This panel of resolutions exposes the sham of the Progressive Democrats' tax reform policies. It is absurd that we have to scrape the pot in the manner that is being suggested in some of these resolutions to find a few bob to fund this obsession with reaching ultimately the 25 per cent standard rate of tax. Whether it is 27 per cent or 48 per cent is almost irrelevant. What matters is at what stage you become liable for tax in the first place and how long you remain on the standard band before you go to the marginal rates. They are the issues but they have not been addressed. I remember specifically that the Minister of State with responsibility for environmental protection, Deputy Harney, was trotted out because her soft focus was more appropriate than that of former Deputy McDowell. She told us there was £2 billion in these disgraceful tax shelters and various reliefs and tax foregone to industry that would be mopped up to fund the tax reform programme. It is almost unbelievable that we are now being presented with an attack on the minimalist measures that have been made to bring about a share owning democracy, which I thought the Progressive Democrats were in favour of. I thought the purpose of profit sharing schemes was to involve workers in taking out shares in their own enterprise.
I had to listen until the cows came home to the former Minister for Agriculture and Food, Deputy O'Kennedy, telling me about the fantastic number of shares he was making available to ordinary workers in the sugar company. He made a great many shares in the sugar company available to people who were not ordinary workers, but we only discovered that subsequently. In addition the Government are to abolish the shares option relief, yet they are trying to present this as some kind of concession to equity when, in fact, it will have the opposite effect. Surely more economic democracy, greater worker participation and more industrial democracy are elements of our industrial revival. It is disgraceful that the Government have come up with this measure for the sake of collecting minimal income. We have not been given the opportunity to assess how much it will be under each heading. This ought to be vigorously opposed. I suspect — I do not wish to go into the export sales relief at Shannon — that if Tony Ryan was in the Financial Services Centre at the end of Gardiner Street he would not be expected to deal with a measure like that being proposed but I will leave this for Deputies Noonan and Carey to deal with.
In 1988, 78,383 new cars were registered and it is estimated about half were company cars. The proposal to make such a drastic change in the manner in which benefit-in-kind is calculated will impact on many ordinary workers who need a car for their job. I spent a good deal of time in my former job negotiating on this with employers. To increase the threshold from 20 per cent to 30 per cent of the market price of the car, as proposed, and to raise the mileage allowance will impact severely on many people who need a car to do their job. Ordinary workers will be affected. It may be that this was abused in certain areas, but I suggest the abuse could be tackled by a mileage threshold. Where workers need a car to go to work, or in the case of commerical travellers who absolutely need a car, this measure proposed is regressive and the former Deputy McDowell should be told that. We are talking about a tax yield of £16.2 million this year and £27 million in a full year, an extremely large tax take when one considers the pittance being raised from other measures. It is in stark contrast with the capital allowances for motor cars used for private business. The threshold for capital allowances for the self-employed engaged in private business has been enhanced from £7,000 to £10,000 but the PAYE worker who needs a car for his job is punished.
As Deputy Noonan said, the suggestion on pension refunds is extraordinary. Only a fool would cash in his pension half way through the period of the scheme. Nobody would do so unless forced to do so through unemployment. Indeed, this is a subject very close to the heart of Deputy Gilmore and me. A person of 40 years of age would not take out contributions accumulated over a 15-year period from a pension fund. It may be that the pension will not buy more than a box of matches in 25 years time, but it is bad economics to take it in the form of a refund. The only person who would do this would be a person who is made redundant.
