in this debate, to give some relief to the lower paid or income group which is what Deputy B. Desmond's amendment seems to do.

Deputy Gregory suggested for people under 65 an income of less than £7,000. Deputy Desmond goes considerably lower than that. This is not giving something to well-off people. This is a proposal to do something in ease of people who are getting it more than hard to live, more than hard to pay rent and make ends meet. If that has to be done by biting into the better-off a little, then let it be done.

The Minister should meet the amendments which have been debated here at some length. There would be some hope were the Minister to come in here and say: "Look I cannot do that but I am prepared to do this as a token of my concern for the people involved". Even since January last things have got worse, even since January prices have gone sky-high.

An Leas-Cheann Comhairle

I might inform the Deputy that Deputy Gregory's amendment to which he referred has been withdrawn and that the other amendment, No. 34, has also been withdrawn.

Mr. Fitzpatrick

(Cavan-Monaghan): No, we are discussing amendment No. 33b.

An Leas-Cheann Comhairle

The Deputy referred to the figure of £7,000 in Deputy Gregory's amendment No. 33a which has been withdrawn.

Mr. Fitzpatrick

(Cavan-Monaghan): That was his first one but we are now discussing amendment No. 33b.

An Leas-Cheann Comhairle

Yes. But the Deputy referred to his first one earlier on.

Mr. Fitzpatrick

(Cavan-Monaghan): I may have but——

An Leas-Cheann Comhairle

Inadvertently, all right.

Mr. Fitzpatrick

(Cavan-Monaghan): I have put a little ring around the other one so that I will know that is the one we are discussing. If the Minister cannot see his way to accept either of these amendments I invite him to consider coming in here after tea and perhaps saying: “I am prepared to do that” but his attitude is — not an inch. Sums of £30 million and £16 million have been mentioned. I think the Minister himself gave the cost of the latest proposal as £7 million. I invite him to come in here with a reasonable figure. I do not think he could go much lower than Deputy Desmond's figure.

Mr. S. Brennan

The whole question of rented accommodation and the allowances given for it is a major social question. I believe the House should find time at some stage to conduct a debate on the whole area of rented accommodation and the major social difficulties surrounding it. I feel to jump at it in a quick bite on the Finance Bill does not do justice to the real difficulties felt by people in rented accommodation.

With regard to the particular amendment to amendment No. 33b recommending the figure of £2,000 against the earlier figure of £4,500 I hold the view that giving allowances of this nature in this way will almost certainly have the effect, which we are not trying to achieve, of putting up rents for people in those rented dwellings. We could find ourselves legislating a subsidy for landlords if it is not accompanied by a wider package of rent laws. For example, one such rent law, which I could suggest, is something to do with the standards of such accommodation. If you are going to give allowances perhaps you should not give them on every little room. Perhaps we should say that we will give an allowance on rooms which conform to a certain standard of living, fire regulations and all the usual things most people take for granted. Many of those little dwellings we are talking about do not live up to those standards.

I would fear that broadening the net above 65 years, which is obviously a good idea and is a step in the right direction, in taking in the people under a certain figure would have the effect of putting up the rent. I believe this is a major social question which the House has not addressed itself to for many years and should do so in the future. I do not believe that a subsidy is the answer. I feel that control of rents and control of the standard of accommodation would be a much more sensible approach to it. All this needs a broader look than is possible under an amendment to a section in the Finance Bill. I feel it does not do it justice.

This brings us back to the broader question. Every single section in this Finance Bill could be amended by an extra £7 million or £20 million. We had one last week about the exemption limit. There could be reasons given for raising the exemption limit. Those are all excellent amendments and ideas but we come back to the basic principle that if you have a budget problem and a deficit problem and are committed to reducing it you have to say "no". While I welcome the 65 year old allowance, I ask that at some future date we get down to having a look at the overall social question of rented accommodation. I feel we should not accept this particular amendment because it would have this effect which we would not intend.

I would like to comment on something Deputy John Bruton said much earlier. I welcome his philosophical approach to the overall question of rented accommodation versus private ownership. We have to be careful about going too far in the other direction. I take the view that one of the best ways to redistribute wealth, a phrase we all pay lip service to occasionally, is to encourage as many people as possible, through State assistance and so forth, to own their own homes. If we go too far the other way and over-concentrate on helping everybody to get into rented accommodation and decide that this is suddenly the answer to all our problems, are we not centralising the power and the wealth in the country into the handful of people who own the rented accommodation and the master blocks of apartments? Is that not centralising the wealth of the country into fewer and fewer hands? The people who advocate strongly the rental system should be a little careful that this has not the effect of concentrating wealth in a few hands, which is not the way we wish to run our society. We want to spread the wealth as broadly as we can among the people who need it. I would like to see a debate sometime on the whole social difficulty of rented accommodation. In the meantime, I feel it would be unfair to interfere with the planned budget deficit by giving away too many millions of pounds and I oppose the amendment.

Mr. Noonan

(Limerick East): I would like to make a few points on Deputy Barry Desmond's amendment to Deputy Gregory's amendment. The principle, which is being sought, has already been incorporated in the Finance Bill and in the budget introduced to the House by Deputy John Bruton. I believe there is agreement on all sides of the House that people over 65 in private rented accommodation should get such relief. We are now discussing if this should be extended to other categories. It is customary to think of the old as being the group in society who are most at risk. Poor people are at risk particularly in relation to private rented accommodation. This side of the House fully endorse the idea of a tax allowance for people over 65 who are frequently retired and in bad circumstances but old people have not a monoply of poverty and misery in our society.

There are other sections in society who are on low incomes and who would be helped substantially by an income tax allowance along the lines suggested in Deputy Gregory's amendment and in the amendment suggested by Deputy Barry Desmond. Many young people are very poor. Young people aged 18, 19 and 20 years who have to leave their homes in different parts of Ireland, travel to Dublin and live in rented flats on low incomes are frequently very badly off. An allowance against their income tax would be very helpful to them. I believe that all sides of the House agree that the man on £120 and £125 a week who would benefit by Deputy Desmond's amendment, with two or three children living in rented accommodation is being discriminated against vis-á-vis the home owner on equivalent wages or on higher wages. We have almost elevated to the level of a philosophy our help for home owners and for people to purchase their homes. There is a lot of benefit available now under the income tax code to people who acquire a mortgage and become home owners.

Some modifications to this were suggested by Deputy John Bruton in his budget. These were incorporated in the Fianna Fáil budget of 25 March but they were subsequently dropped in the Finance Bill. Income tax relief to the home owner is now being given at the highest marginal rate of 60 per cent. Another variation between the two budgets is that income tax relief of £9 million on repairs to houses is now restored but those in most need, the people who cannot afford to buy a house——

Mr. MacSharry

£1 million.

Mr. Noonan

(Limerick East): That is a significant but not a major amount.

Mr. MacSharry

To help what Deputy Fitzpatrick was talking about, the building industry.

Mr. Noonan

(Limerick East): I do not see the connection.

Mr. MacSharry

The Deputy should ask him.

Mr. Noonan

(Limerick East): I do not necessarily disagree with the Minister bringing this in. We have a philosophy that we want people to own their own homes. It is very difficult for people to do so nowadays but we are not giving much help to those who rent. I question the view from the Government side of the House that the fact that there is no register of landlords would prohibit us from extending this benefit. One of the effects of this, if it was extended to all those who rented private accommodation, would be that very quickly we would have a register of landlords. Those living in private rented accommodation would surely claim the allowance and, consequently, a very accurate register would be in the possession of the Revenue Commissioners.

When we are considering the cost of the various amendments it should be borne in mind that they are gross cost figures. The acceptance of this suggestion would mean that an enormous number of tax evaders would then come to the notice of the Revenue Commissioners. We all know that those who have accommodation to rent frequently do not declare the income from it. Very often the amount of rent received is watered down in tax returns. While I accept that the Minister's figures are accurate in gross terms, I doubt if they have any substance at all in net terms. It would not surprise me if the Minister ended up with more revenue following the introduction of this concession to those on low income.

I would like to see the principle granted to those over 65 extended to all taxpayers. I do not have the information to put forward a suggestion as to the level of income one should pitch the concession at but Deputy Desmond's amendment, substituting £2,000 for £4,500, looks reasonable. It seems to strike the right balance of income. It would benefit those most in need without being extravagant and giving an allowance where one was not necessary. I should like to ask the Minister to consider our contributions in the spirit they have been offered in and if unable to accept our amendment he should bring forward one on Report Stage to incorporate the ideas that have come from all sides of the House. In the twelve months I have been a Member of the House I have not seen such agreement on anything. Such a move would be welcomed by all in a non-contentious way. Acceptance of the amendment is one way of ensuring that the Finance Bill progresses systematically although slowly through the House.

Mr. MacSharry

I should like to remind the Deputy that Deputy Bruton on 27 January said that in present Exchequer circumstances it could not be afforded to give such a concession right across the board. He said that, in order to focus first on the area of greatest need, the allowance would be made available to taxpayers aged 65 and upwards. That statement was made by Deputy Bruton when he was Minister for Finance and that provision is contained in the Finance Bill. Unfortunately, the discussion on this matter has gone on for a long time. On many occasions I refrained from replying to some points because I did not wish to delay the proceedings but the discussion has been informative.

The principle of the intention in the amendments is something we do not disagree with. It is the timing, the cost and the implementation of such measures that need to be debated in greater detail. The cost of the amendment which proposes an income limit of £2,000 would be £7 million in 1983 and £11 million in a full year. All Deputies should realise, particularly Deputy Bruton and other experienced Members, that proposals such as this are more appropriate to the budget. It is a budgetary measure which is relevant to the 1983-84 tax year. Therefore, it is more appropriate to the budget for that year.

I do not wish to go into all the arguments that have been discussed here during the last five hours but I have been asked by a number of Members to have another look at this before Report Stage. I can agree to that but I am doing so — I want this clearly understood — without commitment. I have been asked to have another look at the matter and I have been given other ideas which may be described as a commitment or not in regard to further budgetary measures but, as I have said, I cannot anticipate budgetary decisions for the future. I do not wish to appear unco-operative and say I will not have a look at this matter between now and Report Stage. I will have a look at it but it will have to be accepted without commitment. I am prepared to do that.

Mr. L. Cosgrave

I welcome the Minister's remarks. It appears that persistence has paid off. The many contributions today highlight the need for relief in this area for those who pay rent. I hope the suggestions, if accepted, will benefit those who pay rents, which in cases are exorbitant, without getting any recognition for the money paid. I accept that many people are in a position to pay the rent but there are many on low incomes who are paying high rents having regard to the type of accommodation offered. In some cases the rent is grossly excessive and unjust. I say that by way of general criticism. Many landlords have maintained people in good accommodation down the years and been paid a just rent but there are others who abused their position in regard to accommodation. As a result we have had a big number of people seeking local authority houses. I hope the Minister's recent statement will afford the House an opportunity of looking at it further and in the light of the amendments which were made extend relief as far as possible to more people whether by age, income or a combination of both. This is very important.

Progress reported; Committee to sit again.