asked the Minister for Finance when it is proposed to introduce tax credits as promised in the Fine Gael-Labour Joint Programme for Government.
Ceisteanna—Questions. Oral Answers (Resumed). - Tax Credits.
3.
I would refer the Deputy to my Budget Statement of 25 January 1984, when I indicated that a changeover to tax credits is not a practical option in the short term because of the resources required to cope with the administrative task involved and because the introduction of credits would be inequitable when income tax rates are high. These considerations remain equally valid today and there is therefore no immediate prospect of a tax credit system being introduced.
The Minister has indicated that they have now no prospects of introducing this. Was the Minister not aware of the high tax levels and of the cost of introducing tax credits when the Programme for Government was arranged between his party and the Labour Party? What has altered the situation in the meantime?
I have given the answer as to why in my view there is no immediate prospect of a tax credit system being introduced. It is based on a number of administrative considerations in the meantime and principally because the introduction of credits would be inequitable when income tax rates are high. I know that the Deputy will agree that that is the case.
I do not agree that that is the case. I have asked the Minister, and he has not replied to it, the difference between the situation now in 1984 and at the end of 1982 when the Programme for Government was thrashed out between his party and the Labour Party.
A question, please.
A promise was made by that party and they agreed to come together in Government on the basis that they would introduce tax credits.
The Deputy should ask a question.
The Minister did not seem to understand my question when first I put it to him. Why does he consider the tax situation is any different now from what it was in 1982 when exactly the same economic situation existed and similar high rates of tax existed and the cost——
The Deputy should resume his seat and let the Minister answer the question.
——presumably was not low. Either the Minister is not telling the truth or his party and the Labour Party told lies when the programme was introduced.
It was not presented as a matter of immediate action in the programme. I am sorry that I did not hear the second part of the Deputy's question the first time he raised it.
Everyone else heard it.
There was a great deal of to-ing and fro-ing. I would hear it better if Deputy O'Kennedy did not interrupt. As to the rest of it, I do not accept that the situation is no different now from what it was at the end of 1982. As the Deputy knows, we have made a number of changes in income tax bands, allowances and rates since that time, so from the point of view of the income tax payer the system is now less burdensome than it was at that point.
Will the Minister not acknowledge that what he has said just now to the House, that the income taxpayer is paying less than he was in 1982, is patently utter nonsense?
That is not what I said.
Will he not acknowledge that he has also indicated that his own policy failures prevent him from introducing this commitment? He said that when income tax is high it would be inequitable to introduce it. Is it not the same Minister who relies on that as an excuse who has brought income tax to the point where it is now? Have we not reached a nonsense when the Minister relies on his own failures as a justification for not introducing his commitments?
The answer to the first part of the question is "no". The answer to the second part is "no" and the answer to the third part is "no". I observe that Deputy O'Kennedy is persisting in his old fault of confusing rates with yield.
Before I call the next question let me appeal to Deputies to refrain from making speeches and to ask short questions.