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Dáil Éireann debate -
Wednesday, 12 Nov 1997

Vol. 482 No. 6

Private Members' Business. - Tax Relief on Charitable Donations: Motion.

I move:

That Dáil Éireann, recognising the invaluable work being undertaken by those charitable organisations which constitute the Irish Charities Tax Reform Group, acknowledging that tax relief similar to that being sought by the Irish Tax Reform Group is available in other European jurisdictions and in the United States, Canada and Australia, calls on the Government to allow tax relief on certain corporate donations to charities, to announce this decision in the Budget Statement of 3 December 1997, and to implement it in the Finance Act, 1998.

I wish to share time with Deputies Deenihan and Perry. The Irish Charities Tax Reform Group has not been long established. Its membership consists of the main charitable organisations which do such excellent work with which all Members are familiar and in one way or another have praised, endorsed and sometimes assisted them. The Irish Charities Tax Reform Group wants every Member to support the motion in my name. I know the policy it proposes has virtually universal support among not only members of Fine Gael but of all parties and Independent Deputies in this House.

We are fully aware of the work of individual charities and we can assist their work in ensuring the funds they have at their disposal are substantially increased. This will be done if the House agrees the motion, if the Minister for Finance announces on budget day that he will introduce tax relief on certain corporate donations to charities and if he implements that decision in the Finance Act, 1998.

At present, tax relief is available in respect of payments to certain charities whose activities take place abroad, particularly in the Third World. There is no tax relief on either personal or business donations to charities whose sphere of operation is in Ireland. This is surprising as our tax code contains a multiplicity of tax reliefs. It is very surprising that a code which is so well endowed with reliefs of all sorts has never been amended to exempt from tax donations made to charitable organisations by individual donors or businesses.

It is doubly surprising because there has been a tradition in this country of imitating tax reliefs which apply in other jurisdictions, especially reliefs available in the United Kingdom. The relief being sought through this motion is available in many of our European partner countries, in the US, Canada and Australia. From advertisements on British television I know that in the United Kingdom tax relief is available even on donations to charities by individuals. The tax authorities in the UK have a mechanism in place whereby they top up donations made by individuals to charities by the appropriate amount of relief due to the individual. This guarantees that the amount available to charities is increased substantially as the tax benefit accruing to the individual is transferred to the charity.

The motion before the House makes a far more modest proposal. It confines itself to the proposal which is being made by the Irish Charities Tax Reform Group in their correspondence to Members of the Houses of the Oireachtas. The proposal is confined to certain donations made by businesses and deals with the principle of the issue rather then the detail, which is more appropriate to the Minister for Finance and the Finance Act. The detailed proposals are that business donations made to certain charities should be allowed for tax purposes as normal business expenses; tax relief should not apply to either outlandish or nugatory amounts or to donations of less than £100 or in excess of £10,000 made to individual charities; it should be subject to an overall ceiling of £50,000 or 10 per cent of taxable profits in respect of individual companies. This will avoid painstaking paper work of little benefit to charities in respect of small donations while at the same time provide a ceiling which will alleviate fears that the relief may be used in a manner which would operate in an unacceptably adverse way to the Exchequer. It would allow successful Irish businesses to make donations of £10,000 to five charities of their choice and to claim tax relief on these donations in any particular tax year. It is a modest proposal which I know the Minister favours in principle and I ask him not to press the amendment tabled to the motion but to accept it in the principle in which it is put before the House and to give a commitment to act in accordance with its terms.

Relief should be confined to charities with a registered CHY number. The Revenue Commissioners have a straightforward scheme in place for supplying eligible charities with CHY numbers, operated through their office in Nenagh. Naturally, Deputies would like to ensure that donations to which relief applies would go only to properly run charities which are totally above board in their activities. Consequently, if the Minister for Finance decides to introduce the scheme I advocate in the 1998 Finance Act, I expect him to introduce conditions relating to the eligibility of charities, including conditions in respect of annual audits, filing returns with the Companies Office and compliance with other conditions or provisions of company law which the Minister may consider appropriate to ensure the relief would operate as intended by Members.

It is not the first time this case has been made in the House. During the debate on the last Finance Act, the Minister for Finance tabled amendments to achieve exactly what I now advocate. The then Minister for Finance, Deputy Quinn, was in favour of the relief proposed but reluctantly did not accept the amendments. I understand his advice was that his officials and the Revenue Commissioners were afraid that too wide a door might be progressively opened and that the cost of the extended relief might be difficult to justify and onerous on the Exchequer. This fear would be well founded if tonight's motion resulted in the introduction of general relief for both personal and business donations without any ceiling on the amount of the donation. Some charities would regard this as the ideal position. We know, however, that frequently in life and politics the best is the enemy of the good and that the representatives of the charities who have contacted Members would be extremely happy if the motion before the House was accepted by the Minister and if relief was introduced but confined to certain business donations with appropriate ceilings and conditions as to how the scheme would operate.

It is estimated that corporate donations in Ireland to charities amount to about £12 million per annum. The rate of tax applying to the corporate sector varies. Manufacturing industries and certain financial services pay a maximum rate of 10 per cent while other businesses pay a maximum rate of 36 per cent. Consequently, the relief to individual companies would depend on the sector in which they trade. The general estimate which I do not think is too far off the mark is that the amount of relief which would be levered by this motion would be around £3 million.

My proposal, if accepted, would result in tax relief of this amount applying to different companies. If this were the end of the affair, such relief would be of very little benefit to charities because it is the donor companies, rather than the charities, which would benefit. The charities and those who run them are confident that the existence of the relief would encourage the corporate sector to significantly increase their donations. Rather than companies pocketing the new relief it would, in effect, be transferred to individual charities through increased donations. I would prefer the UK system where the relief to which a business is entitled arising from a charitable donation is paid directly to the charity rather than to the individual business with the compliance of that business. It would be a better scheme if the relief were remitted directly to the charity rather than to the donor.

Some observers and contributors to this debate may argue that this is much ado about nothing. They may assert that the amount of money involved is too small to make any significant impact on social injustice and that the real needs of individuals and communities are of greater magnitude than £15 million or an additional £3 million could meet. Many people outside this House would be of the view that we should always deal with grandiose sums in here. Deputies would take a different view; they are well aware of the ways in which social injustice can be effectively targeted by relatively small amounts of money. Other people would argue that the State should undertake to fund the activities currently being carried out by charitable organisations. This is an age old ideological argument which is frequently made by the extreme left of the political spectrum. Such an argument maintains that the work carried out by charities rather than alleviating social injustice ensures the State is relieved of the responsibility of dealing with these issues. As charities can never do the job in full because of limited resources they, in some ironic way, provide a safety net for an indolent State which is relieved of its responsibility and consequently does nothing. In my view that argument is rubbish; it may have been true in the 19th century but it is certainly not true in modern democracies. I do not want to dwell on the issue, I merely mention it as a potential argument.

I would like to acknowledge the excellent work done by charities over the years. If they had not been active in so many areas, the work they carried out might not have been done at all. We have a very proud tradition of co-operation and partnership between public bodies and voluntary organisations. This partnership has enhanced and improved the delivery of many social services and the work of charities, in particular, has dramatically improved the quality and degree of assistance available to persons with needs, problems and disabilities.

The amount of relief advocated here is approximately £3 million. If this proposal succeeds corporate donations to charities in 1998 will be approximately £15 million. This may seem small in contrast with the enormity of the social problems of which we are all only too aware. In this context, however, it is worth recalling that £15 million approximates to the total annual expenditure of the Society of St. Vincent de Paul which provides real practical assistance to over 200,000 persons in Ireland. We are not talking about nugatory amounts but about amounts which can be used to supplement the work already being carried out by State agencies and Government Departments, money which, in the hands of people living in communities, can be very effectively targeted to supplement what is already in place and to provide additional relief and assistance where necessary. If we were to take the Society of St. Vincent de Paul as an example of the way in which so many people can be assisted through the expenditure of £15 million, we would have a clearer view of what the charities are looking for when they seek this relief.

No words of mine could sufficiently praise the work of the charitable organisations. I commend and congratulate them and their dedicated workers, many of whom are voluntary. I also compliment the dedicated professional staff employed by the charities who ensure they are effective, efficient and have a high reputation. If there were any question mark over the charities in Ireland, people would stop donating to them. It is because they are of such high repute and are held in such high regard that people continue to donate more to charities on a per capita basis than those in any other country. This is due to the dedicated staff and to the voluntary workers involved in charitable organisations. I do not want to single out any one charity but I have been contacted not only by the Irish Charities Tax Reform Group but by several of the individual charities which are members of that group and by all the principal charities which are household names. I commend them all for their excellent work and I commend this motion to the House.

I support this motion which calls for tax relief on corporate donations to charities. That is also the proposal which the Irish Charities Tax Reform Group presented to the Minister for Finance recently. The motion and the group's proposal are set against rapid economic growth and buoyant tax receipts. They are made in the knowledge that Ireland remains one of the very few advanced economies which does not allow corporate bodies to offset for tax purposes a proportion of their yearly profits against donations to a variety of charitable institutions. Most OECD countries permit companies to make donations, free of tax, to properly registered charities in their home country. Apart from altruistic motives, this activity is seen by many companies as an important form of promotion. It also serves the purpose of funding many types of charitable agencies working in vital areas.

In the US, UK, France, Germany, Italy, Hungary and Japan it was found that the non-profit sector as a whole employs something of the order of 11.8 million people with a further 4.7 million unpaid volunteers. The non-profit sector's operating expenditures in these countries are equal to 5 per cent of GDP. The non-profit sector employs one in every 20 people and one in every eight service jobs in these countries. One out of every seven new jobs created in the US, Germany and France is created by the non-profit sector.

We should ask who the members of the Irish Charities Tax Reform Group are. The membership list reveals that most of them are prominent charities which deal on a daily basis with the problems of poverty, illness, homelessness, inadequate services for people with disabilities and many of the other ills which continue to beset this country. Were it not for the commitment and dedication of charities' paid employees and the large number of volunteers, far more pressure would be placed on the national finances and the Minister would not find it as easy to balance his books as he currently does. There would certainly be a major burden placed on our health and welfare services but for the great work which charities are doing. As somebody who is constantly involved in fund-raising for one cause or another, I fully appreciate the difficulty of getting money when so many other charities are competing for it. People are becoming frustrated by the level of demands on them from charities and fund-raising groups. However, the Irish are a charitable and kind nation, and they still give, out of Christianity, out of the goodness of their hearts, although under protest at times.

Deputy Noonan's proposal would provide a source of funding that would appeal to the corporate sector. I am involved in a project in Kerry which benefits from relief from the Department of Finance contributions. We have found this to be a very important part of our fund-raising initiatives and have collected a large amount of money because there is a tax benefit for the contributors. I am convinced if this motion is accepted it will ease the burden of collecting and servicing initiatives on the Irish Charities Tax Reform Group who provide support and services to the weaker and more vulnerable sections of our community.

There is no need to remind anyone in this House about the contribution of the voluntary sector to Irish life. Many Members of this House have been glad in the past to call on local charities to come to the aid of one of their constituents. Without the thousands of volunteers who give of their time to work for charities and voluntary organisations, this country would be in a much poorer state. It should be noted that research in other countries indicates that the non-profit sector can be shown to employ one in every 20 people and provide one out of every eight service jobs, that at a time when it is sought to create jobs with the emphasis on manufacturing industry, it is important to realise that there is great job potential in the service industry. I have no reason to believe the Irish situation is any different.

The idea of tax relief on donations to charities has been considered in the past. Certain gifts to education, culture and the arts are deductible for tax purposes. Also, the principle of tax relief on corporate social responsibility is reflected in provisions relating to support for certain local enterprise development activities such as First Step and the Enterprise Trust. However, donations to the wide variety of other charities are disallowed, and this acts as a disincentive to companies to donate money to charity.

The Irish Charities Tax Reform Group have commissioned important research on this matter. Fifty-two per cent of the companies who responded to the research carried out by Fitzpatrick Associates said they would increase donations to charities in the event of tax relief being introduced. Companies want to give back to the communities out of which they have grown. Thriving companies, of which we have many in the current economic climate, want to be able to respond to the needs of the local community. More than this, they feel obliged to do so because they have grown out of the local community. Why then should the tax system act as a disincentive to this giving? Why should companies not be able to regard donations to charities as a legitimate business expense as requested by the Irish Charities Tax Reform Group? It is vital, if the Irish charitable sector is to continue to meet the required level of operation, that charities have further access to corporate sources of income. The limited scope of the present proposal ensures the cost to the Government would be small. Personal giving in Ireland is very high. However, this does not apply to corporate giving which is lower than it should be because of the absence of tax relief. The £11 million which would be likely to be donated from the corporate sector to charities in the event of tax relief being introduced is minuscule. When one considers that the Society of St. Vincent de Paul helps about 200,000 people annually on a budget of £15 million, it puts the £11 million in perspective. That is a significant figure which would greatly benefit Irish charities.

This proposal promoted by Deputy Noonan would bring Ireland into line with other European countries. The level of support for charities by the corporate sector is not in proportion to personal giving. This proposal would remove the most frequently cited obstacle to corporate giving, namely the absence of tax relief on donations. When companies are giving to charities, they take out advertisements in charity magazines in order to get over the difficulty posed by the absence of tax relief. This is an inefficient practice which could be eliminated if our proposal were introduced. It would also allow all charities to obtain additional sums from a previously untapped source and, accordingly, to extend the range of services they offer. It would be of particular benefit to smaller charities who do not have the resources to mount large-scale fund-raising campaigns and would also, to a limited degree, compensate charities for revenue lost to the national lottery which has taken much of the revenue from local charities. We need this tax relief because, despite economic growth, the massive increase in house prices and in the sale of consumer products, poverty and social exclusion in our society remains at unacceptable levels. That is commonly accepted. We have only to go down the street to see the number of people begging and living rough in the city quite close to this building. We can see examples of marginalisation throughout our society, especially in this city.

Charitable organisations, including those represented by the Irish Charities Tax Reform Group recognise and deal every day with poverty, illness, homelessness and services to people with disability. They provide services to the weaker and more vulnerable sectors of the community, including the young, the old and the disabled. They are, however, the first to admit that only a small percentage of needs are being effectively met. The only obstacle to provision of a more effective service to those in need is the lack of funding.

I appeal to the Minister to accept this motion. It would send out the wrong message to people who are working hard in local voluntary and community groups and who are frustrated by the level of support they receive particularly from Government and Government agencies if the House were to divide on this issue. Acceptance of this motion would send out a clear signal that we are listening to them and taking on board what they are telling us. Because they represent so many people, the Minister would get much credit if he accepted our proposal. Given that the Minister is a pragmatist and has always listened to various demands from this side of the House, he should look at this reasonable proposal. I appeal to him to accept it. The arguments for it are clear and straightforward. There is a very strong case. Opposition Deputies often make impossible demands by way of motion. This one is possible, it will not upset the nation's finances, and it is something the Minister could justify to his Cabinet colleagues.

I am delighted to have the opportunity to speak on the motion. Why is tax relief needed? Despite huge economic growth, a massive increase in house prices and the sale of consumer products, poverty and social exclusion in society remains at a most unacceptable level. This change would allow all charities to obtain additional funds from previously untapped sources and to extend accordingly the range of services they offer. I support the call for tax relief to be allowed on corporate donations as set out by the Irish Charities Tax Reform Group because it is simplistic. Companies would be allowed to write off their donations as ordinary business expense. As soon as guidelines would issue to companies about the relief, little or no further administration would be involved from the Government's point of view. The proposal would benefit all charities, but particularly smaller charities which is very important. Many small charities do not have the wherewithal to mount large fund-raising campaigns but if a tax relief was introduced on corporate donations they would be in a position to make contact with local companies, show them their work locally and request donations. This has enormous potential.

It is impossible to put a value on the amount of work done voluntarily. Local fundraising helps local services. For example, Daffodil Day provides funds to support local hospices and home care nursing in the community. The hospice in Sligo is doing great work. If the voluntary element were taken from it, it would be extremely difficult for it and similar hospices which provide invaluable care to continue. They need further funds as it is.

According to the Irish charities group proposal companies when making donations to charities would police them. They would not give their hard earned resources out in a reckless manner. They will want to ensure the local charity they support is bona fide, well run and carrying out valuable charitable work in the community under supervision. This form of fundraising is efficient. Fundraising events inevitably incur higher administration costs compared with this proposal. It would tighten up fundraising considerably on a local basis. Companies are run devoid of sentiment and a businesslike approach would be used in dealing with contributions. Working with charitable organisations is very effective for companies in terms of public relations.

I have no doubt that charities will respond positively to calls for more openness and transparency on how funds are spent. Deputy Noonan pointed out that controls would be included in a Bill to ensure transparency and adherence to the companies Acts. Most OECD countries allow tax relief on donations to properly registered charities. Virtually every EU country allows tax relief on charitable donations.

IBEC and the Small Firms' Association, which represents the backbone of small industry, support this call. This proposal is aimed at average Irish companies. In the current economic climate there are in excess of 150,000 small to medium-sized companies doing well which would like to be seen helping local charities, such as the Society of St. Vincent de Paul which does great work throughout the country. Despite the economic boom, a great deal of poverty still exists and this measure would tap into a new source of funding that would benefit many people in need. Many people are marginalised and earn low salaries. I am aware of the great work done by the Society of St. Vincent de Paul in Ballymote and the number of people it helps is amazing. If companies in the region knew they would obtain a tax write-off on a donation it would give them a bona fide excuse in their accounts to make a contribution to those causes.

The proposal will benefit all charities, but particularly small and medium-sized charities which cannot mount substantial campaigns or enter into sponsorship arrangements. There are companies which would genuinely like to help people but need reform of the tax system to do so. It will result in imaginative ways of obtaining donations from companies. If employees of a company decided to give £3,000 as a collective contribution, the employer could match it knowing that it would be subject to a tax write-off.

A sum of £3 million has been mentioned for expenditure but the measure would be a selffinancing way to collect money. It would benefit and tighten up charities. The economic boom has been very good for many people but there are many for whom there is no benefit and we are obliged to help those people. I appeal to the Minister to consider incorporating this measure into the budget. I fully support my colleagues on this issue.

I move amendment No. 1:

To delete all words after "That" and substitute the following:

"Dáil Éireann

—acknowledges the valuable work being undertaken by the large number of charities operating over a very wide range of areas.

—also recognises the considerable resources and exemptions from tax already available to charitable bodies.

—notes the submission from the Irish Charities Tax Reform Group and acknowledges that the Minister for Finance will give careful consideration to it during the preparation of the budget in December."

Domestic charities sought the introduction of a tax relief on donations since a relief on personal donations for Third World charities was introduced in the 1995 Finance Act. As Deputy Noonan did not embarrass me by quoting me except for brief references to debates on Finance Acts over recent years I will not embarrass him or his colleagues by asking why the previous Government did not do anything about this.

I readily recognise that the work done by charities relieves the Exchequer of a considerable burden. I wholeheartedly agree with Deputy Noonan's reference to people on the far left of politics when I was a student who used to make the nonsensical point that the State should provide everything. If charities were not doing their work, the State would have an inordinately large burden. One of Ireland's pluses which will hopefully continue into the next millennium is the voluntarism of its people. There is a stronger ethos in certain regions than in others. Our growing prosperity may dampen traditions in many respects but I hope it does not change that aspect of our culture and continues into the future.

I also recognise that the dedicated staff of various charities do outstanding work. The lobbying carried out by the Irish Charities Tax Reform Group has been very effective. It has brought this matter to notice over recent years and has been successful. Complex issues are involved and I will endeavour to address them. I think the House will agree that domestic charities play a vital and cohesive role in society. The Government is fully aware — as the previous Government was — of the important work done by the domestic charities and this is reflected in the significant sums of money provided to those charities from public funds every year.

The Irish Charities Tax Reform Group has been campaigning strongly for the introduction of a tax relief on corporate donations between £100 and £10,000 subject to a maximum company contribution limit of 10 per cent of company income or £50,000, whichever is the lesser. As Minister for Finance, I receive many requests for tax relief from many worthy causes in the lead up to the budget. It is not possible to accede to all these requests and the normal procedure is that they are carefully considered in the context of the resources available for the budget.

I am not a magician or a Harry Houdini who can escape with one bound from the constraints imposed by budgetary parameters.

The Minister did not do so badly today.

My background in another sphere stands me in good stead in some matters.

I cannot satisfy the many demands for extra funding for entirely laudable causes. If I want to meet any of the demands made on me I have to prioritise the list and other Ministers must do the same. This is the essence of framing a budget whether for a nation or one's finances. As I pointed out to some groups I met recently, the principles of sound finance are not complicated. They can be made to look complicated by some people but essentially it is a matter of matching what one can prudently spend on one side with what one can prudently tax on the other.

I have taken an interest in the group's submission, as I did in Opposition. At my request and as part of the preparation for the budget next month senior officials of my Department met representatives of the Irish Charities Tax Reform Group to discuss its proposal in some depth without committing to its introduction. I am grateful to the group for setting out its proposal with such clarity and precision.

It is often claimed that the Irish Charities Tax Reform Group's proposal is only seeking a level playing field with Third World charities. However, there is a distinct difference between the group's tax proposal and the tax relief available for Third World charities. First, the relief for Third World charities is only available for personal donations and not corporate donations and, second, it goes to the charity, not the donor, as proposed by the Irish Charities Tax Reform Group. This is an important distinction.

Before discussing in detail the Irish Charities Tax Reform Group's tax proposal it is relevant to set all such requests for relief and resources in the context of Ireland's recent economic performance. This performance has led to heightened expectations in certain quarters and I have spoken elsewhere about the consequences of such expectations. Ireland has enjoyed strong economic growth over the past four years. This year growth is expected to be 7 per cent or more — the fourth year in succession of growth of this magnitude. We are broadly acknowledged as being Europe's economic success story of the l990s, with increased prosperity, stable prices and a level of employment growth which is the envy of many larger countries. However, the question about how we use this growth and its subsequent benefits is a pressing one. We still have a very high level of debt. While this has been falling as a percentage of gross domestic product, the physical amount of the debt remains and has to be serviced and ultimately repaid. This can only be done by the Government operating budget surpluses.

The Government's programme, An Action Programme for the Millennium, sets out a commitment to eliminating Exchequer borrowing over the next two to three years. At this stage of the economic cycle we should be using the opportunity of strong growth to run surpluses and reduce the debt burden. This approach is consistent with the terms and the spirit of the stability and growth pact which is an integral part of EMU.

The medium-term outlook for the economy also points to the need to run budget surpluses now. It is clear that the economy is growing at a rate which cannot last indefinitely. It is expected that over the medium term growth will moderate from the current very high rates, although it should remain higher than the EU average. It is only prudent to plan for that eventuality.

Moreover, in recent years the economy has benefited from substantial EU Structural and Cohesion Funding. The economy still has very significant investment needs and I am confident that the EU will recognise this and provide considerable further Structural Funding for some time to come. However, the prospective enlargement of the EU will make other demands on the Union budget and we must take account of the likelihood that EU Structural Funds to this country after 1999 may not be on the same scale as in recent years. It is vital that we maintain, to the extent necessary from our own resources, the essential infrastructural investment that our strongly growing economy requires, while of course continuing to respect the fiscal disciplines of EMU.

The current favourable demographic factors are also contributing to our strong economic performance at present but will diminish in the decades ahead. The long-term ageing of the population will lead to an escalation in health and pension costs which will place a burden on the public finances, and this will take place when labour force growth is expected to decelerate. The strong economic performance can give rise to heightened expectations. It is ironic that the nature of economic success is such that, if allowed, it can also sow the seeds of future failure. The strength of our current growth rates may generate an unrealistic set of expectations in relation to a dramatic enhancement of public services. It can also lead to expectations in relation to what is possible in terms of tax reform. Such expectations could undermine the conditions necessary for further economic and employment growth.

We have to be careful about how we use the benefits of our recent economic success. I am sure we all remember the consequences of the difficulties that were caused by political decisions taken in the 1970s and early 1980s and the subsequent need for fiscal rectitude.

Over the past ten years all Governments have undertaken tax reform and have appreciated the importance of tax reductions in increasing competitiveness and growth, thereby contributing to the creation and maintenance of sustainable employment. The main concern has been to redistribute the burden of taxation between the different sectors of production in favour of labour. The primary focus has, therefore, been on reducing the level of income tax while implementing base-broadening measures across the various tax heads. This strategy of concentrating on income tax reduction has also been guided by the desirability of achieving moderate wage developments through a consensus approach with the social partners.

Significant progress was made in improving the income tax system, despite at times the constraints of the serious imbalance in the public finances. The standard income tax rate has been cut from 35 per cent to 26 per cent and the top rate from 58 per cent to 48 per cent, substantially reducing marginal rates for the majority of taxpayers. The number of tax rates has been reduced from three to two, while personal allowances and the standard rate bands have been considerably increased.

The progress made in improving the income tax system can be seen from the following two examples. For a single person on the average production wage, which is currently estimated at approximately £14,800, the income tax improvements, when combined with changes in employees' PRSI, have resulted in their tax, PRSI and levies burden as a proportion of their gross wage falling from 36 per cent in 1987 to 27 per cent this year. In the case of a married couple with one earner and two children on the same level of income, the fall in the average tax burden has been from approximately 26 per cent in 1987 to slightly below 20 per cent this year. This is real progress. My Department has recently made presentations to a number of visiting delegations. One consisted of Scandinavian Members of Parliament who had come to see what lessons they could learn in getting their very high tax rates down — they are making pilgrimages here to seek the Holy Grail. This is a major turn around from the past.

Widening the tax base across the various tax heads has played a significant part in facilitating these improvements in the income tax system. The corporation tax base has been greatly widened through the abolition or restriction of reliefs, for example, the abolition of accelerated capital allowances, ending of export sales relief and restriction of section 84 loans. This has enabled the standard rate of corporate tax to be cut by 14 percentage points from 50 per cent to 36 per cent. Through this process the balance of incentives, as between capital and labour, has shifted greatly in favour of job creation. A wide range of reliefs and exemptions in the income tax code have been restricted or abolished, for example, life assurance premiums, share options, certain loan interest, 10 per cent dividends and ESR-Shannon dividends. In more recent years tax relief for covenants has been considerably limited and reliefs for mortgage interest and medical insurance premiums have been restricted to the standard rate of tax. In addition a number of new reliefs introduced have been provided only at the standard rate. Furthermore, disability and unemployment benefits have been made reckonable as income for tax purposes.

Changes in capital taxation have included the introduction of a probate tax. Changes in VAT and excise duties have been in line with Ireland's commitment to the single market. The standard rate of VAT has been reduced from 25 per cent to 21 per cent. In addition, there has been considerable simplification and consolidation of the rating structure, with a 12.5 per cent reduced rate now applied to a range of employment sectors.

The VAT base has also been extended to cover electricity and telecommunications. Excise duties have been increased on some energy products and on consumer products that are damaging to health, for example, tobacco and alcohol.

The enforcement of the overall tax system has been improved through tax administration measures, including the introduction of selfassessment, the extension of withholding tax and tax clearance systems. There has also been an increase in resources allocated to the various audit, investigative and compliance programmes in Revenue and in Revenue powers. Continued progress is required to further reduce the tax wedge for low to middle income earners, thereby improving the returns from and the incentives to take up employment. If this goal is to be achieved, particularly when account is taken of the proposed reductions in the standard rate of corporation tax, it is essential that tax reliefs are kept within reasonable bounds and the tax base broadened where possible. This approach has served us well over the past ten years. Consequently any proposals to widen existing reliefs or introduce new ones, no matter how laudable in their own right, must be carefully examined and judged against our overall objective of reducing the tax burden on earned income which facilitates the creation and maintenance of employment.

Before considering the proposal before us in detail, it would be useful to look at what constitutes a charity. As matters stand there is no comprehensive definition of what is a charity or what is charitable in legislation. The only definition which may be found for a charity is contained in section 334(3) of the Income Tax Act, 1967, and this only states that: ". .charity means any body of persons or trust established for charitable purposes only". Let us face it, this is not of much help. There is no guidance in legislation as to what the phrase "charitable purposes only" means and so it has been left to the courts to interpret that expression. The modern interpretation of what is meant by charitable purposes stems from a judgment in a court case as far back as 1891.

To this day, the four categories of charitable purposes as established in this case form the basis of what activities are charitable for taxation purposes both here and in the UK. These categories are: the advancement of religion, the advancement of education, the relief of poverty and other purposes beneficial to the community not falling within the other three categories. Deputies will agree the latter definition involving purposes beneficial to the community could include bodies that would not be considered as charities in the commonly understood sense of the term.

Before looking at what may be available in the current tax system for charitable bodies, it is important to look at the present supervision and regulation of charities, or rather lack of regulations. Unlike other countries, there is no register of charities in Ireland. In 1989 a committee under the chairmanship of Justice Declan Costello was set up to examine the position regarding charities in Ireland. Among other things, the group recommended there should be a system of registration of all organisations fund-raising for charitable purposes. Furthermore, the last Government through the Minister of State at the Department of Justice had established an advisory group to examine the whole area of charitable and fundraising bodies.

The Minister for Justice, Equality and Law Reform is the principal authority for the administration of charities law, including fundraising. That Minister also has responsibility for the Charities Act, 1961 and 1973. These Acts provide for the jurisdiction and powers of the Commissioners of Charitable Donations and Bequests in relation to charitable trusts.

In the absence of controlling legislation the whole area of charities can be complex and the general public's understanding tends to be uncertain and confused on occasions. This misunderstanding also extends to the role of the Revenue Commissioners in relation to charities. The Revenue Commissioners do not grant charitable status per se. They merely grant bodies which have proven their case certain exemptions from taxation.

My colleague, the Minister for Justice, Equality and Law Reform, Deputy John O'Donoghue, has included in his legislative programme the reform of the law relating to the administration and regulation of charities along the lines of the report of the Committee on Fundraising Activities for Charitable and Other Purposes — the Costello report — and the subsequent report of the Advisory Group on Charities and Fundraising Legislation — Burton advisory committee. The advisory group comprised representatives of organisations working in this area and reported to the previous Minister for Justice, Deputy Nora Owen, who referred the report to the Select Committee on Legislation and Security. The select committee issued a report early in 1997. Work is proceeding as quickly as possible on this legislation in the light of other legislative priorities.

In the absence of a proper statutory regulatory regime, members of the public with grievances may have no means of having them addressed. There would be no ready means for Dáil Éireann to ensure that charities are using the money raised with the support of any new tax relief in a proper manner. Such issues would have to be considered in framing any relief.

There is no general tax relief in the Irish tax code for charitable donations, although there are a number of designated reliefs for various types of charitable bodies. I intend to begin my consideration of this matter by briefly outlining the current tax regime for charitable bodies. Section 8 of the Finance Act, 1995, provides for tax relief in respect of personal donations to certain designated Third World charities. The donations have to be between £250 and £750 per annum. The 1995 measure was introduced in memory of the 150th anniversary of the Great Irish Famine and in recognition of the type and scale of the problems encountered in the Third World. The scheme of tax relief on personal donations to Third World charities also forms part of Ireland's official overseas development aid. By allowing certain personal contributions as a tax relief this allows people to exercise choice with regard to the agency to which they wish the State to contribute to our overseas development aid.

The amount Ireland contributes to overseas development aid has increased substantially in recent years. Third World charities benefit from Exchequer support through the overseas development aid. Ireland's contribution to overseas development aid in 1997 is £122 million, which is more than double the 1993 contribution of £55 million.

How does that relate to the motion before us?

I am explaining it. The Deputy should apply his mind to electing a new leader.

We have matters in hand.

If the Deputy needs advice on that subject I am willing to share with him my past experiences.

The decision to grant relief only to Third World charities is not a reflection on domestic charities but was introduced by the previous Government for the reasons outlined above. What the Irish Charities Tax Reform Group is proposing is a tax relief on corporate donations to charities whereas the tax relief for Third World charities is for personal donations.

I understand that to date the Minister for Foreign Affairs has designated 17 charities for the purposes of this relief. I also understand that to date the designated charities have not utilised this provision to any great extent. A body of persons or trust which meets any of the four categories of charitable purpose arising from the 1891 court case mentioned earlier is entitled to claim certain exemptions from the following taxes: income tax, corporation tax, where the body is incorporated, deposit interest retention tax, capital gains tax, capital acquisitions tax, stamp duty and probate tax.

By far the best known exemption available to charities is the income tax exemption found in sections 333 and 334 of the Income Tax Act, 1967. Under these provisions most types of income are exempt. As regards income from trade it is a requirement that the income must be applied solely to the purposes of the charity and this does not pose any difficulties generally. There is also a second requirement that the trade must be exercised in carrying out a primary purpose of the charity or the work connected with the trade must be carried on mainly by the beneficiaries of the charity. The position in relation to corporation tax and capital gains tax is similar to that for income tax. The profit or gain must be applied for charitable purposes only.

These are significant concessions. The Revenue Commissioners have advised me that statistics are not available which would enable them to cost the current scheme of charitable exemptions. The Revenue Commissioners have informed me that since the foundation of the State they have received close to 12,500 applications for exemption from tax from organisations claiming to be charitable.

Have they studied the Fitzpatrick report?

Of those, about 8,000 organisations have been proved entitled to these exemptions and Revenue estimate that about 4,000 of these are currently active. These numbers could be underestimated because they may not include bodies engaged in charitable work which have not applied for tax exemption. It should also be noted that the Revenue Commissioners receive applications for charitable exemption on a regular basis. While the number varies it is approximately 200 each year.

Experience has shown that the majority of charitably exempt bodies are small local organisations operated on a voluntary basis. The data on bodies granted exemption between 1992 and 1996, inclusive, show that 7 per cent of the applications approved were for religious purposes, 12 per cent for poverty, 24 per cent for educational purposes and 57 per cent for purposes beneficial to the community. It is significant that most of the recently exempt bodies fall into the "beneficial to the community" category.

I mentioned briefly the role of the Revenue Commissioners in relation to exempt bodies. Their role in relation to charities is solely to deal with claims for exemption from tax in accordance with statutory conditions. As part of this procedure they request bodies approved by them as charities for the purposes of tax exemption to submit audited accounts within 18 months of receiving their charitable exemption. In addition, they carry out random checking of bodies to confirm continuing entitlement to exemption. However, they have no function in supervising the activities of such bodies and it would not be desirable or practical for the Revenue to undertake the supervision of charities. The main role of the Revenue Commissioners is the collection of taxes.

As well as the general provision providing for tax exemption for charitable bodies, there are a number of other tax reliefs which could be of benefit to charitable bodies, one of the main ones being section 32 of the Finance Act, 1984. This section provides for tax relief, either from income tax or corporation tax, for gifts to approved bodies, which are essentially third level colleges, university bodies or other approved bodies concerned solely with the advancement in the State of one or more specified approved subjects. Approved subjects include the practice of art and design, music and musical composition, theatre arts, architecture and film arts. A majority of the organisations applying to become approved bodies under this section also have charitable exemption. For the purposes of this section the definition of an approved body is interpreted quite widely and to date about 158 bodies have been granted relief under this section.

When determining an application from a particular organisation to become an approved body under this section, I normally seek the views of the Revenue Commissioners on the legal aspects of the application and the Minister for Arts, Heritage, Gaeltacht and the Islands on its artistic merits. However, the final decision in relation to any application rests with me.

The limited information available on what is donated to charities makes it hard to cost the proposal with any confidence. The Irish Charities Tax Reform Group estimated in its submission that the cost of this relief would be about £3.3 million based on corporate donations of £11 million. These figures were arrived at by determining the level of corporate donations to charities in certain European countries as a percentage of gross domestic product and applying that percentage to Ireland's gross domestic product.

The proposed relief would undoubtedly benefit charities in their endeavours and would certainly regularise corporate donations, some of which are currently given in the form of sponsorship and advertising which may be allowable as a deduction for tax purposes. It should also be noted that the Irish Charities Tax Reform Group estimate of the cost of the relief does not take account of any possible increase in corporate donations, but assumes that certain expenditure will be switched from existing advertising and promotional expenditure.

The material supplied by the Irish Charities Tax Reform Group suggests that the breakdown on the Continent between individual and corporate donors tends to be about 2 to 1. Although accurate information is not available it appears that in Ireland individual donors provide a much bigger proportion of charities' income than they do on the Continent. In Ireland the breakdown between individual and corporate donors is estimated to be about 20 to 1. If the introduction of a tax relief for corporate donations leads to an increase in the amount of corporate donations to charities, the cost of the relief would be higher than suggested by the Irish Charities Tax Reform Group.

The introduction of tax relief on corporate donations to charities would inevitably lead to demands for a similar relief for personal donations at a significantly greater cost to the Exchequer. It was estimated in a study carried out on behalf of the national lottery that personal contributions to domestic charities come to about £200 million in 1995. This figure of nearly £200 million compares with the figure of £130 million in 1991, which suggests donations to charities are increasing significantly. This figure is unlikely to include personal donations to churches or religions which may also be exempt bodies for charitable purposes. That personal donations exceed the level of corporate donations to domestic charities by an estimated twentyfold illustrates how costly a tax relief for personal donations could be.

Voluntary and community bodies, many of which would be charitable bodies, receive considerable resources directly from the Exchequer and the national lottery. It is estimated that the voluntary sector received about £490 million from various Departments in 1995. The voluntary and community groups in receipt of this funding provide a range of essential services. For example, one of the most important schemes being provided by voluntary and community groups is the community employment scheme. Other schemes operated by these groups are community training, community training workshops and community enterprise and co-operative development. As Deputies will be aware, these programmes are making a substantial contribution to community-based local activities. For example, workers on community employment schemes are used to provide staff for projects run by voluntary and community organisations.

The Department of Health and Children, through the health boards, also commits large scale resources to a range of services for the elderly and the disabled. The Department provides funding to a range of voluntary organisations, religious orders and community-based groups. This would include providing services for child care, people with disabilities, the elderly, drug users, rape crisis centres etc.

This is only a sample of what is being done by the Government to assist the voluntary and community sector. I recognise that if these services were not provided by these bodies the demand for the services would fall back on the State. The valuable work being done by voluntary bodies in these areas is recognised by the Government and the country at large. I also appreciate that these bodies could do with additional resources. Unfortunately, as I have stated previously, resources are not unlimited and difficult decisions on where and how resources are to be allocated have to be made.

The Irish Charities Tax Reform Group's proposal will receive careful consideration. However, any decision in that regard is for the Government in the context of the budget. Nonetheless, I will consider the comments and suggestions of Deputies in my deliberations. In return, I ask Deputies to recognise that introducing a tax relief for charities is not a simple matter.

The Minister has told us nothing. Effectively, we will have to wait another three weeks to know if, in his wisdom, he will decide to disburse some of the largesse coming his way courtesy of the outgoing rainbow Government and outstanding Minister for Finance, Deputy Quinn.

Excellently put.

The Minister will have an opportunity to revisit the issue. Neither he nor the civil servants who drafted the speech told us anything. We had an opportunity today to examine the Minister's Estimates and they make extremely interesting reading.

I welcome the opportunity to contribute to the debate. I am sure all Members are familiar with the issue. It was discussed in the House on previous occasions, particularly during the debate on last year's Finance Bill. My view has not changed radically since then. Neither I nor the Labour Party has any difficulty in principle with the measure.

Preparing for this type of debate is somewhat difficult because, after 130 days, it is nearly impossible to keep track of all the promises made by the two Government parties prior to the last general election. Deputy Brady, my colleague from Dublin North-East, and I have had many telephone calls today from workers in TEAM Aer Lingus reminding us that they have a document signed by the Leader of Fianna Fáil pledging support for the letters of comfort given to the majority of the workforce by Deputy Brennan. I hope the commitments given to the workforce will be honoured, but as the weeks pass many of the promises made by the Government prior to its election are being broken. On the Adjournment I must again discuss the issue of Sunday trading because the Fianna Fáil Party has reneged on a commitment by the Minister of State, Deputy Kitt, to retail workers before the general election.

It is difficult to pin down where the Government parties stand on their famous pre-election promises because so many of them have been broken. The latest breach can be seen in the Estimates. Today's announcement by the Minister, Deputy McCreevy, is the most significant U-turn by the Government. For two years prior to the election Fianna Fáil and the Progressive Democrats cried "foul" at the level of public spending by the previous Government. There were rumours for many years that the Minister, Deputy McCreevy, would jump ship and join the Progressive Democrats and it seemed he would fulfil that projection. Egged on by supporters in the media, spokespersons on behalf of Fianna Fáil and the Progressive Democrats accused Deputy Quinn of squandering a unique opportunity in economic history. However, today's figures give the lie to that accusation.

The economy bequeathed to the Minister by the previous Government is so healthy that, despite the front loading of considerable amounts of Government expenditure, the Government will still be able to considerably reduce personal taxation, which most parties support, while balancing the national accounts. There is much to be welcomed in the Estimates, particularly the increases for technological education, health and other areas. However, they are not the Estimates promised by these parties before the election and in the programme for Government. A few weeks before the announcement of the budget, the current spending limit has been breached and will increase to at least 7 per cent. The increase in the capital spending target, the need for which has been recognised for a long time by everybody except those who framed the Fianna Fáil manifesto, has been exceeded by up to 300 per cent. What happened in the intervening period?

It is extremely frustrating for Members such as myself and the Minister who have accountancy or economics training to read the mis-Estimates by the Department of Finance every year. A previous leader of Fianna Fáil from Dublin who dominated the party for a long time was accused of cooking the books in the early 1980s. Every year there are massive overruns in taxation. Why bother preparing a budget if the projections will be wrong? They are wrong because economic projections are consistently reactionary and direly conservative and these are, unfortunately, the hallmarks of the Department of Finance.

I support the motion and commend the Fine Gael Party on proposing it. Many of the bodies in the Irish Charities Tax Reform Group have played a distinguished role in our communities. Many of them are well known and include the Central Remedial Clinic, Concern, the Irish Cancer Society, Irish UNICEF, Rehab, Cerebral Palsy Ireland, the Simon Community, St. Michael's House, the ISPCC and Victim Support. These outstanding organisations will not be amused to hear the Minister refer them to the tiny budgets for voluntary and community affairs under the Department of Social, Community and Family Affairs or to the hope of raising additional funding from the national lottery.

Many of these organisations have suffered significantly as a result of the popularity of the national lottery. No Deputy representing the northside of Dublin can be unaware that St. Michael's House needs a vastly increased budget to help senior citizens who have adult children with learning disabilities. Deputies have had numerous cases brought to their attention of people desperately seeking a place in St. Michael's House for a young man or woman with such disabilities. The Fianna Fáil Party, despite its many periods in Government, has not dealt with this issue. In the health service there is also the scandal of St. Ita's Hospital in Portrane which was highlighted by Mr. Vincent Browne on radio recently. That hospital demands massive resources.

An outstanding case can be made for massive increases in resources for many of the organisations within the Irish Charities Tax Reform Group. There is a projected increase of 9 per cent in the Estimates for the Eastern Health Board budget. That health board has been the Cinderella of the health boards and has often received a lower proportion per capita of the resources available than other health boards. It is clear from the Estimates that many charitable organisations will not get sufficient support from the State. What can they do? Their only option is to fund raise. They were doing that reasonably successfully for a long time but since the establishment of the national lottery they have found it extremely difficult.

I participated in fund raising activities for people with learning disabilities as I am familiar with the problem. Fund raising is difficult. It is difficult to hold a flag day, race night, dance or other fund raising events. We must commend and salute our fellow citizens who are involved in the charitable bodies referred to in the motion on their outstanding work for our community. We should come to their aid. This country is the celtic tiger which has growth rates of between 7 per cent and 10 per cent. The economy is doubling in size every decade or so and we are enjoying the rates of growth which were enjoyed by east Asian states until recently. Why can we not take this small step on behalf of the men and women who have freely donated so much of their time and effort to raise funds for these valiant causes? The figures outlined by Fitzpatrick and Associates are accurate and involve a small tax relief. I ask the Minister to look at this proposal again and think seriously about it. It is a small cost for a wealthy country.

The previous Minister for Finance, Deputy Quinn, liked to envisage this country in 2010 as being one of the wealthiest countries in Europe. He saw it as a country which would be socially cohesive and in which all members of the community would support each other, where there would not be huge gaps in income, where everybody would have a decent home, where there would be an outstanding health service for all and which would continue to have an outstanding education service. Deputy Quinn's dream is valid and we should work towards it. However, it must be an inclusive dream. If this Government wishes to establish us on the path towards that dream for 2012, which will be the centenary of the Labour Party, I implore the Minister to accept the motion and include it in the preparations for the 1998 budget to be announced next month.

One cannot exaggerate the impact of the success of the national lottery on fund raising by smaller charities. That is one of the most cogent arguments in favour of this motion. We have seen the huge popularity of the national lottery in the past ten years. Its card games and bi-weekly draws are immensely popular and there is great excitement on nights of draws for huge prizes. If one is fund raising outside a newsagent's shop or seeking donations in a public house when there is a massive prize fund in the lottery draw, one has little chance of success.

The major party in Government, Fianna Fáil, has had a chequered record in its disbursement of lottery funds. All the major golf clubs throughout the country were festooned with money by Fianna Fáil Ministers. I recall a few years ago a Fianna Fail Minister who proposed national lottery funding for a yacht club in Kilkenny. There were many other similar proposals. Five or six years ago a Fianna Fáil Minister submitted a note for a £40,000 grant on the back of a cigarette box which was later examined by the Committee of Public Accounts. Thankfully applications are no longer submitted on the back of cigarette boxes. There have been extraordinary anomalies in the manner in which funds were disbursed by the national lottery while it has restricted the operation of smaller charities. There has been a double whammy. There have been bitter complaints in the city — I am sure there have been similar complaints in the Minister's city — from areas such as Coolock and Ballyfermot where a huge proportion of people support the national lottery and receive only a pittance in return from the Department of Education and Science or the Department of Social, Community and Family Affairs. That is a major problem.

A recent study revealed that in 1996 our predecessors intended that national lottery funds should be additional spending and not a substitute for Exchequer spending. In the health and education budgets lottery funds became a substitute for Exchequer funds.

In the lead in this week and next week to the budget civil servants will be looking at the concessions offered in the budget. This evening the Minister referred to concessions in the arts area. Most Members would commend a former Taoiseach, Mr. Charles J. Haughey, on his initiative in this regard. Clearly the strides made in the film industry, the music business and so many other art areas, such as writing where we have had a great tradition in two languages, can be attributed to the former Taoiseach, when Minister for Finance. He took a risk but one which has paid off over the years. This was a huge concession to the artistic community. I do not know what it could be costed at now. Frequently in the rock music area and so on artists move in and take advantage of our tax concessions. This evening we are seeking a small concession of £3.3 million from the Government but we are greeted by the stony face of Fianna Fáil Ministers. We can also look to many other areas, including that of corporation tax. For various reasons we believed it should be reduced significantly over the years. There have been arguments about the 12.5 per cent or the 10 per cent rate. Here we have made major concessions for jobs and enterprise. An issue which affects the Minister's constituency is the horse breeding industry. As I understand it, if one is in the breeding business, one is entitled to certain major tax free concessions across one's whole agricultural business if one keeps a few mares and stallions.

Remarkable concessions have been made in different areas in the past but why are we not prepared to salute the smaller charities on their outstanding work for the community? St. Michael's House, on the northside is one example. It needs massive resources and given that it is difficult to fundraise the Government should come to its aid rather than present a stony faced refusal.

Since the Government came into office, my colleagues and I have been looking for the commitments made by the Fianna Fáil and Progressive Democrats parties to the Irish tax reform group. We checked it earlier today on the Fianna Fáil website but conveniently its election website has been deleted. We are not clear what category of promise was made to the Irish Charities Tax Reform Group or whether the expression of support dates back to last year's Finance Bill. However, we came across a commitment from Fianna Fáil to remove the cap on prizes for charity organised lotteries. That is another commitment on which I have heard nothing since Fianna Fáil assumed office.

That will be done.

The Minister's party has been in office 130 days and we are still waiting for action.

Deputy Ruairí Quinn was in office for three years.

Out of a total of 70 years the Minister's party has been in office for 59 years. The problem is Fianna Fáil always lets down the poor.

That is Labour Party hypocrisy. The Department of Finance has been in control for the past three years and nothing was done for the charities.

I have examined the proposals forwarded by the Irish Charities Tax Reform Group to every Member. As outlined by Deputy Noonan they appear to be eminently reasonable. The difficulty, as I understand it, relates to how we regulate charities here. That is probably the difficulty that was experienced in the past couple of years. While Deputy Noonan referred to charities which are accorded charitable status by the Revenue Commissioners, my understanding is the rules under which the Revenue Commissioners operate are governed by a British court case dating back to the 19th century referred to earlier by the Minister.

Recent years have seen a proliferation in the growth of charities. For both charities and the public it is crucial to establish a register of legitimate charities. I have heard people articulate some fears that if we do not tie down sufficiently a usable definition we could find ourselves in a situation where companies effectively give donations to charities acting as fronts for themselves. That was part of the problem we had to deal with. Under the previous Government, an advisory group on charitable funding was established by the Department of Justice whose mandate was to revisit the Costello report on charitable status. It reported about this time last year.

The matter was also examined by the Select Committee on Legislation and Security. I do not know whether it is considered rude to remind the Government of a committee system which operated under the 27th Dáil. I understand also but I am not sure why Deputy Noonan did not mention that the heads of a Bill were circulated. Where is the Bill? There are two ways of looking at it. As Deputy Rabbitte pointed out on "Morning Ireland" earlier this week, the Government appears to be allergic to legislation. While I appreciate the significance of the EU's drug monitoring service, the truth is it has been allowed a two-day debate simply because the Government has no legislation to bring before the House. However, on the other side of the coin, the only legislation the Government appears to be interested in bringing forward is legislation developed by the previous Government.

The onus is on the Government to bring forward appropriate legislation as soon as possible. The matter has been kicked around in Government for too long, it requires decisive action. During the course of this debate Deputies Noonan and Deenihan paid tribute to the work done by the charities. Those of us who represent constituencies of unemployment blackspots and rampant poverty know only too well that without the effort of these groups and individuals many people would be considerably worse off. I agree with Deputy Noonan who said charities will always be with us and that the work done by many of them is crucial. However, I believe it to be a legitimate aim of the Labour Party to aspire to a situation where charities may no longer be necessary. The onus is on the Government to bring forward comprehensive legislation on charities to modernise the present confused position.

Debate adjourned.
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