Finance Bill, 1995: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Before the debate adjourned I said the speech of the Minister for Finance revealed that he has a very strange understanding of his role. Given his central role in Government he needs to maintain public confidence. One sure way of not doing so is to lay out policies in a number of scripts and then ignore them. His speech yesterday was significant because it did not deal with the Government's lack of control over public spending and it sought to defend an unprincipled proposal to punish some people for the crimes of others. Section 153 is not acceptable.

During the budget speech in February I made a number of predictions which angered the Minister, and it gives me no great pleasure to say that they have come to pass. The Minister claimed in his budget speech that there would be a 6 per cent increase in current spending in 1995 over 1994. I pointed out that was misleading because there was no way he could meet that target. I also pointed out that the creative accounting recently used in the case of the Housing Finance Agency would, no matter how he juggled it, add to the overall national debt, and that has happened. I said that spending for 1995 would be about 10 or 10.5 per cent, and it seems that figure will be realised. It was made clear to the Minister at the time of the budget that spending would be about four times the rate of inflation, which is now the case.

I pointed out to the Minister at the time of the budget that he had ignored the huge reduction of EU transfers to Ireland, which amount to in the order of about £500 million, and possibly twice that figure. No account was taken in the budget or in the Finance Bill of the fact that after 1999 we will be without those significant transfers. The Minister must urgently build those sums into his calculations for the future.

I pointed out to the Minister in February that his budget policies would lead to higher interest rates, and that too has happened. If he had retained the policies pursued since 1987 of steadily reducing income tax and the current budget deficit, the recent increase in interest rates would not have been necessary. Thankfully the rates seem to have stabilised. When it is believed in the marketplace, which is extremely sensitive, that the Government is not serious about its budget targets, domestic interest rates are adjusted accordingly. It gives me no pleasure to remind the Minister that the predictions made by this party a few short months ago appear to be coming to pass, although from the nation's point of view it would be better if some of them did not come about.

Since the budget the Minister has continued to allow expenditure to increase. He tried to pretend that spending was not increasing by using creative accounting gimmicks, such as the National Housing Agency mortgage sale, the selling of a State asset from one to another part of the State and requiring the other part to borrow the money to buy it from the first part. That is simply creative accountancy and I do not believe anybody is taken in by that type of financial misbehaviour. The additional expenditures which have come to light since the budget was announced will lead to excessive spending in 1995-96. The Minister said that in 1996 he would be able to restrict borrowing to 2 per cent, but it is clear he will not be able to do that. In 1997 we will be dealing with substantially greater figures being off-line in budgetary terms.

Based on the record to date, according to my calculations, it is likely that the Minister's lack of control in this area will result in current spending being at least £200 million above the 1995-96 expenditure levels set out in the 1995 budget. The Minister predicted certain figures when he introduced the budget but it appears that when the final tally is made at the end of the year he will be at least £200 million off his high target. The increased expenditure level without increased taxation will bring Government borrowing to more than £1 billion, more than 3 per cent of GDP, unless the Minister decides to collect additional revenue by way of taxation or from the sale of assets. He cannot come into the House on the next budget day and tell the country that he needs to borrow £1 billion. He is likely to try to sell other assets in the course of the year to reduce that figure or to consider taxation increases. I do not believe he would be so politically unwise as to consider direct taxes, but I am sure he will consider indirect ones in a number of areas, perhaps in the motoring area. I heard earlier that taxes may be imposed on radios, walkmans and other such goods. It seems the Minister will take that course unless he wants to announce to the House on the next budget day the need to borrow £1 billion. It is a long time since this country had to borrow £1 billion as a result of one year's budgetary provisions. It is tragic that we have been brought back to the position where we are into a four figure borrowing level when it had been reduced to a manageable three figure level.

The markets have become extremely concerned by the Minister's lack of control in this area. Yesterday IBEC released a critical commentary on the state of and outlook for public finances. Irish exporters have complained bitterly about the exchange rate policies being pursued by the Government. Unfortunately, there has been little or no response from the Government on that issue other than to reiterate it is monitoring the position, but that is not an exchange rate policy. We require clear explanation and exposition of what strategy we are following on exchange rates. It is not enough just to monitor the situation because real exporters must deal in the marketplace and need to know the Government's policy in this area. The Minister has ignored these problems either because he does not know how to deal with them or does not want to keep a grip on public spending. I notice whenever he is cornered into answering a question on this issue he tries to lay out the responsibility for doing the job, but the figures keep on rising. There is a type of rake's progress operating here. The Minister appears to want to do something without finding the courage to do so. I am not sure where he is getting his political advice. but he needs to think out the position again. The Minister's lack of control in this area of public spending is matched only by his lack of any recognition of the increased cost of his policies in higher interest rates and higher exchange rates. Like all good socialist intellectuals the Minister for Finance can rationalise whatever action he takes, including maintaining contradictory policies.

I thought the Deputy was going to suggest he was one of the socialist intellectuals.

No, but one out of two is not bad. The Minister has convinced himself that he is managing the Government's finances well, although current spending this year will be well above comparable 1994 levels. He will try to conceal this further by creative accounting to hide the extent of the spending spree. The off balance sheet Government decisions of recent days are among those creative accounting mechanisms to which I referred. As long as the country is made aware of those, it will not be taken in by them.

The second major failure of the Minister is his proposal to make it a crime for certain people not to inform the Revenue Commissioners when they have reasonable grounds for believing that a company has not complied with the tax Acts. Our legislative system has developed steadily and solidly over many years. It is designed to provide a reasonable balance between the rights of individuals and the needs of society. In spite of major difficulties in ensuring our society functions properly and that the authorities get proper support from citizens, the Legislature has properly believed that there were set limits beyond which citizens should not be required to take action.

Under our system of democracy citizens are not the policemen of the Government, the agents of the State or the agents of institutions even where they have reasonable grounds to believe a serious crime has been committed by a particular person or persons. This snitch section 153 purports to turn citizens into agents of the State and they are open to criminal prosecution if they do not advise the Garda of any belief they may have that a particular person committed any crime, including that of murder. It is not a crime not to report one's suspicions except in the tax area. There are good reasons why our system has been so structured. The Minister believes that he knows better and seems to consider that our system should be changed in order to force our citizens to be agents of the Revenue Commissioners. That is socialist intellectualism at its best. He has promoted section 153 without any regard to past thinking on the role of the citizen in a democracy.

The Minister's proposal is an outrageous attack on our citizens' rights. The heart of the proposal is to make it a crime for some person not to advise the Revenue Commissioners that somebody else has committed a crime. That is turning our democracy on its head and the populace at large into agents of the Revenue Commissioners, breeding hate and all sorts of tension in our society. It is an outrageous attack on citizens' rights and should be withdrawn.

Even if one accepted the principle of section 153, which I do not, it is oppressive that certain small tax advisers, others who give tax advice and professionals generally must report their suspicions to the tax authorities. Even if one accepted that principle, is it not extraordinary that the employees or management of a company, who may have cheated the tax man, are exempt from the proposal? It seems to be all right not to require the management or employees of a company to be responsible for reporting suspicions within the tax area but a tax adviser must do so, which is most unfair. It is also extraordinary that the Revenue Commissioners did not take prompt action where and whenever tax irregularities were identified. I agree with Members who complain that action was not taken on alleged tax irregularities within beef companies. Have the Revenue Commissioners or others taken administrative action to guard against this being repeated?

The Minister claims that the proposal in section 153 is justified by virtue of the findings of the beef tribunal. In the course of our debates on that tribunal I called specifically for action against those engaged in tax fraud; there is no excuse for not taking action in such cases. Any tax fraud identified by the findings of that tribunal should have been acted on by the Revenue Commissioners, Director of Public Prosecutions or any other person authorised to take action. Failure to act is simply not acceptable.

Neither do I accept that the section constitutes the proper or appropriate reaction to the findings of the beef tribunal since there is more than adequate legislation to ensure that companies provide proper tax returns and records if the Revenue Commissioners utilise the powers available to them. After a decade of tax Bills giving the Revenue Commissioners, in many cases almost draconian powers, nobody can be in any doubt about the need for tax compliance. To go a step further and tell the electorate it is not enough that the Revenue Commissioners have very strong powers, perhaps stronger powers than the Garda, to inquire into every aspect of one's financial dealings to ensure tax compliance is going too far. I object to an addition to that very strong code by requesting, not merely the Revenue Commissioners to do their job but citizens to bring stories to the Revenue Commissioners in an organised manner.

In the good old days there may have been a £100 reward for information advertised on a telegraph pole. Perhaps the Minister should have considered such a reward system if he wanted information about people's tax affairs. The Revenue Commissioners have extremely strong powers and should use them. They do not need the assistance of three million citizens to furnish them information through tax advisers. It does not create a healthy atmosphere to make it a criminal offence not to report on one's neighbours' financial affairs. That introduces a whole new concept in law. The public find this proposal so distasteful, not because they are in favour of tax evasion but because they are against the concept of reporting on their neighbours when the Revenue Commissioners have plenty of power to make any inquiry about tax evasion in any area.

If the Revenue Commissioners decide to investigate the financial affairs of any individual or company here, there is none they cannot tear apart. I can only conclude that the Minister has introduced the section, in a desperate effort to devise any measure that might advance the date of payment, thereby reducing the cost of excessive public spending. Perhaps he hopes to obtain extra revenue from the provisions of this section, thereby reducing his deficit problems.

The Minister has been less than frank in suggesting that the section applies to companies only. I fear the Minister's arguments on the need for this section will be recycled by him in order to extend its provisions to individuals. I abhor his proposal as oppressive, an attack on our civil liberties; indeed, the KGB would have been proud of it.

The Minister will not be forgotten for upsetting what people believe is the prudent balance reflected in our legal framework which constitutes the proper relationship between individual citizens and the State. This section is fundamentally wrong and should be withdrawn. The Minister has failed to prudently manage the nation's affairs and to exercise a mature sense of proportion in the conduct of his office. While he may be the first Labour Party Member to become Minister for Finance, based on experience to date, that is a luxury this country cannot afford a second time. It is very obvious that there is now no possibility of any tax cuts being implemented in 1996. Following ten years of steady reductions in tax rates it is tragic that policies are being reversed, ruling out any tax cuts in 1996, even to the extent of considering tax increases.

With the permission of the House I wish to share my time with Deputy Kathleen Lynch.

I am sure that it is satisfactory and agreed.

While many sections of this Bill are welcome, there are others where I should have liked to have seen significant improvements.

We in Democratic Left are very conscious that a rising tide no longer lifts all boats. In this respect I have in mind some constituents, lone parents, who asked me to calculate their net benefit from the social welfare budgetary changes. While the increase in social welfare benefit for lone parents is real, constituting a step in the right direction, it is rather small. Does the Minister agree that the lone parent's benefit being increased by 60p a week is not sufficient, bearing in mind that lone parents must bear considerable expenses and hardship? While conceding that the Government is going in the right direction, the increases are meagre.

I am concerned also about another constituent, a woman recently widowed, who invested money in a special savings account in a building society for two years, believing she would benefit from not having deposit interest retention tax levied on the proceeds. Then the Minister's budgetary proposal interfered with her planned income over the following year, as a result of which she has lost considerably. With regard to deposit interest retention tax and special savings accounts I draw the Minister's attention to the fact that there are some innocent people, with small, limited incomes, who had anticipated a yield from their small investments which has been affected somewhat by his budgetary proposals.

I ask the Minister to address this issue. While it may not be appropriate to the Bill before us it has implications for many people, including the innocent woman standing at a bus stop in O'Connell Street who was shot in the leg — 18 pellets were removed from her leg — during a bank robbery and who was awarded £224.49 by the criminal injuries compensation tribunal. This issue needs to be addressed as many people are making substantial claims for relatively minor accidents. My school friends and I suffered more serious accidents when we were growing up yet we never thought of making claims for compensation. This issue is particularly interesting when one considers the compensation paid to farmers for setting aside their land. In 1994 approximately 16,000 farmers were paid up to £10,000 each for setting aside their land while 31 better off farmers were paid in excess of £50,000 each for not working their land. This highlights the anomalies in the system which, hopefully, can be rectified by the Government.

I wish to refer to the new radom audits carried out by the Revenue Commissioners, an issue which is of particular relevance to this debate. In reply to a parliamentary question tabled by me the Minister said that no new random cases were selected for audit in 1993 and that he was advised by the Revenue Commissioners that certain factors made it impractical to include an element of random audits in the overall audit programme for 1993. One of the reasons given was the need to give taxpayers the opportunity to avail of the amnesty and to release staff to undertake amnesty related work. Many people who are supposed to be pillars of our society benefited to the tune of hundreds of million of pounds from this amnesty. I hope the Minister will ensure that the random audits of professionals, the middle class and the self employed which are supposed to be carried out will be carried out.

I find it very interesting that a person can be sent to prison for social welfare fraud while a person has never been sent to prison for defrauding the taxation system. In the past two years 79 convictions were secured, yet none of these people ended up in jail. Consideration should be given to the English and US systems under which people who defraud the taxation system have very severe penalties imposed on them.

I am a carpenter by profession and I have worked on many building sites in Ireland and Africa. I have been contacted by large numbers of building workers, painters, carpenters, tradesmen and general operatives who are caught in what I think is called the C2 taxation system. I am not 100 per cent familiar with the system but it seems to leave building workers in an unenviable position. These people are engaged in dirty, heavy and dangerous work and further consideration should be given to the way they are caught by the tax code.

I listened on the monitor to the contributions by Deputies from the Progressive Democrats Party which does not seem to be content with breaking the mould of Irish politics but which now seems set to break its own mould. This party of probity has criticised the provisions in the Bill which will make it incumbent on accountants, lawyers and others to report tax dodgers. I thought that everyone would applaud this wonderful provision. According to reports in the newspapers, Deputy McDowell believes that these provisions could seriously undermine the status of auditors as well as undermining Ireland's position as a location for industrial development. One expects that type of language from members of the Progressive Democrats but does Deputy McDowell seriously believe that Ireland's position as an investment location can only be maintained through the pay-as-you-like tax regime which was the hall-mark of previous administrations? The proper function of solicitors, accountants and auditors is to advise their clients on the correct application of our tax laws and in that regard on one in this House should argue that they should divulge the affairs of their clients. Section 153 seeks to ensure that advisers do not become accessories to crime.

There seems to be a perception on the Fianna Fáil benches that tax evasion is not really a crime. This perception was most evident in the granting of the 1993 amnesty. At least Fianna Fáil has always been consistent in its position, it has always viewed tax evasion as a mere breach of manners rather than a breach of the law. However, the Progressive Democrats stands accused of rank hypocrisy; the pay-your-way party has been transformed into the pay-if-you-wish party. For far too long the ordinary PAYE worker, whose taxes are deducted without the benefit of specialist advice, has been held to ransom by the "dodging classes", the self employed and big ranchers for whom tax evasion has become a profitable way of life. Before anyone contradicts me, I am not in any way suggesting that all self employed people and farmers indulge in tax evasion. However, there are rotten apples in every sector and it is up to us as legislators to weed them out. Tax evasion is not a mere misdemeanour, it is a crime. It should be remembered that every pound in tax evaded is an extra pound on compliant taxpayers, ordinary citizens and small businesses who pay their taxes in full and on time.

My colleagues opposite take a different view on this matter. Fianna Fáil has gone on record as championing the right to confidentiality of those who break the tax laws. This was a central aspect of the infamous 1993 tax amnesty when secret offices were set up in Harcourt Street so that the beneficiaries could slip in and out without being seen. Fianna Fáil seems to think that that amnesty was progressive.

Yesterday Deputy McCreevy clarified his view of tax offences when he referred to the "myriad of Mickey Mouse offences, some technical, envisaged by this section". I recall three or four years ago Deputy McCreevy happily boasting that he did not have to pay taxes at race meetings, it was one of those annoying little Mickey Mouse regulations with which the State was trying to make recegoers comply. In the Disneyworld of Fianna Fáil politics Deputy McCreevy plays Goofey to the tax evaders' Mickey Mouse. Unlike Deputies opposite I do not believe that failing to pay one's fair share of tax amounts to a Mickey Mouse offence. It is quite offensive.

Deputy McCreevy did not say that yesterday. The Deputy should read the full quotation.

I do not believe criminals have a right to confidentiality, nor do I believe those who aid and abet criminals — the professionals who must now report evaders — should be allowed get away scot free.

This provision of the Bill expands on the recommendations in the beef tribunal report. I am sure Deputies will not have forgotten that the beef tribunal unveiled what was probably the largest tax scam in the history of the State. which in large part might have been averted had section 153 of this Bill been in place during the relevant period. There has been a great deal of deliberate misinformation on this matter in recent days emanating from Fianna Fáil Members. In particular, we were told that the provisions of section 153 could apply to Members of the House. This is the kind of irresponsible scare-mongering that goes far beyond the normal give-and-take of democratic politics. Having read the relevant section in some detail I can only presume that the Opposition has stretched my colleagues' imagination to hitherto unimaginable lenghts.

My only criticism of section 153 is that it does not go far enough. A person found guilty under the terms of section 153 (5) should be debarred from practising as a solicitor or accountant for a specified period. Professional classes should not be deemed to be above the law or more protected by legislation than others. While Deputy McDowell focused on section 153, Deputy McCreevy poked around in the threadbare cupboard of Fianna Fáil rhetoric and gave vent to indignation about increases in spending. Deputy McCreevy's indication, and that of his colleagues, is little more than a smoke-screen designed to avoid taking political responsibility for their Government's mismanagement. After all, it was Fianna Fáil's failure to implement European Union law which led directly to the State footing a bill of £260 million in equality arrears.

It was the Deputy's Labour colleagues and Fine Gael who were responsible.

Deputy O'Hanlon's party was in Government at the time.

The last date on which payments should have been made was in 1994.

Deputy Byrne, without interruption, please.

It was the former Minister for Social Welfare, Deputy Woods, who repeatedly told Members of the House that there was no obligation to pay.

We were not in Government when this money should have been paid and the Deputy should ask his colleague, Deputy Lynch, about that. She has done research on the matter.

Now the taxpayers must pay the money to which those women are entitled. The issue was deplorably mismanaged by Fianna Fáil when in Government. It was its negligence, to put it politely, which led to Ireland being fined in Europe in respect of irregularities in the beef industry, and the taxpayers may have to pick up another bill of £75 million to £100 million because of Fianna Fáil's mismanagement in previous Governments.

The bills faced by the present Government in respect of past mismanagement come as no surprise to most observers. Irregularities in the beef industry were apparent from the early 1980s, yet we had to have a beef tribunal to ascertain the answers to questions which should have been delivered in this House. By the same token, it has been apparent for the past ten years that equality payments owed to married women would eventually have to be paid. Yet successive Fianna Fáil Ministers for Social Welfare refused to pay, and instead put married women through the legal hoops. It was the same concept of government by decree which led Fianna Fáil to lay the foundations for interpretative centres in the face of public protest. Today the taxpayer and the environment are being asked to pick up the tab for Fianna Fáil's heedlessness.

What about the Blood Transfusion Service Board scandal? As it unfolded, our first thoughts were with the women whose lives were altered forever by what can only be called criminal negligence. I am glad Deputy O'Hanlon is in the House because, as a former Minister for Health, he will know what I am talking about. I congratulate the Minister for Health on his openness and on moving swiftly to establish an unbureaucratic mechanism through which women can be compensated. In this regard, I wish the chief executive officer of St. James's Hospital well in the task of sorting out the mess. Mr. Dunbar is a particularly astute and talented public official.

The Minister, Deputy Noonan, like many of his colleagues, inherited an unholy mess and someone somewhere must take responsibility for it. It is just less than three weeks since the Heder-man-O'Brien report was published which I read with a sense of increasing horror and bewilderment. How did the ongoing problems in the Blood Transfusion Service Board go undetected for so long? Why, in 1991, was no action taken on the test results from the Middlesex Hospital? The Hederman-O'Brien report answered many questions and its author is to be congratulated for distilling the facts in so short a period. One question, however, remains unanswered which was outside the report's remit. Who carries the political responsibility? Not so long ago we witnessed the spectacle of French politicians being forced to carry the political can for a similar scandal. Power carried with it obligations. The buck must stop somewhere and where better than at the desks of those elected to exercise power on the citizens' behalf.

Successive Fianna Fáil administrations adopted a hands-off approach to the business of Government which is only now coming home to roost. One cannot help wondering what unpaid bills will flutter on to the Government's table next week, next month or next year. It is little wonder that Fianna Fáil has carried the disarray which surrounded the collapse of the last Government to the Opposition benches. Fianna Fáil is in a political hole of its own digging. I appeal to it to throw away the shovels, pause for reflection and provide this nation with good Opposition.

I will concentrate on one aspect of the Finance Bill which should be altered or extended. I am not the only one to have put forward arguments in this regard and I hope the matter is altered in a way that will satisfy everybody concerned.

This week an advertisement was placed in the newspapers by 75 domestic charities who came together as the national charities of Ireland to sponsor an open letter to the Minister for Finance requesting that he amend section 8 of the Finance Bill. There were several Cork-based charities involved, for example, aid for cancer treatment, the Society of St. Vincent de Paul and Rehab, Unfortunately, the number of charities was limited on the basis that some of them could not afford the cost of placing the advertisement, which is understandable.

Recently I and a number of other Deputies from the Cork area attended a hastily convened meeting at the Guide Dogs Centre. People in contact with blind or partially sighted people will be familiar with this centre and the work it does. It is the only centre in Ireland that trains blind people in mobility skills and trains guide dogs to restore to blind and partially sighted people a degree of independence and dignity to which we are all entitled. Despite that, this centre is in dire financial straits. My colleagues and I are working on this problem from a different angle.

Section 8 allows people who donate to Third World charities to obtain tax relief on donations and I would be the last person to say that tax relief should not be allowed on them. One only has to look at pictures on our television screens and read reports in our newspapers to be convinced that tax relief should be given to people who donate to Third World charities. The current crisis is in Rwanda but one can think of many other Third World crises over the years, including Biafra. Irish people abroad are trying desperately to give care and sustenance to people who urgently require it and, in that context, this tax relief should remain. It should have been introduced years ago, as it was in other countries.

If we believe in the concept of charity beginning at home — and nobody believes that more than the Irish because our people travel abroad to administer care to those who need it — how can we say that the charities that administer to people in need here must be treated differently? The Lotto has adversely affected domestic charities in a major way and we all accept that. However, we are providing tax relief on donations to Third World charities but not on donations to Irish charities.

This problem can be rectified. We cannot say that donating to Third World charities is better than donating to domestic charities. People who believe in those charities will continue to donate money but people trying to decide which charity to donate to will be discouraged from donating to an Irish charity. It will be the easier option to donate to a Third World charity and obtain tax relief. That will happen and we must be conscious of it.

In Cork a charity called the Chernobyl Children's Project does not spend money on the construction of buildings or on work in other countries, it sends aid abroad and it brings children to Ireland thereby enhancing their quality of life. I am sure everybody is familiar with the work undertaken by this charity yet it will fall outside section 8. I am asking the Minister to include in section 8 charities that operate in Ireland. It is not a measure that will cost money; there will simply be an administration cost. I do not believe anyone in this House would disagree with the implementation of such a measure.

The Finance Bill deals with the technical aspects of the budget and there are areas within it with which people will either agree or disagree. I am sure people will want to refer to the sections dealing with the tax code, social welfare or personal benefits. It is necessary that all areas are addressed and it would be remiss of us to allow a small section such as section 8, which has an enormous bearing on people's lives, to be passed without highlighting the need for its improvement. The improvement required is minimal but it would mean a great deal to people affected by it.

While the two Democratic Left Deputies are still in the Chamber I will comment on some of the points made by Deputy Byrne in his contribution. I was surprised at his veiled attack on his Labour Party colleagues in Government because, as Deputy Byrne is well aware, the equality legislation was the result of a European Union directive in 1979 and the payments should have been made before 1984. In 1984, the Fine Gael-Labour Coalition Government was in power but it did not make the payments. As a result of rulings in subsequent court actions, the then Minister for Social Welfare, Deputy Woods, decided to pay the moneys. The decision in those court cases was made since this year's budget and the money will be paid, but it is an attack on the Labour Party when Deputy Byrne says the money should have been paid in the past although I agree with Deputy Byrne that the money should have been paid.

With regard to the Blood Transfusion Service Board. I agree with Deputy Byrne that this is a serious problem but he referred to information the board received at the end of 1991. I had left the Department when that information became available but in the intervening period, up to the time when Deputy Noonan became Minister for Health, a member of the Labour Party was the Minister for Health. It is unfair for Deputy Byrne to come into this House and blame the Minister for Health for inaction on information received by the Blood Transfusion Service Board which was not passed on to the Department of Health.

In regard to what Deputy Byrne said about Deputy McCreevy, it is grossly unfair of him to come into this House and quote half a sentence from any Deputy. When Deputy McCreevy referred to the "Mickey Mouse bits" that accountants were being asked to report, he was referring to such items as late filing of returns. The reason given by him why accountants should not have to do that was the Revenue Commissioners already have access to that information through the sophisticated information technology system. It was grossly unfair of Deputy Byrne to accuse Deputy McCreevy of supporting tax evasion. Nobody on this side of the House supports tax evasion and the Deputy knows that. If he read the Finance Acts from the time when Fianna Fáil Ministers were in power from 1987 to date he would know we are totally opposed to tax evasion. Indeed, some Deputies have called for consolidation of the finance legislation because so much legislation was introduced over the past seven or eight years much of it dealing with tax evasion.

The Finance Bill will give effect to the measures announced in the budget. The first announcement made in the budget about which we must all be concerned was that the Government intends to engage in a spending spree. This Government was given a budget that was, for the first time in approximately 25 years, £15 million in surplus. Although the economic indicators were favourable, the Government decided to go off on a spending spree similar to the Fine Gael-Labour Government spree from 1982-87, which resulted in serious problems for the country. I condemn the Government for that because, having been handed the finances in a healthy state, it went down the road of borrowing. I am sure all Members believe that no one has the right to provide a level of public services for ourselves for which we are not prepared to pay, leaving the bill for our children. We all accept that and we have to work around it.

The problem as I see it is the different ideologies of Government parties. We had a classic example in the days before the Democratic Left Party conference when they had to get a little sweetener to take to the conference, which was the tax relief on service charges. This was the first transparent action of the Government since it took office. The Democratic Left Party won on that issue but lost very heavily on the question of payments to social welfare recipients as the Minister granted only a 2.5 per cent increase to social welfare recipients, the second worst in the history of the State. If the late Ernest Blythe, a former Minister for Finance, had not taken a shilling from the old age pensioners it would have gone down in history as the worst budget in the history of the State for the unemployed, old age pensioners and lone parents.

The increase in child benefit is the highest in the history of the State.

A great deal of work was done between 1987-94 to correct the country's finances. Between 1983-87 when Fianna Fáil was in Opposition it talked at length about the need for restraint in public spending and when it formed a minority Government in 1987-89 it implemented the necessary measures it had talked about in Opposition.

When the members of the Government were in Opposition, the Fine Gael Party used to talk about the need for restraint and how necessary it was to control public expenditure. However, the Democratic Left Party wanted to spend all the time, it did not matter to them where the money came from. This shows the different ideologies between the two parties.

We all agree with a number of measures in the Finance Bill, the changes in PRSI for example. It is unfortunate that the Minister did not concentrate on one issue in the current year and with the same money he could have given a substantial benefit, which would have been more effective than spreading the money on different benefits, where the results are not seen to the extent they should be. The tax system has to be fair and equitable but I echo the concern expressed by my colleagues on this side of the House in regard to section 153 of the Finance Bill — I will always express concern about State interference in the relationship between a professional and his clients, between a doctor and patient, the priest in confession, the solicitor and accountant and their clients. That type of relationship is sensitive and confidential. It is built on mutual trust. I have serious reservations about section 153 because it breaks the trust which should exist between a professional and his client, it will be counterproductive and will not achieve the objectives the Minister wants. People on PAYE now use the services of an accountant and nobody welcomes that more than the Revenue Commissioners because it ensures that they get what they are entitled to. If people lose confidence in the profession and decide they will no longer use them the situation will become much worse from the point of view of revenue collection and add to the work-load of the Revenue Commissioners.

We are fortunate that the vast majority of professional people have very high standards and their own code of ethics. I accept that in every walk of life people will go off the rails and not do what they are supposed to do. I think these people should be dealt with in the first instance by their professional body and if not, the law should deal with them but we do not need something as draconian as section 153 to deal with them. The Revenue Commissioners have very substantial powers and are very effective. With the aid of sophisticated information technology they have been effective in keeping track of taxpayers and ensuring that they collect what is due to them. Deputy McCreevy pointed out that as a practising accountant he had a vested interest but I do not as all my income comes from PAYE.

The tax relief designated for Third World charities is welcome but there is a case to be made for Irish charities as many people give substantial amounts to them. This should be looked at before Committee Stage. The question of covenants should be looked at again. While there has been some relief which is welcome as a result of contributions in this House at budget time when it was decided to abolish covenants, I do not think the Minister has gone far enough. There is a case to be made for leaving an escape hatch so that if a worthy cause comes to his attention where a person would be able to benefit from a covenant, the Minister should have the power to so decide. It would be most unfortunate to close the provision to make covenants when we could find that people could benefit tremendously from a covenant but could no longer do so because of a decision taken in the Finance Bill.

It was disappointing that the Minister did not refer to the cessation of violence on this island and to the implications it will have in economic terms for the Border regions. We should refocus the national development plan. Because of the cessation of violence the situation has changed totally in the six counties on the southern side of the Border which have a great opportunity for economic development but also facing more competition from the Six Counties. It is important that the appropriate infrastructure is put in place to ensure that we are able to compete on an even pitch. The money we receive from Europe whether through the Delors package, Structural Funds or the IFI should be seen as additional money. We were very disappointed that the INTERREG money was not used as additional money for road repair.

The issue of cross-Border workers and double taxation was raised before. Workers residing south of the Border but working in the North pay tax at UK rates and are also taxed at the Irish rate on top of that. The question of cross-Border workers should be raised at EU level. I understand different rules apply in Belgium and Denmark. Nursing homes north of the Border are recognised by health boards here and I do not understand why they are not recognised for tax relief purposes.

A conference was held in the Slieve Russell Hotel yesterday at which an official from the Department of Finance said EU funding for peace and reconciliation would be additional money. I ask that all money received from outside the State be treated as additional money as is intended by those who give it. There was a sense of anger at the fact that the Taoiseach and the Minister for Social Welfare both arrived at the hotel within one hour of the closure of the all day conference. One or both of them should have attended earlier and addressed the conference or at least addressed it when they arrived. That is a further indication of the Government's lack of commitment to the problems in the Border areas both North and South. I wish to share my time with Deputy Andrews.

I support what my colleague the former Minister for Health, Deputy O'Hanlon, said in his extensive contribution. In his speech the Minister neglected to mention the consequences of the cessation of violence. On Committee Stage the sections mentioned by Deputy O'Hanlon, and the Fianna Fáil Parliamentary Party, will be dealt with. I strongly support the view expressed here and elsewhere that section 153 dealing with the confidential relationship between a solicitor and client or an auditor/accountant and client should be broached. I anticipate a long struggle on this section to get the Government to abandon its intentions. That is not to suggest for a moment that this party condones or seeks to condone tax evasion or tax avoidance. We have been in Government from 1987 to almost the present time and our record speaks for itself in that regard.

I am the Opposition spokesman on tourism and trade and my contribution to the Bill will relate to that brief. The provision of a pilot renewal scheme for seaside resorts is a welcome development although the list of locations reads like a Fine Gael and Labour constituency canvass. Hopefully the measures will boost the tourism industry in Achill, Bundoran, Courtown, Kilkee, Lahinch, Tramore, Youghal and Westport. There are two interesting and welcome inclusions in the list, Westport and Courtown. Westport is in the constituency of the Minister for Tourism and Trade and while not being a seaside resort it has a magnificent sea view from some places. It is important to place on record my appreciation of the hospitality I have received from time to time in this excellent western town. It is a beautiful location and place. It is just a coincidence that it is in the Minister's constituency. I do not fault him for that. I would do anything I could for my constituency.

Courtown is also a welcome inclusion. It was not in the original list of designated resorts and its inclusion no doubt follows intensive lobbying since February by the Minister for Finance's Cabinet collegue, Deputy Howlin, an excellent Minister, who represents the sunny south-east.

The main thrust of the proposal does not go far enough. There are many other traditional seaside locations which would benefit from the scheme and urgently need to be renewed and updated. The accelerated capital allowance provided in the Bill in respect of the construction of hotels, holiday camps, cottages and other tourist accommodation would be the fillip required for these resorts, many of which are located in some of the worst unemployment blackspots along the south and west coasts and in parts of the east. There has been a mass exodus of young people from these areas. By widening the tax designation to other resorts now rather than waiting until 1996 the Minister would increase employment almost immediately. There would be jobs in construction and seaside ghost towns would become hives of activity. By designating more seaside resorts the Minister would prepare the industry for a future filled with potential which is recognised by the Minister for Tourism and Trade.

Up to 50,000 new jobs could be created in the industry by the end of the decade. In the past five years 25,000 extra jobs were created. By combining domestic initiatives such as the special designation and the peace process with the EU's operational programme for tourism we could easily double that number of jobs by the year 2000. This level of tourism activity would bring in an extra £3 billion in foreign exchange earnings. That would be good for the Department of Finance coffers and for the unemployment crisis.

The Minister for Finance, Deputy Quinn, should also give consideration in his Finance Bill for tourism and trade initiatives that could help rebuild links between North and South. I pay tribute to the Minister for his recognition of that potential and possibility. Potential and possibility is one thing, reality is another.

The peace initiative will establish tourism as the major force in economic growth and the spin off will be worth huge sums of money to the Exchequer in the long term. Peace also provides increased opportunities for greater inward investment and cross-Border trade as articulated by Deputy O'Hanlon who has a special knowledge of that area having represented that constituency for a number of years. He would recognise the problems and the solutions.

I was pleased that an all-Ireland tourism programme was announced recently in the Netherlands. Initiatives such as this must be fostered and encouraged. The Minister for Finance should consider giving assistance in his Finance Bill to groups and organisations that have a special role in assisting the development of tourism and trade between North and South.

The Minister should also consider giving a financial incentive to promote St. Patrick's Day. While St. Patrick's Day here is not exactly a non-event the St. Patrick's Day parade in Dublin has effectively lost its bite. The national festival is not exploited as it should be. It happens at a time that is normally quiet for the tourism industry. Marketing St. Patrick's Day internationally, especially if the holiday was transferred to a weekend as proposed in a discussion paper on holidays legislation, would draw a major influx of visitors and the early burst would set up the tourism industry for the year. The Minister for Finance could assist in several ways in pushing this proposal. He could give a special tax break to companies who make a donation to the organisation of St. Patrick's Day parades and events. In recent years the Dublin parade has lost some of its glitz and glamour and needs a radical new structure. Many of the traditional supporters of parades such as State companies are no longer in a financial position to assist with contributions. With some special tax or financial measures, parades could be upgraded and new events launched to make Ireland a tourist destination. My colleague, Deputy McCreevy, complained yesterday that this Government is just tinkering at the edges of tax reform. I agree with that and I will highlight what needs to be done for tourism.

A national strategy needs to be set with the tourism industry identified as a key sector for creating employment and wealth. Tourism must also be a ladder in rural development and a priority focus for enterprise initiatives. Ireland is located just off the largest and wealthiest tourism market in the world, Europe, which accounts for over one-third of world tourism. Tourism also expands trade, food, drinks and services and helps agriculture and many other areas of enterprise. It is a vital prop for rural Ireland. This must be recognised and addressed by the Minister for Finance. There must be reward and support for risk takers. There must be reasons for making investment available. There must be help for green tourism, in which we can be the world leader.

Tourism is part of the dynamic services sector. Tax reform could create more than 250,000 jobs in the sector over the next decade, according to the National Economic and Social Forum. Services and tourism are the only sectors that offer the potential for substantial employment growth and they have been neglected. While moves have been made on PRSI further work needs to be done on income tax. Consideration must be given to an extension of the lower 10 per cent corporation tax to a wider range of services such as tourism which has proven employment potential. Only in this way can we charter a course for Ireland for the next decade. We need vision based on the potential of tourism and services. Tinkering at the edges is not enough.

I am very pleased, as Minister for Tourism and Trade, to have this opportunity to speak in the House on the 1995 Finance Bill which delivers on the detail of the taxation proposals announced in the budget. As the Minister for Finance has indicated, this Bill is the first in a series which this Government intends to present to create a climate of taxation which rewards work, promotes enterprise and creates social solidarity.

I was interested in a number of the comments made by Deputy Andrews. I agree with his comments on St. Patrick's Day parades. This should be the national showcase of a modern Ireland at an important time in our development. I have examined this matter in the Department. I have received a number of representations from Members and various other interest groups. I can give a guarantee that he will not again see the kind of St. Patrick's Day parade to which people have become accustomed. At a recent meeting of the tourism council I approved an allocation of £50,000 to employ an artistic director to look at the range of possibilities in respect of the St. Patrick's Day parade to project Ireland as a modern enterprising young country. I hope the artistic director together with the various interest groups, particularly in the Dublin region, where some appointments will be made to a special committee, will ensure that the St. Patrick's Day parade becomes the showcase of the modern Ireland to which Deputy Andrews refers.

Tourism and trade have crucial roles to play in furthering the objectives of rewarding work, promoting enterprise, creating social solidarity and in particular in stimulating employment opportunities. As a Deputy representing County Mayo in this House for the past 20 years, I am more acutely conscious than many of the haemorrhage of our young people emigrating which has beset this country and especially the west.

In the coming months we will commemorate sensitively the millions of people we lost as a result of the Famine 150 years ago, those who died and those who had the strength to flee. One hundred and fifty years on, many are still going but the circumstances are not as tragic. Many are now well educated, get good jobs and manage to get home for Christmas or for holidays but the void in their families is still great. The void in their town or village is still great as is the loss to the community of young strong minds and bodies.

As Minister for Tourism and Trade I have a responsibility to those young emigrants and their families. I must pursue policies and initiatives which make it possible for them to get good employment opportunities in our towns and villages. We all know there is no simple solution to the problems of unemployment. There is no simple quick fix. The problem has to be tackled on a broad front with a range of policies and initiatives.

I intend to frame my remarks generally in the context of tourism and trade development and how this can assist in tackling unemployment. The importance of tourism to the Irish economy is directly linked to the potential to create badly needed and sustainable employment. It is a highly labour intensive sector with a low technological base and a predominance of small enterprises.

Most inputs are home-produced and tourism has a high multipler in terms of national income — the direct content of tourism is in fact only about 10 per cent. Each £1 million of foreign tourism revenue therefore contributes the equivalent of 55 full-time jobs.

Tourism is a particularly powerful instrument of regional policy because it helps to raise incomes and provide employment in the more remote and less developed regions. Many of our major tourist attractions are located in less developed regions whose very remoteness is a powerful attraction.

The significance of tourism to the regions will become even more important over time as the numbers directly working in agriculture decline. As well as the purely economic considerations, tourism also has the important effect of energising and raising the morale of local communities which have been adversely affected by emigration and depopulation. Since becoming Minister for Tourism and Trade, I have been pleasantly surprised at the amount of local effort and initiative which is being put in all around the country on local tourism projects.

Recognition of the vital role that tourism plays in the economy and the potential to increase that role, must be at the heart of our plans to develop the industry. Tourism now represents 7 per cent of GNP, compared to 5.4 per cent in 1988 and accounts for 8 per cent of employment. In some parts of the west and north west tourism accounts for more than one in ten local jobs.

Between 1988 and 1993, 25,000 new jobs were created by tourism or 40 per cent of the total number of new jobs in the Irish economy. This Government is fully committed to continued, planned development of the sector and ambitious, but realistic, targets have been set up to the year 2000. Foreign exchange earnings are set to rise to £2.25 billion or an average annual increase of 9 per cent with jobs to increase by 5 per cent annually from 91,000 to 120,000.

Last year was a good year for Irish tourism on a number of fronts: overseas visitor numbers were up by almost 11 per cent; we had particularly strong growth from both the British and North American markets; the review of Bord Fáilte's role was completed and we are well on our way to its recommendations being implemented; the Operational Programme for Tourism was agreed and published — already over £13 million has been approved in 39 projects throughout the country, involving a total investment of over £35 million and last, but by no means least, the ending of violence on the island has opened up new opportunities for tourism throughout the island, opportunities which we are setting out to exploit in close cooperation with our colleagues in Belfast. We have lived with the Northern troubles for so long that we underestimate the harmful effect they have had on the international perception of this island, either as a place to visit or as a place in which to invest. How many of us would consider going to Bosnia or Palestine for our holidays? For many people abroad, that is what they believed we were asking them to consider. Lifting that yoke from the back of Irish tourism opens up great possibilities for economic development and job creation, North and South.

We have made a particular effort to associate ourselves both North and South in the marketing of this island as an all Ireland/all island entity. I have met my counterpart from Northern Ireland, Baroness Denton, on a number of occasions to publicly give solidarity to that commitment. We were happy that the Northern Ireland Tourist Board accepted our invitation to attend in America, and in New York in particular, at the St. Patrick's Day celebrations this year. It is important to understand that it is now so easy to market Ireland as a single entity and we intend to continue to work and strengthen that part of our development.

This year's budget, and the Finance Bill before us today will help to strengthen the Irish tourism industry throughout a variety of both general and specific measures. The pilot renewal scheme for traditional resorts is the most significant single initiative in this Bill which I believe will have a revitalising effect on a number of traditional resort towns.

I expect that there are few Members of this House who have not as a child, spent an annual week, fortnight or month in one of the traditional, small holiday resorts around the country and remember them, as I do, with fondness and a degree of nostalgia. With the increasing availability of cheap foreign holidays in the sun, however, many of these resorts have fallen on hard times.

The combination of declining visitor numbers and shortened season have resulted in a lack of investment in both planned renewal and new product development, thereby accelerating the downward spiral. This in turn has lead to a situation where many resorts are unable to respond to a renewal of interest in home-based holidays and even less to play a part in attracting overseas tourists and contributing to Government objectives.

If these resorts are to increase their appeal to domestic and foreign tourists, it is essential that the visitor accommodation and other tourist facilities are extensively improved to meet the demands of the modern holiday-maker and that new tourist facilities, appropriate to the character of the individual resort, are provided to attract a new and growing tourist trade. Accordingly, the provision under this year's Finance Bill for a new pilot tax incentive scheme specifically designed for the improvement of certain traditional resort areas is particularly welcome.

The scheme is based on the very successful urban renewal scheme model which has been instrumental in promoting the renewal and revitalisation of cities and towns around the country and in encouraging development in areas where it would not otherwise have taken place.

It incorporates many of the features of that scheme, notably, accelerated capital allowances, double rent allowances and rented residential accommodation relief.

Accelerated capital allowances will be available in respect of capital expenditure incurred on the construction of eligible buildings or structures and, subject to conditions, on the refurbishment of such buildings. The allowances consist of an initial allowance, available to both lessors and owner-occupiers, of 50 per cent, annual allowances of 5 per cent and accelerated annual allowances, commonly referred to as free depreciation, available to owner-occupiers only of up to 75 per cent. Where an initial allowance is claimed there will be no entitlement to free depreciation.

A double rent allowance will be available as a deduction in computing trading income for the first ten years' rent arising under new leases of certain buildings or structures, again subject to conditions in the case of refurbished buildings and structures.

Finally, rented residential accommodation relief will be available in respect of construction expenditure incurred on the provision of certain rented residential accommodation, the expenditure incurred on the conversion of certain buildings into rented residential accommodation, and the expenditure incurred on the refurbishment of buildings of multiple residential accommodation.

These reliefs which will apply where the accommodation is available primarily for letting to tourists may be offset only against Irish rental income, and may not be availed of in addition to capital allowances.

Clearly this scheme will provide Achill, Ballybunnion, Bundoran, Courtown, Kilkee, Lahinch, Tramore, Westport and Youghal with a most useful complement to the support available under the Operational Programme for Tourism. As this is a pilot scheme, it was not possible to include every area in the country in the initial allocation. However, I hope that the motivation that exists among the business community will be reflected in very significant investment in these areas. Although the scheme is being promoted between the Departments of Finance and Tourism and Trade, I have no doubt but that the Minister for Finance will be amenable to looking at the question of an extension of this scheme subsequent to a review of the success of the pilot scheme.

The legal definition of the precise areas to be designated is described in the Third Schedule to the Bill. As far as possible, entire townlands and urban districts have been included in the interest of simplicity and clarity, although this did not always prove practicable. I am satisfied that the coverage is as generous as could reasonably be expected. For the convenience of potential investors, my Department has requested the county managers in the seven relevant counties to prepare large-scale maps outlining the designated areas and to make these available for inspection in appropriate locations.

The Bill already proposes that all Bord Fáilte registered and approved visitor accommodation, i.e. registered hotels, guesthouses, caravan and camping sites, holiday hostels, youth hostels, holiday camps, holiday cottages and holiday apartments, and approved bed and breakfast establishments in the designated areas, may benefit under the scheme.

It is also intended that other tourism buildings or structures which I approve will be eligible for the incentives. While these have yet to be agreed between me and the Minister for Finance, I envisage that most Bord Fáilte or Shannon Development approved tourism products and services will be included with a number of other facilities used by visitors to these areas. My aim is to include all facilites which have a genuine tourism dimension and I hope to be in a position to publish a list of the categories of eligible buildings and structures shortly.

My Department, with Bord Fáilte, Shannon Development, the regional tourism organisations, the local authorities and others, has a role to play in promoting this new scheme, although ultimately it will depend on individual investors and entrepreneurs to capitalise on the marvellous opportunity that this scheme represents. I am confident, however, that it will help to create a favourable climate for private sector investment in the designated resort areas, that it will contribute significantly to their regeneration and that it will enable them to play their part in meeting Government targets for overseas tourism revenue and job creation.

We in Ireland possess a rich heritage, including both our natural and built heritage. Bord Fáilte surveys confirm that almost half of all holidaymakers to Ireland visit places of cultural or historical interest. Country house tourism is an important subsector of the heritage tourism sector and section 20 of the Bill extends certain tax reliefs to significant houses of historic or architectural importance which operate as guesthouses for at least six months in the year.

At present, transfers of heritage properties like historic houses, gardens or works of art are exempt from capital acquisitions tax provided,inter alia, that reasonable access is afforded for public viewing. The relief is, however, not available for shares in a company holding heritage property. Section 147 of the Bill provides for the granting of relief to shares in existing companies to the extent that the value of the shares is attributable to heritage property. This measure will help to preserve the heritage properties of long-established family-owned companies following their transfer to the next generation.

The Bill also provides in section 157 for a scheme of tax relief on donations of items of national heritage. This is another measure which will help the preservation and enjoyment of our national heritage.

The tourism industry stands to gain significantly from the general taxation provisions contained in the Bill. With the PRSI changes announced in the budget, the income tax reliefs set out in this Bill will provide additional reward to those at work, especially the low paid. As a highly labour-intensive industry, the cost of employing extra staff is a major issue with many tourism employers and these changes will improve their situation significantly. The reduction in the standard rate of corporation tax from 40 per cent to 38 per cent represents a first and very welcome step on the road to securing a standard rate of corporation tax which is comparable with our overseas competitors. The extension of various capital gains tax and capital acquisitions tax reliefs in this Bill will be of assistance to tourism businesses while the improvements in the reliefs available to new entrepreneurs under the seed capital investment scheme will encourage more new business start-ups.

The year 1995 promises to be the best ever for Irish tourism. In addition to the £6.3 million which will be spent on this year's overseas tourim marketing initiative and Bord Fáilte's normal spend, I have recently allocated Bord Fáilte an additional £1 million for complementary marketing and promotional activity in 1995.

The prospects in our main markets overseas are generally good. The immediate impact of the peace dividend may well be seen in a big increase in British visitors. We can again expect significant growth from north America and further recovery from continental Europe. Investment in tourism infrastructural projects, marketing and training will pick up as the pipeline of EU-supported projects continues to flow and as we continue to enjoy generally favourable conditions for investment.

I now turn to the contribution which trade is making to our economic regeneration. The year 1994 was one of the best on record for Irish exporters with an excellent performance, once again, by our indigenous companies.

Given the economic upturn in many of our key markets, good trade figures were anticipated but the actual out-turn was well ahead of expectations. An Bord Tráchtála focuses most of its resources on assisting indigenous companies to build their export sales and market share and, in recent years, the pay-off has been significant.

Indigenous export growth is all the more beneficial to the economy when one considers that indigenous exporters are major job creators because, in the main, they operate in sectors which are twice as job-intensive as those dominated by the multinationals and purchase more of their inputs in the Irish economy, giving a further employment spin-off. Last year indigenous exporters increased employment, as measured by the ESRI, by 1,200.

The picture in each of our main markets last year was one of recovery from recession, buoyancy and growth, but the most striking feature of the sales achieved by Irish exporters in 1994 is that they ran well ahead of the upswing in the markets. The increase chalked up by them was well ahead of the 7 per cent growth in total world trade. Britain, for example, increased its total imports by less than 5 per cent last year while our exports to Britain rose by 18 per cent. Germany's import growth was 5.5 per cent; our exports increased by nearly 9 per cent.

This means that Irish companies are not only winning increased sales abroad, they are also winning increased market share which is the real measure of our performance. It explains why Irish exporters have been able to increase their sales consistently in the 1990s, in both the difficult and recessionary markets of recent years and in the better times we are now experiencing.

I am glad to note, from last year's figures, that our market diversification is continuing and, specifically, we are selling more in continental Europe. This is not to understate the continuing value of the British market where we are doing very well. For example, more Irish clothing is sold in Britain than in Ireland. Last year, indigenous exports to Britain were worth almost £2 billion and we anticipate a further significant increase this year, notwithstanding the appreciation of the Irish pound against sterling. While this peformance is very good, I do not need to tell our exporters that the British market cannot be taken for granted. It may seem like an easy market but many a first-time exporter has come to grief there and this is why we will continue to offer significant State support.

The year 1995 must see a significant intensification of our drive to seize the enormous new business opportunities in continental Europe. The time is right for an accelerated Opportunity Europe programme. A number of factors are converging this year. The European Union has been enlarged to 15 members, giving Irish exporters greater access to affluent markets in Austria, Sweden and Finland. Economic conditions across the Continent are better than they have been for some years, with all economies, and Germany in particular, showing growth. The International Monetary Fund's most recent World Economic Outlook bears this out. Following a process of major restructuring, European industry is increasingly pursuing a policy of outsourcing, which gives Irish suppliers valuable potential new business; this year, the impact on trade growth of the recent GATT Agreement will begin to be felt and Europe is likely to be one of the big beneficiaries.

For all of these reasons and, perhaps most importantly, because the groundwork has already been laid, Irish industry must focus on Opportunity Europe in 1995. This will involve a dual strategy of providing the fullest support to the 800-plus Irish companies already selling in Europe and, at the same time, encouraging Irish exporters who are successful in the British market to expand their market reach into other markets in Europe.

I would like to say a word of congratulations and appreciation to the many small and medium-sized Irish companies whose individual efforts and successes lie behind the excellent aggregate figures achieved in 1994. Amid the welter of facts and statistics, it is all too easy to forget the reality that Ireland's indigenous export sector is made up of thousands of companies and men and women who are the risk-takers and the achievers.

People often bemoan the low visability of Irish products in the shops of Europe and, of course, they are right in that we can always do better. However, they very often forget that Irish firms are succeeding in other sectors, which are low-profile and less glamorous but just as valuable, such as automatic components, printing and software. This effort does not go unrecognised and unsupported by the State. The marketing element of the Industry Operational Programme envisages a total spent of almost half a billion pounds by 1999 from national, EU Structural Fund and private sources. The three main components of the plan are: giving information to industry on market opportunities; support in exporting those opportunities; and direct financial assistance.

Recently, I gave An Bord Tráchtála the target of doubling indigenous exports by the end of that period and I would like to conclude with a brief comment on this. It is not, perhaps, a target in the conventional sense. Neither my Department nor An Bord Tráchtála actually exports anything and I would not presume to set sales targets for individual Irish companies. The target of doubling export sales is based on an analysis of opportunity, potential and capability. It indicates the scale of the result which we can attain with an allout effort. While it as an ambitious target, if Irish exporters continue to perform as well as they are doing at present, there is every likelihood that, come this time next year, I will be revising that target upwards. This Finance Bill is part of the Government's support for greater investment, greater competitiveness and greater employment. From my work in this Department in recent months I am convinced that if we maintain the levels of motivation and effort being applied in the tourism and trade areas, our country in general stands to benefit. Our economy will strengthen and there will be greater opportunity for our young people to stay at home and earn their livelihoods here. We can together, in the context of the new Ireland emerging from the peace initiative, create a society of which we can be justly proud.

I wish to congratulate the Minister of State at the Department of Tourism and Trade and the Government on the measures introduced for urban renewal and the designation of seaside resorts. European funding has played a major part in the rejuvenation of the tourism industry. That money has been spread without fear or favour and has had an enormous impact on areas throughout the country. While I welcome the designation of certain resorts, I see no logical reason for excluding others. The aim should be to include all resorts irrespective of their location. Although small resorts do not attract as many people as big resorts, the impact of the smaller numbers is equally great on the well-being of communities. People are now looking for quieter holidays with activities such as walking that do not require major facilities and it is a pity this welcome measure was not extended to other areas to encourage communities to spend money and expand.

I received a letter from people in one area who believe that because the area is not designated they are being punished for doing their best. I speak about Ardmore in my constituency, with which the Minister will be familiar. Incredible efforts have been made in that area down the years, with the whole community working together to beautify the area with a view to winning the national Tidy Towns Competition, which they eventually won. That area needs encouragement to go on to the next stage of development, but now finds it is not one of the areas designated. The people there ask me what did they do wrong. They did everything that those involved in tourism, local authorities and Departments told them to do. They worked together and achieved success, but they need the type of opportunity such as that presented by the scheme of capital allowances to cottages and hotels. It is important that small accommodation facilities benefit from this scheme also. I am sure there are cases similar to that of Ardmore. I do not wish to be parochial about the issue but I mention Ardmore because it is an area that has achieved national and international recognition. There is enormous frustration that this area is excluded from designation after years of striving to improve.

I listened to the Minister's comments on tourism and I have no doubt the figures in terms of employment and bringing foreign currency into this country are accurate. It is incumbent on us to encourage Irish holidaymakers to stay at home. This country is losing enormously by the increase in the number of Irish people taking holidays abroad. While we welcome measures to attract foreign visitors to the country, we must also provide opportunities for people on the greater island of Ireland. For many years visitors travelled to Tramore from Northern Ireland and those tourists were the mainstay of that resort. The peace process has contributed greatly to opportunities for people to visit Northern Ireland. Many years ago as a child I visited with my family the Glens of Antrim, the Mountains of Mourne and other areas in the North and enjoyed those holidays immensely. We must ensure that investment in tourism is aimed not only at foreign tourists but at our home market also.

We will put down amendments on Committee Stage to deal with this matter. It would cost little to include other areas in this scheme. At a time when we are probably receiving the maximum amount of Euro funding under the current round of the Community Support Framework — the next four to five years is the crucial period — the Minister should consider projects, some of them tremendously exciting, which he has received from all over the country. If other areas are not included soon, the opportunities for investment and to restore confidence to those areas may diminish. Everything possible must be done to maximise those opportunities. I ask the Minister to discuss the issue with his ministerial colleague before Committee Stage because by making such a move we will gain much more than we could possibly lose.

The Deputy will be aware that the European Regional Development Fund funding is the second leg of assistance given with this scheme.

I am including it all in the broadest sense of what is happening. I am not saying that one is all the time interdependent on the other, but people are conscious of the benefits that may be derived from such funding, that gives them a lift and encourages them to be involved in whatever schemes are appropriate. I know I am generalising, but the point is still valid. I encourage the Minister to consider opportunities under the urban renewal scheme.

I, and I am sure all Members of the House and independent commentators, considered that this year presented the greatest opportunity a Minister for Finance had in many years to move forward and make substantial and radical changes to the manner in which we operate. However, it is bewildering that the Minister for Finance could only best be described as: "Do not believe what I say because it does not matter; it is what I do that really matters". Those two lines are not converging. That is not being caused by myself, my party or outside forces, but by decisions wilfully taken by the Minister.

I remember the day the Minister for Finance, Deputy Quinn, was appointed and he was justly proud to be the first Labour Minister in the history of the State to hold that office. He stood firmly on the plinth and outlined what he would achieve. The pedestal on which he stood has not just been chipped away, it has been effectively removed from under him over the last few months. If confidence is lost in a Minister for Finance at an early stage, the chances of him recovering it in the wider markets is very difficult. I have no doubt that confidence has now been replaced by despair which all comes down to the Minister setting spending targets of 6 per cent on the current supply side. At the time I considered it was too high and that he was allowing himself no room to manoeuvre. It was a figure that could only be sustained if everything worked to the best advantage for him which I doubted and, clearly, that has not been the case. We now know, and the Minister has admitted in the House, that if the exceptional items are excluded spending will now be in the order of an increase of 10 per cent. That is unsustainable and harks back to what happened in the mid-1980s, the last time Labour and Fine Gael parties, now joined by the Democratic Left, had an opportunity to be in Government.

Matters on the financial front are disintegrating with extraordinary speed. Clearly, the Minister for Finance does not have the individual strength to hold off all the demands that will be made by Government Departments and individual Ministers regarding their spending requirements. The Minister is trying to give the impression that he is in control of matters in the public domain, but clearly he lost control within weeks of taking office. I was surprised because from what I had heard and seen of the Minister when I was in Opposition and in Government over the years I thought he would have had the capacity to be a strong Minister for Finance, but he is hoisted on ideologies that are split three ways within the Government. Clearly, there is not a cohesion and he has not been able to maintain control over what is happening.

The Minister not only set himself a 6 per cent spending target, he also decided to return to a current basis on borrowing. For the first time in 25 years after the hard work particularly since 1987, undertaken by succesive Fianna Fáil Ministers for Finance the position had been brought under control and at the end of 1994 we had a surplus in that area. Not only did the Minister set a spending target of 6 per cent, he set a current borrowing requirement of £310 million, leaving himself no room for manoeuvre if things went wrong as they certainly have. He has in effect exceeded his own spending limits and is the first Minister for Finance since the last Fine Gael-Labour Government to embark on such a disastrous course of action. It is tragic after the efforts of the past six or seven years that gains, in economic growth, low inflation and low interest rates made after much political pain, pain taken on board by industry, the State sector and in the public domain should be frittered away. It should not be accepted especially since it was unnecessary.

The Minister reduced corporation tax overall from 40 per cent to 38 per cent in the budget. No report over the past number of years recommended that course of action. The question of corporation tax and the debate in that area has been centred on the services because it was clearly seen there was a bias in the manner in which our taxation was structuredvis-á-vis manufacturing as against the services sector. As a member of the National Economic and Social Forum, working on this issue with all parties in the House for the past 12 months, I am aware that the issue is that the level of corporation tax in the services sector is too high and should be seriously addressed. I am not suggesting that because the rate was 10 per cent for the manufacturing sector the corporation tax for the services sector should be automatically reduced to that rate.

I hoped that the Minister could have taken a tiered approach to corporation tax because the small industries are providing the greatest amount of employment and showing economic and employment growth. They are not the companies making huge profits, they make small profits, but they employ a large number of people. However, what happened? Those who make the multimillion pound profits will get the benefits. Two per cent of a £200 million profit is a significant amount of money but 2 per cent of a profit of £20,000 or up to £100,000 is negligible in the context of a 2 per cent tax reduction. The Minister could have considered what has been said to him and what I have heard him preach on umpteen occasions over the past number of years, that we must direct taxation cuts towards those that can generate the jobs. We should not direct it towards foreign industries, but to small domestic industries that have a substantial impact in small communities and recognise the tremendous social impact made on small communities by keeping domestic industries in those areas.

The Minister totally forgot all he had said and ignored all that has been submitted to the National Economic and Social Forum and ESRI and OECD reports. It is extraordinary that a Labour Minister reduced the tax from 40 per cent to 38 per cent, thus favouring the big profit earners, such as the banks and the multinationals, and did not consider nurturing small Irish industry which is providing the greatest amount of sustainable employment. We are aware that the big corporations are shedding jobs, technology is racing ahead and they are managing by redundancy, but their profits are growing while the numbers employed by them are dropping and, therefore, they certainly will not create employment. That begs the question: from where will such employment emanate? The answer is within the services sector. We know from the figures available worldwide that the real growth is not in manufacturing but rather within the services sector. Therefore, we should be attempting to create a genuine, indigenous services sector here.

In the budget the Minister did nothing in regard to corporation tax, highlighted in most reports and discussions in recent months. I have heard the Minister's colleagues who sit with me on the National Economic and Social Forum expound at length on this issue. Yet, extraordinarily, the Minister proposed a 2 per cent reduction. Shame on him, he missed the point, he did not adhere to the sentiments expressed in his numerous speeches in recent years but rather favoured his pals — which his party would not admit to being pally with — and clearly demonstrated this by his favouring the big corporations and multinationals.

While the issue of PRSI rates is not the sole fault of the Minister, on my calculations, and those of others, there are 126 different PRSI categories. For example, in Class A there are six subcategories, with six rates applicable to each subcategory, Class J has 12, Class K, 4, and so on, in addition to which there are all the special levies, exemptions and so on that must be calculated. This means the calculation of such PRSI contributions has become a nightmare for companies, involving costs, time and energy lost in a wholly unproductive way tying up staff in accountancy practices and company offices endeavouring to revise their calculations as rates shift and change.

This is presented as constituting some simplification of the taxation system, which I find extraordinary. It is time we cried halt to this escalation of rates within the PRSI system. No other country would sustain such a system. It constitutes a paper chase, keeping people running around in circles, changing in each budget when everybody has to start from scratch. The revised rates have to be calculated within companies whenever employees' circumstances change. When employees break pay barriers the contributions change and must be rechecked. The exercise is ludicrous from the point of view of the employee but is equally so for the employer. Certainly, it does not encourage enterprise in any shape or form.

I have spoken and written to the Minister on the issue of covenants, as have others. Another Member instanced a specific case yesterday, which happens to be in my constituency and concerns people I know extremely well. They are a classic example of the real tragedy brought about by the proposed elimination of covenanting by the Government. The initial move in this area was dictated by the great desire of the Minister for Education to emulate the late Donogh O'Malley, a former Minister for Education. I doubt that the present Minister could ever don that mantle. She announced to the world that henceforth third-level education here would be free, which is very far from being the case. Indeed, she totally discriminated against a whole segment of the student population in that move.

As I understood it, the original proposal on covenanting was to be divorced from education in order to fund the abolition of third-level fees. What has happened is that covenanting has been abandoned except in regard to the maintenance of the old, the infirm and those suffering from Alzheimer's disease, which is to be welcomed. Of course, the Minister has not been listening to what has been taking place in the real world. The case referred to yesterday is very straightforward. That constituent of mine had a very short first marriage and has been living with his common law wife — I had thought they were married until they informed me they were not — for the past 20 years, with four children. He does not pay maintenance to his former wife, a decision made by the courts. He has the allowances of a single person only, cannot qualify for married allowance, and earns £22,000 annually. He has a mortgage on his house and must maintain his common law wife and four children. He has covenanted £10,000 of his annual earnings to his common law wife, enabling them to purchase the home, to educate their children, the net benefit of which was an extra £75 per week to the family.

The effect of the Minister's abolition of such covenants for education purposes is a tragedy for that family. That man, to all intents and purposes is married. His four children, are all practically teenagers and there is a need to spend a considerable amount of money on their education. He wants to further their education, yet he cannot avail of any State grants as he is above the income ceiling. It is outrageous that he has the allowance of a single person and I believe the Minister agrees with me. I know he is famliar with the case but I want to know what he will do about it because the abolition of covenants for educational purposes is absolute discrimination and should never have been proposed. This is but one effect of this rushed proposal to abolish them. I have no doubt but that other Members could cite other examples in their constituencies. The Minister cannot implement this proposal without replacing it with some benefits. The family to whom I referred will have to sell their home and the children's education will be put in jeopardy. I await the Minister's reply on this issue with considerable interest.

The gem of this Bill is section 153 to which practically all Members have referred. The Minister appears to have forgotten that this State in recent years introduced some of the toughest taxation legislation in Europe, resulting in increased revenue buoyancy, all of which has not stemmed from economic growth. If any Member asks any inspector of taxes or Revenue Commissioner he or she will be convinced that compliance with our tax code has increased greatly.

If the Minister wants people to comply with taxation laws, or any others, he must encourage harmonious working relationships. People must work together and trust one another, which is what occurred in recent years between the taxpayer, accountants and Revenue Commissioners — a good, solid, trusting, compliant working relationship based on very good law. It has worked exceedingly well and the Revenue Commissioners are very satisfied. While accountants will always grumble, the reality is that the relationship has worked well. However, the Minister for Finance proposes to criminalise practising auditors if they do not report cases of fraud. It does not relate to just any fraud, it can relate to nonsensical matters. The Minister has not properly defined the type of fraud to which this provision applies.

The section is totally unnecessary and the Revenue Commissioners do not see any need for it. I reject the growing belief that nobody can be trusted any more. This stems from the Labour Party's view that we must have laws to keep an eye on us, that people cannot be trusted to act in a proper manner. Legislation on ethics in public office is another example of how the whole world is wrong in the eyes of the few. I strongly reject this attitude. I accept that the recommendations were made in the Hamilton judgment but the reality is that much of the law put in place since then has worked extremely well. The Minister will drive a wedge between auditors, their clients and the Revenue Commissioners at a time when the system has begun to work in an effective way. Any tax inspector will tell you of a high level of compliance in all areas. This issue will be dealt with in further detail on Committee Stage.

I wish to refer to service charges. Democratic Left has said one thing in regard to this issue while the responsible Minister has said something completely different and has put rates back on the agenda. Regardless of the system that is agreed there will still be an onus on the local population to pay local charges of some description. This difference of opinion undermines the ability of local authorities to raise the funds which are of vital importance to them in drawing down moneys under the Structural Funds. The attempt by the Government to engage in double speak on what will happen is simply undermining local Government and the opportunities which exist. If this is allowed to continue it will be tragic. Nevertheless there are some of us who will continue to voice our views. In my constituency the proud record of Democratic Left is that it has never voted for an estimate for 15 years. Where would we be today if we had all sat back and adopted that approach? There would be no funding for local government and the Minister of State, Deputy McManus, would not be talking about all the Euro funding she has to distribute. Where does she think the money came from? Does she think it fell off the trees? Local authorities got the funding because people like me had the guts to stand up and be honest and ask people to pay a small charge which would be used to help their communities and areas to develop and prosper. It is about time the Government clarified its position in regard to local service charges before further difficulties are created. I look forward to the Committee Stage debate.

I wish to share my time with Deputy Paul Connaughton.

I am sure that is satisfactory.

I support the general thrust of this Bill. As he has said, the Minister's aim in both the budget and this Bill is to reward work, encourage enterprise and strengthen social solidarity, to look after those in the social welfare sector. It is not an easy task to realise those aims and the Minister has gone a long way in achieving these in the Bill.

I wish to refer to the provision which has grabbed newspaper headlines and been the subject of much comment in recent weeks, that is, the provision which requires auditors and tax consultants to report certain tax offences to the Revenue Commissioners. This provision is both fair and appropriate. I welcome the inclusion in the Bill of this provision which was recommended in the beef tribunal report. During the debate on that report last summer the Tánaiste and Minister for Foreign Affairs gave a clear commitment that he would follow through on that recommendation. The revelations in the report of widespread tax abuse horrified most people, particularly those in the PAYE sector, as well as the fact that certain individuals benefited to such a large extent from it. They were shocked that very little had been done about this problem and that people who regard themselves as professionals had assisted in this abuse.

This provision is concrete evidence that the Government believes low standards can no longer obtain in high places and that they are not acceptable any more. I am very surprised that this provision has met with such strong and vocal opposition from people both inside and outside the Chamber. Auditors regard themselves as a professional body and they, accountants and consultants claim to have the highest regard for professional integrity. They are entitled to do that but it is professional not to respect the laws of the land on tax compliance? I do not understand the objections to this provision. These people owe it to the institutes which awarded them their accreditation, their clients and the vast majority of the tax paying public to take on board the provision in the legislation. I am very glad that the Minister for Finance has clarified this procedure in law.

I think it is true to say that we have a thriving culture of tax evasion. The beef tribunal report brought this into the open in a way not previously done. Our laws in this area will have to be changed before there can be any change in attitude. In some sectors people who manage to get away with paying little or no tax are admired. We owe it to those in the PAYE sector and those who pay their fair share of tax to ensure that there is a high level of compliance in the taxation system. Hopefully any change in the law will lead to a change in attitude and culture. Turning a blind eye to abuses of the tax system is wrong and if nobody blows the whistle the abuse will continue.

I welcome the changes in the covenant system. These rightly give special consideration to those covenanting money to incapacitated people. In these cases there is no upper limit on the amount covenanted, but in other cases the tax relief is subject to a limit of 5 per cent of the covenantor's income. Eliminating tax relief on covenants from next year, except for those in favour of the incapacitated, those aged 65 years or over, to colleges and universities and certain human rights bodies, is a worthwhile move. I am sure we are all aware of the widespread abuse of covenants. We have all heard of the so-called dinner table covenants where one person covenanted in favour of another's child for a certain amount of money and that person covenanted in favour of another and so on around in a circle and it was practically impossible to detect irregularities. Such practices were widespread and cost the Exchequer a great deal of money. They cannot be defended on any grounds. I welcome the closing off of that significant loophole.

I share the previous speaker's concern regarding common law couples. As many people will be adversely affected by this measure I would like the matter teased out on Committee Stage. It should be examined in a much broader context because, for tax purposes, common law couples should be treated in the same way as married couples. This is the case under the social welfare code and our tax legislation should adopt a similar approach.

The revision in the residential property tax provisions will be widely welcomed, particularly in Dublin. I was one of those who criticised the changes introduced last year principally on the basis that they militated against people living in Dublin where house values are higher than elsewhere. They also militated against those in the PAYE sector. While I accept that much of the criticism last year was over the top, it is important to bear in mind that the question of taxation is a sore point for those living in Dublin, many of whom are on low and middle incomes and believe they are carrying an unfair share of the tax burden. There is a perception that taxation is not applied fairly throughout the community and that Dublin people take the brunt of it. The residential property tax was seen as a further example where those living in Dublin and the PAYE sector would have to pay more than their fair share.

We must examine the possibility of shifting the burden of taxation away from earned income and moving it towards wealth. This was the thinking behind the changes in the residential property tax last year. There are many different types of property and modest family homes should be the last type of property to be hit for tax purposes. We must examine honestly the various forms of wealth, such as large land holdings, wealth, art treasures, rented property, privately owned boats, aero-planes and so on. If we are serious about widening the tax base and bringing about greater equality we must examine the matter honestly.

I also welcome the provisions for rent relief covering tenants in private rented accommodation. This measure will reduce the burden on tenants but, more importantly, it will improve landlord compliance. The Bill also includes an important amendment to the Income Tax Act, 1967. Until now the Revenue Commissioners did not have access to information on private landlords whose tenants received rent allowance from health boards. Substantial amounts of public money are paid to private landlords under this scheme. Last year in the Eastern Health Board area alone a sum of £25 million was paid to private landlords by way of rent allowance. Health Boards will now be obliged to provide the Revenue Commissioners with a return of payments to landlords in relation to rent or rent subsidy. This is long overdue and very welcome because of the serious loophole in the law.

Section 18 amends section 17 of the Finance Act, 1970 and deals with payments made to subcontractors in the construction, forestry and meat processing industries. This will permit the Revenue Commissioners to make regulations covering such contracts. These measures will introduce a level of transparency into those industries so that contractors will know exactly the conditions under which they are being employed. I am sure all Members are aware of the widespread abuse that takes place regarding employment in those sectors. In view of the scale of abuse, the penalty of £1,000 set by the Minister for failure to comply with the regulations should be revised upwards.

Another important section in the Bill covers tax relief on fees for third level private colleges. Population trends, combined with more demanding job markets, have brought about a large increase in the number of young people seeking places in third level institutions. A number of private colleges are now in operation and I welcome the provision to allow tax relief at the standard rate on tuition fees paid to approved colleges. I note the Minister for Education will approve the college courses and the level of fees eligible for tax relief and that the courses will have to be full-time undergraduate courses of at least two years duration. The current system of administration for third level grants denies the children of many PAYE workers assistance towards maintenance costs and has caused hardship in a number of cases. I congratulate the Minister for Education on taking the radical step of abolishing third level fees for State funded institutions, a measure that has been widely welcomed. This further provision aimed at people whose children were unable to secure places in State colleges and have opted for private colleges will also be much appreciated.

I would welcome a debate in this House, and indeed nationally, on the question of tax reform. Listening to the previous speaker, Deputy Cullen, commenting on the need for tax reform and our complex system, one would not believe that a Minister from his party was in charge of the Finance portfolio for the past few years. The Progressive Democrats, where Deputy Cullen spent his previous incarnation, refer a great deal to tax reform, but what they are talking about is reducing the top rate of tax for the big earners. All of us mean different things when we talk about tax reform. There is need for an open and honest debate in the House on the question of tax reform and on what we want our taxation system to achieve. The first step in reforming the system would be to ensure a good compliance rate. This is another sore point with many people because of the perception that many are getting away with paying little or no tax. Nobody likes paying tax, but for a taxation system to have the public's general acceptance it must be seen to be fair. Unfortunately, this has not always been the case and the revelations of the beef tribunal did nothing to help the public's perception of the rules. While I welcome the provisions of the Bill, I am somewhat concerned that the system remains incredibly complex and as long as this is the case there will always be tax shelters and loopholes. Our aim in reforming the taxation system must be greater simplicity. We must strive for equity in taxation.

This year's budget brought good news to most people and the Bill before us gives legislative shape to it. The various changes in income tax rates and the exemptions for low paid workers are welcome and long overdue, but much remains to be done in this area.

The main thrust of the budget was to make it a little more logical, feasible and desirable for people to come off the dole and to take up and keep a job. If our economy is to move into top gear we must tilt the balance in favour of people who want to work. We must use imagination, flair and common sense to show that it pays to work. Policies should be geared towards getting people back to work and this should manifest itself in a two pronged attack on unemployment. There must be something for employers. It should not cost an arm and a leg to employ a person. The decision to increase the income tax threshold, below which the lower rate of employers PRSI of 9 per cent applied, from £9,000 to £12,000 is welcome. It gives the employer some respite.

The reduction in corporation tax from 40 per cent to 38 per cent will have some effect, particularly for bigger companies. From the worker's point of view, particularly the lower paid worker, comparisons will always be made between what they earn and what they would receive on the dole. There is nothing more soul destroying for a person who has a job and wants to work, than to realise at the end of the week that he is worse off than he would have been if in receipt of unemployment assistance. For unemployed people who genuinely cannot get work — unfortunately there are thousands of people in this category — it is not a bed of roses to rear a family on our level of social welfare. Our priority must be to get as many people as possible off the dole so that there will be more money for the fewer number of social welfare recipients who should get more in an ideal world.

The services industry will become the largest provider of jobs in the future. Every effort should be made to help people come off the dole and employ themselves. In recent times I met a number of people in my constituency who made that transition. It was a painful experience for them because numerous obstacles were placed in their way. This budget will remove only some of those obstacles. There should be much greater flexibility and liaison between the Department of Social Welfare, unemployment exchanges, FÁS and other interested parties. I look forward to greater integration and streamlining in this regard, particularly when European Union funds are used to encourage initiative and enterprise.

I am amazed at the number of little empires in every county where people seem to work to an agenda drawn up for a single purpose but which is not user friendly. The people delivering specific services are doing the job they are paid to do, but until some overall group ensures there is flexibility in the system, many people will not have jobs who could otherwise have them.

The decision in section 10 to provide for special measures aimed at improving the position of those most adversely affected by the taxation of short term social welfare benefits is welcome. However, many people are genuinely bitter that their disability and unemployment benefit is being taxed. Many people in my area are angry about what they see as a tax on sickness. I welcome the first £10 of unemployment benefit being exempt from tax from 6 April 1995. The tax on disability benefit is a great bone of contention in families where there is much illness and it is extremely difficult to explain to them that it is in the interests of all concerned that all income be assessed for income tax. That is one of the main problems with the whole system. I understand it is important to stremline it but it is difficult to explain the system to people who are extremely ill.

I compliment the Government and the Minister for Education on the decision to abolish third level fees. Third level education is a right for our young people and this is a signal that the State is interested in their educational welfare. I am somewhat concerned and cannot understand why some private colleges such as the Mater Dei Institute are not included in this proposal especially as graduates from that college and others go directly back into providing education. Will the Government consider that aspect because it is unfair to exclude such colleges?

I welcome the decision in section 21 to provide for the continuation of stock relief for farmers at 25 per cent for a further two years up to 1997. The decision to provide for stock relief at a rate of 100 per cent for four years for young farmers who first become chargeable to income tax in respect of profits or gains from farming for the years 1993-94, or indeed any subsequent year of assessment up to 1997-98, is also to be welcomed. The many young farmers I meet particularly welcome this measure which sends a signal to them that we care about them and we want to see them setting up a business.

On section 22, I would like the Minister to explain on Committee Stage the tax treatment for farmers in respect of profits arising where cattle herds must be disposed of because of statutory disease eradication measures. This is an important section because heretofore, if a farmer had his herd depopulated because of brucellosis or TB before 6 April, and if he had subsequently received compensation from the Department of Agriculture, Food and Forestry and the salvage value from the meat factory, he had much more money in his bank account than he normally would have. That money had to be declared to the Revenue Commissioners and was taxable. However, a farmer must have the tools with which to work. A livestock farmer whose herd has been cleared of TB must begin all over again and the process is normally financially painful because one usually buys more expensive stock. The farmer was taxed in a year during which he was not on a level playing pitch and he could not even claim back that tax the following year. If the meaning I take from section 22 is correct I greatly welcome it but I hope that people who have gone through the trauma of herd depopulation because of animal disease will not have impediments placed in their way. I look forward to the Minister explaining this measure in great detail on Committee Stage.

In his contribution Deputy Cullen made many remarkable statements, perhaps because he has not been a member of Fianna Fáil for very long. The Deputy need look no further than the party he has now joined to see large scale tax evasion. I do not know where the fault lies but one can consider the Goodman débâcle, the passports for sale scandal and so on. The public wants greater accountability. People paying their taxes should not be unnecessarily hindered but it is important to eliminate the type of fraud we have experienced with its consequent cost to taxpayers.

The allocation for county roads this year was the second highest since the foundation of the State but less than last year's allocation which included an additional £10 million from the amnesty. County Galway gets almost £6 million of the £102 million allocated for county roads. However, that is not enough. We did not get enough last year, the year before or at any time in the past ten years. Rural Deputies will have to make people understand that 85 per cent of the journeys made by people in rural areas are on roads with huge potholes and that is not a proper environment. We all accept that we need the by-passes to conduct trade but many people in rural areas may only travel on the by-passes four times a year. As a community we must acknowledge that more money will have to be siphoned off to the county road network. The review of this matter is nearing completion and I hope the Government will do something in the immediate future.

People who pay service charges are now entitled to an allowance at a standard rate of tax up to £150 for charges paid in full and on time. There is really no difference between this and the imaginative schemes initiated by the local authorities to get people to pay their service charges on time. It is vital that the message goes out that people have to pay their service charges. We would all like not to have to pay service charges but successive Governments have found that they have insufficient money to fund local services. It is incumbent on everyone to pay for services such as water or refuse collection unless the charges are waived. If the message has to go out that those who fail to pay their service charges will be served with a court order, so be it. I have no great problem with that. I agree with Deputy Cullen that we have no other way of funding local services as central Government has failed to find the extra money required to fund what we have to do locally. It is against that background that tax relief at the standard rate of tax on service charges is welcome and I hope the people will react positively to it.

Sir, I wish to share my time with Deputy Ó Cuív.

Is that agreed? Agreed.

I was disappointed on two fronts with the Minister's speech. First, he did not mention the peace process or how his Department could support it and, second, he did not refer to the currency exchange rate against sterling and how this is affecting our exports to the UK. The punt is valued at £1.02 sterling and when bank commission is taken into account the punt is worth £1.04 sterling. A textile factory in my constituency, employing 150 people, exports 45 per cent of its production to the United Kingdom. It is a niche product. They do not have alternative markets in the European Union for it. During the last currency crisis the company lost very heavily but it was bailed out by the market development fund. The management of the company claim that unless interest rates are reduced firms such as this cannot survive. This industry has continued through thick and thin over many years and employs a substantial number of workers. The mushroom industry is also feeling the pinch. I believe interest rates will have to be reduced if jobs are to be maintained, especially in firms which have borrowings.

It is generally accepted in the Border region that if the exchange rate for the punt goes over 95p sterling we face difficulties. If we are not to have a real problem in maintaining jobs in export industries the Minister will have to have a policy to deal with this.

I am a member of the County Monaghan Enterprise Board. We have targeted the food industry and tourism as areas where jobs could be created. It was hoped that food products such as poultry could be exported to the UK but the currency rates problem puts that on hold.

While I would not question the sincerity and support for the peace process of any political party it is hard to reconcile the Government's attitude to funding for development in the Border region. Following the peace initiative public representatives, including myself, called for a review of the operational programmes, in particular the operational programme for transport, to take cognisance of the additional traffic which has built up and the increasing tourist numbers as a result of the peace process. The allocation of funds under the operational programme 1994-99 for national primary roads was drawn up prior to the cessation of violence. Out of a total budget of £1,000,099,000, only £14.5 million was allocated to the two main arteries, the N2 from Derry via Monaghan with 45 miles of national primary route through my county and the N3 from Enniskillen via Cavan. The allocation in respect of those routes represents 1.3 per cent of the total and most of the work was carried out before 1995. There is an increased volume of traffic on the Dublin-Derry road resulting in lengthy delays in towns from Aughnacloy to Ashbourne. There are delays of up to 30 minutes in Monaghan town at peak periods. A few years ago we were promised additional funding for road alignment and by-passes. Instead we have been allocated 0.5 per cent of £1 billion. The Departments of Finance and the Environment must look at this if they are serious about cross-Border business and tourism.

I put down a question asking the Minister if he would provide funds in 1995 to commence work on the proposed Monaghan town inter-relief road in view of the traffic hold-ups on the Dublin-Derry primary route. The Minister replied that the matter was one for the National Roads Authority but someone must take responsibility and distribute the available funds in a more even-handed way.

I also put down a question to the Minister for the Environment asking what proposals, if any, he had to review the operational programme for transport 1994-99 in view of the peace process which has generated additional cross-Border travel. We put it to Mr. Poulsen, Assistant Deputy Director, that these programmes should be reexamined in light of the peace process. The answer I received stated there was provision in the operational programme for a mid-term review in the first half of 1997 and that this would provide an appropriate opportunity to thoroughly assess the permanent impact of the peace process on cross-Border travel. Does the Minister mean that if the peace does not hold money will not be allocated to that region? In his reply he stated that in the meantime there would be substantial investment under the operational programme and the Cohesion Fund for cross Border road and rail links. He also stated that £6 million had been provided under the INTERREG programme. However, that money was substituted for Exchequer funding of £6 million and was not in addition to it.

In that region there are also national secondary roads, the Belfast road to Monaghan and Cavan and the link to Galway. Money has been allocated for the Ring of Kerry, Cork, Killarney, Galway, Clifden, the Shannon Estuary, Athlone, Boyle, Kilkenny and Clonmel. The criterion used to select areas is improved access for economic development, industry and tourism and to reduce road accidents. However, the Border region does not receive one penny and this position must be reviewed immediately. We are not looking for preferential treatment but after years of neglect by various Governments we do not wish to return to the Coalition Government days of 1983-87 when the economy of the region was devastated by a greedy Government and Minister for Finance taking the easy option of collecting revenue through increased excise duties. Not only was the region devastated, the national debt doubled from £12 to £24 billion in those four years.

When the Book of Estimates was published a few months ago I realised that the grant-in-aid for the task force on special housing aid for the elderly which is administered by the health boards was cut in half. I raised that matter on the Adjournment. In 1994 the health board of which I was a member received £355,000, some of which was a result of the tax amnesty. We thought that since the finances were in a healthy state this year we would receive the same amount. Out of that money 530 old people's houses were repaired at an average cost of £660 per house. In some areas water and sewerage facilities were provided, in others minor repairs such as draught proofing were needed. Some repairs cost £2,000, others £200 or £300. I thought the Minister would have restored this funding and I ask him to do so now as this scheme represented great value for money.

The previous speaker mentioned the problems regarding county roads. From 1987 onwards Fianna Fáil increased the allocation for non-national roads but during that period many county councils drastically reduced funding from their own resources. As a result, roads in many areas are substandard and inadequate for the needs of industry and tourism. Community groups play their part in revitalising areas but roads are a basic infrastructure and additional funding must be secured.

The Washington Trade and Investment Conference will be held shortly. I asked the Minister for Foreign Affairs the steps he had taken to ensure that agencies in the counties south of the Border made a well documented submission. He stated that the conference was a matter for the relevant US authorities but it was his understanding that representatives from each of the Border counties would be invited. In the last month or so it has been very difficult to get any information on that conference. At the Forum I asked that foreign organisations with major investments in the US would use their influence to secure joint ventures for the Border region but I am disappointed that more work has not been done as time is running out. That provides an opportunity for co-operatives and businesses who have contacts in the US to suggest proposals and ensure that the counties south of the Border will be in a position to secure for themselves the funding we have been told will be available. Under that programme employment, urban and renewal regeneration, cross-Border development, social inclusion, productive investment and industrial development will be assisted. I hope a greater effort will be made over the next few years.

Debate adjourned.