Dáil Éireann debate -
Tuesday, 23 Jun 1998

Vol. 492 No. 7

Written Answers. - Government Programme.

Ruairí Quinn

Question:

185 Mr. Quinn asked the Minister for Finance the specific commitments, if any, set out in An Action Programme for the Millennium which have been implemented in full; the commitments, if any, implemented in part; the commitments, if any, initiated; the commitments, if any, yet to be initiated and implemented by his Department; and if he will make a statement on the matter. [15047/98]

Minister for Finance (Mr. McCreevy)

The key priorities identified by the Government in An Action Programme for the Millennium and the extent to which they have been implemented are set out as follows:

Commitment	Extent of Implementation
• Reduce basic rate of income tax to 20 per cent over five years.	The basic rate has been reduced to 24 per cent in the 1998 budget.
• Reduce higher rate of income tax to 42 per cent over five years.	The higher rate has been reduced to 46 per cent in the 1998 budget.
• Increase basic allowances by at least rate of inflation at each budget.	Allowances increased by 8.6 per cent in the 1998 budget.
• Broaden standard rate tax band over five years to include 80 per cent of taxpayers.	While progress on this commitment was not possible in the 1998 budget, £517 million was allocated to personal income tax/PRSI reductions. The measures taken by the Government in the 1998 budget ensure that the Partnership 2000 commitment to personal tax reductions of £900 million on a full year basis over three years has been delivered in the first two years of a three year programme.
• Reduce PRSI and levies.	PRSI-free allowances and income threshold for levies increased in the 1998 budget.
• Honour joint taxation statement of two Government parties made during election campaign.	Six of eight priorities have been implemented or have begun to be implemented in the 1998 budget.
• Provide an agreed plan for the investment of private, public and Euro funds from 1999.	The process of preparing the national plan for the next round of Structural Funds has been initiated.
• Run a current budget surplus.	This objective is already being met. The size of the surplus is projected to increase over the years 1998-2000.
• Eliminate Exchequer borrowing over the next two to three years to reduce service cost on national debt.	The 1998 budget target for the Exchequer borrowing requirement is £89 million with an Exchequer surplus projected for the year 2000. The latest indications are that Exchequer borrowing will be eliminated in 1998.
• Limit net current spending to 4 per cent and capital spending growth to 5 per cent. Reduce Government spending as a share of national output.	Current spending is estimated to increase by 2.8 per cent in 1998 and is projected to increase by an annual average of just under 4 per cent in the period 1998-2000 on a “no-policy-change” basis. Capital spending is estimated to increase by 21.2 per cent in 1998 and is expected to remain broadly constant in the period 1998-2000 on a “no-policy-change” basis.
• Fulfil the terms and commitments of Partnership 2000 in the context of sustaining economic growth.	Debt/GDP ratio was just over 66 per cent at end 1997 and is forecast to be 60 per cent at end 1998.
• Fulfil the terms and commitments of Partnership 2000 in relation to pay.	The agreement is in place in the public service except in the case of the Garda Síochá na and the Defence Forces.
• Support for full observance of the Maastricht criteria across Europe.	The Maastricht criteria were directly related to EMU membership for which Ireland qualified. We will continue to observe the criteria within EMU as well as our obligations under the Stability and Growth Pact.
• Take account of the effects of EMU in next social partnership agreement.	In the negotiations leading up to the next social partnership agreement full account will be taken of the possible effects of EMU. The current Partnership 2000 agreement already provides a mechanism for reviewing the agreement on pay and conditions in the event of unforeseen changes in the economic circumstances arising from EMU. This should help alleviate any post-EMU threats to employment.
• Consult with social partners in the event of post-EMU threats to employment.
• Negotiate continuation of Structural Funds.	Detailed examination of draft regulations has commenced. Negotiations on proposals therein are likely to continue throughout this year and possibly into 1999.
• Fulfil commitments of Partnership 2000.	Implementation is monitored by a committee representative of Government Departments and the social partners.
• Develop a strategy to deal with contraction of EU funds after 1999.	Regional authorities, social partners and heads of Departments have been asked for their priorities.
• Secure a standard 10 per cent rate of corporation tax by 2010.	Revised target of 12.5 per cent announced in 1998 budget. Discussions with EU Commission on agreed timetable for phasing in new regime are at an advanced stage.
• Utilise tax system to encourage entrepreneurship.	Tax on first £50,000 of profits and capital gains tax were reduced in the 1998 budget.
• Ensure stamp duty exemption for young farmers taking over family farms.	This issue is to be examined for future budgets.
• Seek to upgrade fishing fleet and make the marine industry attractive to providers of capital by examining the provisions of tax breaks and subsidised loans.	Significant tax incentives for the whitefish fleet are contained in the Finance Act, 1998.
• Use of the tax system to encourage investment in tourism.	There has been a refocusing of capital allowances for hotels to encourage investment in three star hotels in seven western counties. The resort area renewal scheme has been extended to June 1999. A study of this scheme is currently being undertaken by the Departments of Tourism, Sport and Recreation and Finance and the Office of the Revenue Commissioners.
• Refocus tax and welfare system in favour of the family unit.	Changes to the family income supplement in the 1998 budget will result in large increases in weekly payments.
• Introduction of tax allowance for carers of children, the elderly and disabled in the home.	The question of introducing tax allowances in respect of “care in the community” will be examined in the context of the 1999 budget.
• Increase tax allowance for the elderly.	Exemption limits for the elderly were increased in the 1998 budget.
• Introduce a tax allowance for carers of the aged.	Currently being considered in the context of the 1999 budget.
• Protection of public service pensions.	Civil Service pensioner cases are being examined in conjunction with Departments to determine whether additional payments should be made.
• Remove performance restrictions for public servants.	Proposals for the introduction of a new performance management process will be submitted to Government shortly.
• Provide credible policing methods for ethical issues in public life.	Draft heads of a Bill have been prepared and a memorandum for the Government has been submitted.
• Expand remit of the Ombudsman.	It is intended to publish a Bill in late 1998/early 1999.
• Review the effectiveness of the national lottery.	Recommendations of the review group on the national lottery are being examined. Implementation of recommendations is scheduled for completion in mid-1999.
• Resist EU plans to abolish duty-free shopping after June 1999.	Raised at ECOFIN meeting on 19 May 1998. I did not receive the necessary support from colleagues to request the Commission to carry out a Community-wide study. While there have been no further developments, it will remain on my agenda.
• Ombudsman's Office to monitor State services provided through Irish.	A provision has been included in the Bill providing for the expansion of the Ombudsman's remit which it is intended to publish in late 1998/early 1999.
• Special tax incentives for cultural developments.	This issue is to be examined for future budgets.
• Introduce a £2,000 per annum STD related allowance worth £40 per week for married people who stay at home to care for children and also to contribute to the cost of child-care and caring for the aged and the handicapped.	To be considered for the 1999 budget.
• Provide special relief for old age pensioners by raising exemption limits.	There were significant increases in the examptions limits provided for in the 1998 budget.
• Introduction of a special tax allowance for the long-term unemployed.	This was announced in the 1998 budget and provided for in the Finance Act, 1998.