Skip to main content
Normal View

Dáil Éireann debate -
Wednesday, 23 Feb 2000

Vol. 515 No. 1

Finance Bill, 2000: Second Stage (Resumed).

The following motion was moved by the Minister for Finance, Deputy McCreevy, on 23 February 2000: "That the Bill be now read a Second Time."
Debate resumed on amendment No. 1:
To delete all words after "That" and substitute the following:
"in view of:
–the absence of a clear economic policy underpinning the Finance Bill,
–the continual changing of expenditure targets by the Government,
–the threat to competitiveness caused by inflation,
–the inadequacy of income tax relief for the lower paid,
–the contradictions in labour force policy in the tax proposals which apply to spouses,
–the absence of fair and practicable proposals on child care, and
–the refusal by the Minister for Finance to introduce a fair and equitable tax regime for credit unions,
–Dáil Éireann declines to give a second reading to the Bill.".
–(Deputy Noonan).

I wish to share my time with Deputy Batt O'Keeffe.

Is that agreed? Agreed.

I welcome the opportunity to speak on the Bill which gives effect to the Government's commitments outlined in the budget and is completely in line with the programme for Government. This is the most generous budget ever and, as such, it is hard to listen to some of the criticism from the opposite side of the House. It is very difficult not to welcome a budget which gives £1 billion in personal taxation deductions, removes 70,000 from the tax net and takes 125,000 taxpayers off the top rate of tax, cuts the standard and high rates of tax by 2%, reforms and simplifies capital acquisitions tax which is long overdue, accelerates capital allowances for expenditure on child care premises, puts into effect a new town renewal scheme which will be of huge benefit to many rural communities, particularly in County Mayo, and gives continued relief from stamp duty on transfers of assets to young trained farmers for a further three years which has been widely welcomed within the farming community.

It will not pay the rent.

The Bill is very comprehensive and, as such, it is not possible to speak in detail on all sections. I will therefore focus on a number of issues. On personal taxation, I welcome in particular the cut of 2% in the standard rate of tax to 22% and in the high rate to 44%. I also welcome the widening of the tax bands for a single person from £14,000 to £17,000 and for two income couples to £34,000. These are the most generous reductions and changes in the tax bands that we have seen for many years and are completely in line with the commitments given in the programme for Government. I further welcome the increases in personal allowances at the standard rate of £500 for a single person and £1,000 for a married couple. A single person can now earn an income of £110 and not pay any tax.

Everybody is a winner as a result of the budget. The Minister has been very caring in his attitude and also helped the aged, the blind, widows, dependent relatives and incapacitated children who will have their standard rated personal allowances doubled. These are very welcome changes and I compliment the Minister on benefiting all sections of the community.

I welcome the changes in relation to capital gains tax. Last year there was huge criticism from the opposite side of the House when the Minister reduced the rate of capital gains tax to 20%. Many argued at the time that it would result in a smaller tax take in this area but they have been proved incorrect. The Minister was correct in what he stated in last year's budget.

Good. He was correct about something.

I am delighted the Deputy recognises just how effective the Minister for Finance has been. I am sure that will mean a great deal to the Minister.

The Minister has gone further this year and extended that 20% rate for people who wish to sell land for residential purposes. This is an important move because it will go a long way toward increasing the supply of land for housing. This is something to which the Government has been particularly committed. There will be 22,000 new house starts over the next four years and that will go a long way towards addressing the serious demand for housing. One hears hollow comments from the Opposition benches. When it comes to heckling they are excellent, but when it comes to putting forward real solutions to problems sadly their suggestions fall far short of the mark.

The Minister has been unfairly criticised over the past number of weeks on his tax strategy. He has tried to introduce a simple system of taxation where the person who is out earning will attract the allowances and also must pay the tax on what is earned as an individual. This is a simple approach. It is streamlined and non-bureaucratic. It would be a welcome development in any tax system. The Minister has been unfairly treated in many sections of the media and by Members of the Opposition on this particular measure.

What about the Members who went out on the plinth? Has the Deputy forgotten about that?

With the passage of time as reflected in opinion polls which were in the newspaper only this week, the general public is begin ning to realise that the changes being implemented by the Minister are significant and he was correct in what he has tried to do.

I welcome the changes in mortgage interest relief. Again this provides for a much simpler system than that which existed in the past. I am delighted that many of the complications with which the Revenue has had to deal over the years, not only those related to mortgage relief but those related to VHI relief also, have been taken away from it, and that those will be deducted at source. I welcome this move as it streamlines the entire tax system.

I wish to highlight section 12, the £3,000 carer's allowance for spouses caring for children, the incapacitated and the aged. I welcome this allowance. It is a true recognition by the Minister of those people in society who are looking after children, the incapacitated and the aged. It will provide a great deal of help to people who must stay at home and look after people in those particular categories. I compliment the Minister for introducing that measure.

That is the Healy-Rae element.

Section 52 deals with the area of accelerated capital allowances for expenditure on the construction, refurbishment or extension of child care premises. I welcome this genuine attempt by the Minister for Finance to increase the number of child care places. This matter has been on the political agenda. It has been a high priority for Fianna Fáil and it was included in the programme for Government. I am delighted the Minister introduced this measure in the Bill. It will go a long way towards increasing the supply and, hopefully, reducing the cost to parents who must put their children in crèches and child care facilities.

I am delighted that the new town renewal scheme in section 72 has been warmly welcomed by all sides of the House. Many sections have been criticised, but at least there seems to be uniformity on this particular measure. It provides for relief for the renewal and the improvement of certain towns throughout the State the populations of which are between 500 and 6,000. This is a welcome development, particularly for someone like me living in a rural community. There would be many towns in County Mayo which would fall within this category. The selection process to decide on the towns concerned has already been undertaken by all the counties, and the recommendations of the various local authorities are being considered by the Minister for the Environment and Local Government.

I welcome the fact that the scheme will operate for a three year period, between 1 April 2000 and 31 March 2003. I hope it will provide genuine assistance to all of those towns in restoring and improving their fabric, but it will also promote sensitive local development and revitalise the centre of small towns. For one reason or another over the years the centres of many small towns have fallen into dereliction. Many people have tended to move out of town centres into rural areas. I welcome this scheme as a real opportunity to regenerate some of those urban centres, particularly in my county where there were 11 towns applying for five places in this particular scheme. It would have been wonderful if all 11 towns could have qualified. As it happens, there are towns like Knock, Crossmolina, Ballyhaunis, Charlestown, Killala, Swinford and Kiltimagh in County Mayo which satisfy all the criteria for inclusion, and it is pity the Minister could not have allowed an unlimited number of towns to qualify for these benefits. All those towns equally deserve an opportunity of regenerating themselves and giving a real opportunity to the people living there. However, I welcome the development. I hope that at the end of the three year period the Minister will consider – I know this is already in his plan – the extension of the plan in order that a new set of towns may be included next time around.

One of the most important sections relates to capital acquisitions tax. Deputy Ulick Burke will probably not want to remember that it was former Minister Richie Ryan of his party who introduced the tax, stating that inheritance tax was to be a tax on the rich. As all Deputies will be aware, however, what started off as a supposed tax on the rich ended up being a tax on virtually everybody, irrespective of income. It affected many people on relatively small incomes who had been living in family homes and were forced into selling the family home to pay inheritance tax.

The Minister heralded for a long time that he would make major changes in this area. Therefore, it was of no surprise to us on this side of the House that the Opposition spokesperson decided to jump the gun in a bid to get a little publicity on this measure and tried to come out with a few recommendations prior to the announcement of the budget.

The Minister adopted them all.

However, full credit is due to the Minister, Deputy McCreevy, for taking the issue of CAT by the scruff of the neck once and for all and doing something about it. The changes being introduced by the Minister will reduce the severe impact of inheritance tax on family inheritances in particular. It will make business and agricultural relief more available and move the basis of gift and inheritance tax from domicile to residence. That is an important move. One used say that one's domicile was wherever one's burial plot was. It is more significant to base the tax on where the person is resident, particularly if the person is resident in a state for a period of five consecutive tax years. I welcome that change in the area of CAT.

Section 24 provides for an increase in inheritance tax thresholds and the introduction of the uniform 20% rate of tax for both gifts and inherit ances. Again this is a streamlining of the tax system. It is something which the Minister has tried to introduce not just to the area of inheritance tax but, as I said earlier, to the area of personal taxation. In many other countries a streamlining and simplification of the tax system which is not bureaucratic, such as that which the Minister is trying to introduce, has been a great success. Over the years for some extraordinary reasons Ireland has managed to cobble together the most extraordinary tax system and it must be broken down and simplified. What the Minister has done this year is a huge step in that direction. In five years, or probably sooner, people on the Opposition benches and the public will be welcoming his radical move to do something at this time. As the House will be aware, it is a brave Minister who makes radical change. It seems to be always left to this side of the House to make those moves. I compliment the Minister for having the good sense to be able to take that on at this time. I also welcome the fact that on probate tax the threshold for exemption tax is now £40,000. That threshold was far too low at its previous level.

Section 130 provides for the new relief of inheritance tax on the family home, as promised. That is a very important development. I know it is welcomed by all sides of the House as we have all had representations from many of our constituents. I do not think anybody intended that a brother, sister or a daughter living in a family home would have to sell the family home to pay inheritance tax. That was not the intention and I am glad it has been sorted out once and for all by this Bill.

There is an exemption in the Bill if one uses low surplus fuel. I welcome the tax relief for films for five years because it has been shown in the past that this has promoted further investment in the film industry. I also welcome the relief for post-graduate fees under section 21.

May I share my time with Deputy Kirk?

Is that agreed? Agreed.

There are many excellent provisions in this Finance Bill. It is a continuation of the good work already done by this Government and Minister and by previous ones. I welcome the continuing reduction in taxation. According to a recent international survey by Forbes, we now have one of the lowest taxation regimes in the world. Unfortunately, this is a message we are failing to communicate. The view still persists that we are a heavily taxed country which is, in many instances, deterring our people from returning home. I exhort the Minister to initiate an information campaign to dispel this erroneous view.

The people are fair-minded and they appreciate the success we are now enjoying. Obviously, the opinion polls clearly indicate that they rightly associate this success with the Fianna Fáil party. I refer to the NESC five year report. It states that 1987 is recognised as a break point in contemporary features of social partnership and social cohesion in Ireland. It goes on to state that it is identified as a break point in terms of key economic and socio-economic outcomes. I need not remind the House what party was responsible for bringing about that change. We are continuing that progress with the new agreement which will be ratified by a majority of the social partners and the unions, in particular.

The most significant provisions of the Bill, into which I will not go in any great detail, are the personal taxation measures which will mean that an average single person on an industrial wage will see their take home pay rise by £20 per week. For a married couple, this will mean an increase of £40 per week. This total package, the largest in the history of the State, £940 million, means that everyone is a winner. While I had my difficulties with the budget when it was first announced, the amendments made by the Minister have gone a long way to satisfy people. I have particular difficulties with individualisation of which the Minister will be well aware. I agree that couples, where both partners go out to work, have not been reaping the rewards of that work. With this budget, they will benefit greatly and deservedly so.

In regard to the personal allowances, the widening of the bands and the increases in allowances mean that almost 50,000 people have been taken out of the tax net altogether. Coupled with the fact that 125,000 people have been removed from the higher rate of tax, it is very significant. These measures will benefit and reward the labour force which has helped to create the booming economy we all enjoy.

The working sector has benefited. Although we had concerns when the budget was announced, now that we have seen the total package in the agreement reached, which I hope will be agreed shortly, the benefits for the lower paid are significant. Over the term of the agreement, there will be significant increases of 15% to 20% in the take home pay of individuals. That is worthwhile and means people in that bracket will have more spending power.

The Bill will also benefit the sectors of society which deserve and need our help – the aged, the blind, widows, dependent relatives and incapacitated children. This group will have their standard personal allowances doubled. The total social welfare improvements will be increased to almost £400 million, the largest package in the history of the State. Total spending by the Department of Social, Community and Family Affairs will be almost £5.4 billion, 20% above the 1997 level. Pensioners will receive an increase of £7 per week. When the increase in the qualified adult payment is taken into account, a contributory old age pensioner couple, both aged 66 or over, will receive £160 per week.

In addition, families with children will also see benefits. This Government obviously appreciates that child benefit is an important financial support for families with dependent children and a key instrument in combating child poverty. The child benefit rate for the first and second child will be increased by £8 per month and by £10 per month for the third and subsequent children. These increases will raise monthly payments to £197 for four children families. In addition, a £20 increase in the back to school clothing and footwear allowance is also being granted. Families deserve to reap the benefits of this economic prosperity. The Minister has ensured that the means to achieve that are included in the Bill.

The Bill also provides for reductions in business and other taxes. A single rate of 12.5% on trading income is to be the achievement of a schedule of corporation tax reductions. The standard rate of corporation tax at 24% on trading income is provided for in the Bill and this will have significant success in that sector.

The Bill provides an opportunity to help the people through tax cuts and programmes which assist all sectors of society. It is obviously a very welcome Bill and now that Deputy Belton has gone I can say I understand how galling it must be to be in Opposition at a time—

I am here to replace him.

—of great largesse. The other side of the House will not be begrudging because they know that when the tough decisions had to be taken in 1987, they were taken. The enlightened approach by the Fianna Fáil Government is now paying dividends . I am sure they will share with Fianna Fáil in the success we are now reaping.

Deputy Cooper-Flynn dealt with capital acquisitions tax but there are two areas which are worthy of mention. One is donations to universities. Under section 485 of the Taxes Consolidation Act, if somebody gives at least £1,000 to certain third level institutions for particular projects, it can be written off against tax.One of the difficulties encountered, particularly in third level education, has been the amount of money put into research and development and various courses that are an adjunct to the industry we are trying to create. Since this measure was introduced in the budget, there has been major interaction between businesses and the third level sector. That can only help third level institutions and the ongoing research and development that is so important for this economy.

This Bill is expansive, its measures are far-seeing and it will ensure the continued growth of the economy, which will benefit workers and the less well off in our society.

While I have only a few minutes to contribute to the debate, I thank my colleagues for affording me the opportunity to do so. Having regard to the debate on this Bill and the ongoing debate on Budget 2000, those of us who have been Members of the House for a few years could indulge in political nostalgia by thinking back to the 1980s when the economy was not in the shape it is in today. In the mid-1980s the question of whether we could avoid bankruptcy was on the lips of concerned economists.

A programme of austerity was put in place by the then Government in 1987 and during the succeeding years many of those working in the areas where financial curtailment had to be effected experienced a certain degree of pain. Those who research the economic and political history of the period will be able to monitor the progress made since then and I am sure they will conclude that the decisions taken at that time paid rich dividends in the late 1990s and into the new millennium.

The Minister for Finance has been able to introduce significant reductions in personal taxation levels during recent years, and I hope further reductions will be introduced in future years, principally because of the significant increase in the number of people in direct employment. The programme of industrial development has been a major success. Enterprise Ireland can be justly proud of what has happened. Such success does not happen by accident. Unless the political and economic climate is favourable, investment will not materialise. When there is a lack of investment and industrial expansion, jobs do not come onstream. Jobs were created in the manufacturing sector and Exchequer investment in our educational infrastructure is paying rich dividends, but the most significant feature, which is always a barometer of the well being of an economy, has been the phenomenal growth in the number of jobs in the services sector. That is not all directly related to what is happening in the building sector. An announcement was made earlier this week that the Xerox Corporation will create more than 100 jobs in Dundalk in the injecting moulding business. That corporation is locating in Dundalk to supply its industry with its needs in that sector of the business.

If one indulges in political history, one needs more than five minutes to contribute. Significant changes to inheritance tax and capital acquisitions tax have been introduced in the budget. The escalation in the valuation of family homes created financial hardship for family members in the amount of tax they were required to pay on inheriting the family home, but the changes in this area and the other adjustments to the capital acquisitions tax introduced by the Minister for Finance are welcome and they will be appreciated.

It is estimated that the health budget for 2000 will be approximately £4.2 billion, which represents an increase of one-third over the budgets for the past two years. That is a significant increase in an area, which by its nature involves major capital and current expenditure. I am sure that increase will be reflected in an improved health service.

While many Government speakers said this budget was the first of many give-away budgets by the Government, I remind them that this budget was the first real opportunity a Minister for Finance has had, probably in the history of this State, to bring about real change for many people, but the Minister failed to utilise that opportunity. He failed to effect real change in the taxation structure for the people who needed it most, the low paid. When Deputy Batt O'Keeffe referred to this matter, he said the less well off would benefit most from it. The record speaks for itself in that they are the people who have least to gain by the provisions of the budget. That golden opportunity was lost by the Minister.

I would like to mention other matters and other lost opportunities. In the previous budget the Minister introduced a welcome provision for the upper Shannon region, where he designated those areas that had found it difficult for economic reasons to attract new investment to be part of a pilot scheme. I had hoped he would extend that scheme to the middle Shannon region, south from Athlone down to Portumna and towards Woodford, but that did not happen. Even at this late stage, I hope he will reconsider extending the scheme to that area as it is one that falls between not two stools but many stools. Further south along the River Shannon basin and to the east of it runs the Shannon free zone and it continues up through Tipperary as far as Birr and being part of that is of major benefit to that area.

On the western side of the Shannon, Enterprise Ireland and other agencies are based but Ireland's IDA west base in Galway has forgotten about the eastern part of the county. On last night's Adjournment Debate it was stated that Ireland's IDA had not created one manufacturing assisted job in the town of Ballinasloe in 27 years, a town which suffered the loss of 180 jobs last week. That does not apply only to Ballinasloe, most county towns in the eastern part of Country Galway have been given the same treatment. There has not been any recognition from IDA Ireland in bringing investment into the area and creating employment. That is why I ask the Minister for Finance to reconsider, as a matter of urgency, the inclusion of the middle Shannon area from Athlone southwards through Eyrecourt, Portumna and as far as Woodford on the western side of the Shannon. It would be an opportunity to bring inward development to this area that has otherwise failed to be regenerated.

We were lucky that five towns in County Galway were designated under the new urban renewal scheme. It is a good scheme and it has been recognised as such. However, for the small towns in question in this instance, it has too many parallels with previous urban renewal schemes that benefited larger towns with extensive urban areas in decay or which had suffered decline for economic reasons or because people had moved out. Small towns such as Loughrea and Portumna might have individual premises that have gone into ruin but do not have extensive areas that are in decay. That means there are only piecemeal opportunities for renewal. The intention was that if one were to drive through one of the towns that benefited from this new urban renewal, one would see the impact of the provisions of this scheme. Unfortunately I cannot see how we will recognise small isolated improvements that might occur. I hope this scheme will be extended in the next year to include a more extensive response in urban areas.

I welcome the provision relating to post-graduate fees. However, I find it very difficult to reconcile that provision with what is happening at present in Galway where more than 100 undergraduate nurses are being victimised because they are unjustly and unfairly denied their fees. The sooner the Minister for Education and Science or the Minister for Health and Children takes responsibility and grants justice the better. This injustice should be recognised. These undergraduate nurses should be given their entitlements. They should be treated the same as all other undergraduates and their fees paid.

I welcome this opportunity to say a few words on the Finance Bill. It will be the most important legislation to be enacted this year as it details how much money will be spent in all Departments over the next 12 months.

There are parts of the Finance Bill which I welcome. The provisions relating to inheritance tax are worthy, and the Minister has dealt with an issue that has been a festering sore for many families in rural and urban Ireland for a long time. It was very worthwhile to reduce capital acquisitions tax to 20% on most lands. However, the Minister missed an opportunity which the Minister for the Environment and Local Government might have a chance to revisit when dealing with the planning Bill. I refer to the massive housing crisis we are currently experiencing, particularly in relation to social housing. One way the Minister for Finance could have dealt with this issue was to propose a motion allowing capital acquisitions tax at 0% on any land sold to local authorities for housing. Such a move would give landowners an incentive to sell lands to local authorities. It would also give local authorities an opportunity to buy land at more competitive prices. Most individuals wait for a private developer to come along because they feel that private developers have more money to spend than local authorities for serviced land or land for housing. On Committee Stage, the Minister should look at possibilities which would help to provide much-needed land for building local authority and social housing.

The Minister for Finance, Deputy McCreevy, always spoke of the type of economics in which I believed when he was in Opposition. I believe in social justice, but we have to be very careful about how we spend our money.

We should have a new coalition.

No. I respect individuals who stand for something. One cannot stand for everything and believe in nothing.

The Minister misread the situation. He made a mistake in regard to low pay and in regard to stay-at-home housewives. Individualisation was probably a good idea, if properly thought out. I find it very difficult to believe the Minister for Finance, the Taoiseach and the Tánaiste agreed on this and a week later, when the Minister for Finance read the budget in the Dáil, the Taoiseach organised 20 or 30 backbenchers to go out on the plinth and state that it was not the type of budget he believed in. That is cynicism and one of the reasons we in politics suffer.

The Deputy is being cynical too.

I am not being cynical. I have been around long enough not to be.

My point is that the Minister espoused economic restraint. Then he found he had a problem and the Government threw money at it to try to fix it. More than £1 billion has been given away in tax cuts this year. However, I guarantee that less money will be given away next year because of mismanagement of the economy. We now have the highest inflation in Europe. We are expanding the economy when we should be cutting back. We cannot control our interest rates because we do not have a Central Bank and interest rates are controlled in Europe. If we did have a Central Bank, interest rates would have been increased. The only thing we can control is the amount we give out in tax cuts. The Minister has given out more money for tax cuts because he did not think through the individualisation measure. Now we are experiencing the largest inflation rate within the EU and that will work against us. Last weekend the Minister stated that this would be only a temporary little arrangement, but anybody who looks into the economy would say that inflation is going to increase rather than decrease in the short-term and that will cause difficulties for our economy. The Minister made a mistake. What he did was ill-judged and not well thought out. Throwing money at a problem will not solve it. We all remember the 1980s when many people emigrated from this country and out of every pound taken in tax 99p went to pay the interest on what we owed. It is particularly important even in good times to make sure to pay off our national debt and reduce it to realistic proportions. Anybody who has studied economic history as I have had the privilege of doing on a number of occasions, knows that whenever there is a boom in the economy it is always followed by a downturn. I hope the downturn in the economy will not be as extreme as that experienced in Europe and elsewhere. I do not think it will be.

There was an opportunity for the Department of Health and Children to deal with some issues. Back in the 1980s when things were very difficult we called for an embargo in the Civil Service. In Government, Fianna Fáil introduced such an embargo, as did Fine Gael. At the time, that was probably the right way to go. Currently, the private sector is employing as many if not more than the public sector – something that has not happened before in the history of the State. Ten years ago for every ten people employed, seven worked in the Civil Service. That ratio has now changed to at least 5:5 or perhaps 6:4 in favour of the private sector. The Government should examine the possibility of reducing the number of people employed in the public service which accounts for one third of total Exchequer funding. We cannot allow that to continue. There is an opportunity to do something radical and worthwhile if the Government had the guts to do it. However, neither the budget nor the Finance Bill show that it has.

We certainly have a tiger economy and there is no doubt but that it is doing well. However, listening to the Taoiseach and his Ministers in the Fianna Fáil led Administration one would imagine that the tiger was a cub when they came into power. In fact, it was a fully fledged animal and the economy was up and running when Deputy John Bruton led a Government that did marvellous work. The rainbow coalition laid the foundation for this economic boom and the Government has been left in charge of managing it but it is doing a very bad job. There never was as much turmoil in the country. Gardaí were out with the blue 'flu and the nurses, God help them, had to go out on strike also, which was unheard of in this country. The doctors were out on strike, the farmers had to mount a picket to get their rights at the meat factories and there is general annoyance within the unions at present because the low paid are not being looked after.

When the present budget was announced by the Minister for Finance, he said in an interview that it would be the mother of all budgets. A dictator in the Middle East used to talk about the mother of all battles but this budget turned out to be a damp squib. The Minister has not looked after the elderly people who built the country for us. Those over 65 came through hard times that we did not see. They laid the real foundations while their families had to emigrate to England and America because there was nothing for them. As a young lad I witnessed céilís in the local hall where presentations of a wallet of notes were made to help unfortunate people to get to America or to England. That time has passed, however, and while it is no reflection on those who left, the people who stayed here are not being looked after. Their small savings are in the credit unions but the Minister would not meet the credit unions who are doing voluntary work. The Minister, Deputy McCreevy, is well paid for doing his job and he owes it to those who do voluntary work and encourage people to make savings, to meet with them but he would not do it. He will tax every penny of their savings. They are poor people who gathered money so that at the end of their days they would have some little comfort to fall back on. It is unacceptable and people do not like it.

The Minister meets the banks, however, because they are the big players. They are the people he likes to meet, going down to Jurys where they were hiding in corners handing out brown envelopes stuffed with £50,000. That was some envelope. The ordinary people are not being looked after and it is both wrong and sad.

I heard one Deputy praising the private sector and the health boards for building nursing homes for the elderly, but do they ever talk to elderly people? How would the Minister, Deputy McCreevy, like to end his days? The Minister of State, Deputy Ó Cuív is, however, one of the Ministers I admire. He stands up for what is right in the House and in the country, and I appreciate that. It is not going unnoticed. He probably has a good future in his party and he deserves it.

What do any of us want in old age? We want our own home where we are lord and master with some little provisions and comfort, but that will not happen. The Government is getting the private sector to build nursing homes. The elderly will be placed there in groups and sedated because they are easier to manage, but it is wrong to do that. Let us be fair to the old people.

Their families are doing that, not the Government.

I will not interrupt the Deputy. Nursing homes are springing up like mushrooms all over the country because making money out of old people is a business. Nursing homes have a role to play as respite centres so that families can get a break, but most old people can be cared for in their own homes where they are close to their friends and neighbours. There is goodwill in rural areas but it is not being supported by the State.

We all know how the banks carried on and we all know what went on in this House with a former Taoiseach and Ministers. I admire the Minister of State, Deputy Ó Cuív, for standing up and condemning that activity as 99% of people do. I have been 13 years in the House as an honest, decent and hard-working Deputy, yet we are all being tarred with the one brush. It is wrong to do that.

I think we are wandering away from the matter of the Finance Bill.

Not a bit. This all concerns the Finance Bill and making provision for people. We cannot make provision for them, however, if there are rip-offs and if taxes are not being collected. The Finance Bill has everything to do with collecting taxes that are due from everybody, not just the hard-pressed PAYE sector, and giving relief to other sections that need it. It is important to say that and to put down a marker about it.

I know the Leas-Cheann Comhairle will be interested in the Border region and will say that I am back on track when I mention it. The region is undeveloped and has suffered over the last 30 years, yet some Ministers do not recognise that. The region needs catch-up money and I make no apologies for saying so. We are trying to develop a tourism industry and I hope people North and South will interact. We must encourage that.

Bed and breakfast services would be a marvellous way of sustaining small farms but the Government is going to put a levy on bed and breakfast operations. That is a small growing sector that at best is only seasonal. People should be encouraged to do such things for themselves. Where are we going and what is the Government's thinking on this matter? I am totally opposed to that proposal and I will oppose it when we debate the Valuation Bill.

As regards industrial development, not one job has been created in County Cavan in the past 15 years. An IDA Ireland factory has been lying idle for the past two years awaiting a tenant. All sorts of promises in this case were made by the Tánaiste who is a partner in the Government, and she cannot escape blame. I have a pile of letters containing flowery replies, but nothing definite and nothing has happened.

I regret that my time is running out because there was so much more that I wanted to say. The agricultural economy is depressed and the Minister for Agriculture, Food and Rural Development should understand that. The Minster of State, Deputy Ó Cuív, comes from a rural constituency but does the Minister, Deputy Walsh, understand the needs of small farmers? The farm supplement is not getting down to those who need it. We are talking about a small amount of money to give people some dignity and respect in their locality so they will not have to go hand in mouth to the social welfare officer seeking what they are entitled to. There is much more that I would like to say but there will be other opportunities to say it.

Maidir leis an Chomhaontas Glas nó an Green Party, cuireann an cáinaisnéis an-díomá orainn. Is beag athrú a rinne an Bille Airgeadais ar sin, faraoir. The disappointment the Green Party feels arises from the growing gap between the richest and the poorest. It also relates to the fact that Exchequer returns, which have risen by 120% over the last five years, are not matched by the wages bill which has gone up by only 49% per cent in the same period. There is a growing gap in that regard as well as between high and low earners. The Combat Poverty Agency still points a critical finger at this Admin istration and previous ones, saying that between a third and a quarter of Irish children are at risk from poverty. The Green Party's analysis of the budget is best found by looking more closely at the word "economics", the Latin origin of which means to manage; to manage one's house or in this case the State. The word "eco" is common to "economics" and "ecology" and the Green Party was known as the ecology party when it was founded. The word "ecology" is based on the understanding of the house, State or what one is managing. Without an understanding of the form of ecology, the economics tend to be wide of the real issues when it comes to the long-term welfare of the country and the wider world.

The word "ecology", if we take it as being part of the wider world of economics, assumes that we will always be respectful not just of each other as humans but of all creation, as that is part of the ecology on which we all depend. It assumes also that we would take for granted that all fossil fuels and minerals on which we are so dependent are, to a greater or lesser extent, finite and that we would act accordingly. It also assumes that the actions we take now will not jeopardise the ability of the next generation and generations to come to live full lives after we have gone.

However, this Bill falls down on these economic assumptions, if they are truly economic based on the roots which give rise to them. The Bill contains simple reliance on gross national product and gross domestic product as indicators of economic well being. It does not contain any measure of biodiversity, though we are committed to protecting that internationally. In fact, not only do GNP and GDP not take into account areas of quality of life for humans and the wider circle of species on which we depend, but they also reward and regard as positive such tragedies as car accidents, when one must spend money on funerals, hospitals, replacement vehicles and so on. They regard sickness, if it involves hospitalisation, as a benefit to the economy. Nobody here would really believe that, but that is the crudity of the economic measurements on which we are depending when examining this and previous legislation.

The encouragement for gross national product in the Finance Bill to expand road construction at the expense of topical places such as the Glen of the Downs and the limits put on public transport use by overcrowding—

Níl an ceart ag an Teachta anois.

Tá an ceart agam.

Tá an tAire Stáit ag cur isteach ar mo chuid ama. B'fhearr liom é a phlé leis ina dhiaidh seo.

Deputy Sargent without interruption.

There is no measure in the Government's economic strategy of water or air quality along economic lines. These are matters other countries have taken on board and I seek the same from this Government.

Regarding fossil fuel dependence, this Bill and the budget had an opportunity to tackle our growing dependence on imported fossil fuels by rebalancing our taxation system but failed to do so. The 75% of our energy which depends on imported fuel is set to rise to 90% by the year 2010 and that growing dependence is not just an environmental and economic dependence but makes us very vulnerable in international affairs. Instead we have increased dependence and we are building a new peat fired station which is described as state of the art, but this fails to recognise the inevitable limit of fossil fuel stocks. Our provisions for future generations ought to be a keen indicator of our sincerity in long-term planning. It has been said that the older generation rightly needs care after a lifetime of service to their country and families and that is correct. However, the next generation, which may not have been born yet, will definitely suffer because of short-sightedness in economic planning. Apart from not rebalancing taxation, the failure to decouple fossil fuel energy demand from economic activity means energy demand continues to grow at approximately 6% per year. The Minister for Finance, in not facing up to this, is displaying a recklessness he could relate to his colleagues at Cheltenham; the actions of a drunken, novice punter would be comparable to the failure to plan for the future.

Chun crich a chur leis, he knows our Kyoto obligation to reducing our 1990 figures by 2010 and yet in 2010 the primary schoolchildren of today will pick up the Bill for this Government because it has failed to internalise the costs of the type of wasteful economy which it underpins.

I propose to share my time with Deputy Mattie Brennan.

Is that agreed? Agreed.

I welcome the Bill, which implements the budget measures. Coupled with the national development plan and the recent agreement on the Programme for Prosperity and Fairness, it represents a huge investment in the country. It is a package that will see the ongoing development move from one positive step to another and will ensure prosperity for the forseeable future. However, will all boats rise on this tide? In spite of how good the budget was, I still have some reservations about how we proceed from here.

It must be acknowledged that there are regions which do not share in the economic boom. A number of years ago we attracted traditional industries from abroad which set up here, such as the textile industry. That industry competed well in a competitive international market, but recent developments such as the new minimum wage legislation – which I support – places a huge financial burden on these industries. I have one in mind in Kilkenny – we have seen Fruit of the Loom in Donegal – called Comer International, which has geared itself towards a competitive marketplace, invested heavily in upskilling its labour force, changed its machinery and ensured it is at the cutting edge of developments in the textile industry. This has meant a huge investment and new legislation means further investment is required. However, there is little scope for increasing profit margins in the textile and service industries and the Government will have to look at various measures to complement what companies like Comer International are doing. For example, employers' PRSI contributions could be cut, which would give them an edge they can work with. They will not find the scope in the marketplace to ensure continuity of their position. We should look after these companies which served us well in the days before more mobile and modern employment. If that requires special measures, those measures should be taken.

I have heard a number of Members complaining about the activities of IDA Ireland in their counties and constituencies. We must spend tax revenue with the same diligence with which it was earned by those who paid it. IDA Ireland has invested in various properties, sometimes in advance factories. The south-east region, the Carlow-Kilkenny constituency specifically, has suffered considerably from the lack of multinational investors. The region has not enjoyed the employment boom which has been experienced in places like Waterford, Limerick and Galway. We should look at the multinational companies which have located in these urban centres and see whether they would be prepared to extend their operations into the regions. We must ascertain whether they can be accommodated in the advance factories which lie idle in various counties and we must focus particularly on regions which have not enjoyed the full scale employment experienced in other counties.

We, in Kilkenny, were encouraged by IDA Ireland to build an advance factory and we did that through local involvement in a BES scheme. IDA Ireland provided an office block. The buildings are state of the art facilities yet they lie idle more than nine months after their completion. These buildings represent an investment in the region of £6 million. That money will not be well spent until such time as IDA Ireland successfully attracts multinational companies to fill the buildings and to offer Carlow and Kilkenny a well deserved opportunity. IDA Ireland should be asked to focus on these areas and to consult with multinational companies which may wish to expand.

IDA Ireland also owns Purcell's Inch which has not been fully developed and comprises second generation estates. That land should now be made available to indigenous industry whose needs would be compatible with the facilities on the estate. I urge the Minister to ensure that the IDA Ireland can raise extra revenue by selling those sites to interested companies which cannot find land because of the land shortage or which, perhaps, cannot afford the asking price for land which is zoned industrial. Industrialists and entrepreneurs are entitled to play their part at county level in the development of information technology. There is no reason why e-commerce and IT infrastructure cannot be extended to the counties to enable multinationals which are already located here to locate anywhere in the country while remaining at the cutting edge of developments in their own industries. The locations in which such infrastructure is already available should be the first to benefit.

County towns are dying on their feet for the want of industry. IDA Ireland should speak to people who understand the Japanese market, for example, and who could encourage Japanese factories, which are currently looking at Ireland and which are not interested in IDA Ireland support or for which IDA Ireland support is not a prerequisite, to locate here. Such people could be paid on an agency basis to encourage Japanese companies and others to locate in county towns. I am happy to say that Kilkenny and Thomastown were successful in this regard and that success should be built upon to encourage more companies to locate in this country and create jobs.

The first question industrialists ask is about roads infrastructure. It was announced this evening that the N9, which will form the central corridor between Waterford and Dublin, is to run through Carlow and Kilkenny. That is a positive development for which we have waited a long time. Industrialists will also ask about the education infrastructure. I encourage the Minister to consider the real possibilities which exist in regard to out-reach education. The Waterford and Carlow Institutes of Technology are both located close to Kilkenny. There is an interest in Kilkenny from the NUI, Maynooth, and Queen's University. I do not see why the State, which has invested in the development of these institutes of technology and in the NUI, Maynooth, cannot develop out-reach centres where it is viable to do so. I appreciate that it would impose a further burden on financial resources but it would complement the investment which has already been made in these institutions and it would make them more meaningful in local terms.

We have proven in Kilkenny that a locally funded out-reach centre working in conjunction with NUI, Maynooth, and St. Kieran's College and with interests from Armagh, Carlow, Waterford and Cork can be successful. Such a model would form a successful industrial base because industrialists always consider the location of the nearest educational institutions. The location of an out-reach centre in Kilkenny would com plement what is happening industrially in the county. If we do not receive funding for that in the near future, our efforts over the past four years will come to nothing.

Industrialists also inquire about health services. I regret to say that the developments which have occurred in the health area have not exactly benefited the south-east region. Everything is diverted to Waterford. Investment is currently being made in service provision at a site at St. Luke's in Kilkenny. Investment has already been made in Kilcreane Hospital and a proactive role should be adopted by the Department, in conjunction with the South Eastern Health Board, to ensure that the services which existed at the Kilcreane Hospital would at least be reinstated and that the necessary funding would be provided to develop them. A community as large as that in Kilkenny should at least have a Government funded home for the elderly. That is an issue which has been on the political agenda in my constituency for the past 15 years.

If we are to play our part in the economy, these issues must be addressed. If they are not addressed, we will continue to lag behind and will not be able to play our rightful role in a developing and successful economy. Investment must be tied into a regional plan in conjunction with the health boards and local authorities. A focus and emphasis on industrial development is necessary. This will complement local investment. The self-help ethos has been the cornerstone of our development. I commend the Bill to the House.

The new millennium has brought great times. Our people have a new confidence and a good standard of living of which we only dreamt a short time ago. Matters have improved recently. This Government can justifiably claim credit for our economic buoyancy. I congratulate the Minister on the budget which has laid the foundation for the continued prosperity our people rightfully enjoy. I accept the budget has not satisfied everybody. It is fair to say many of our workers have been burdened with a crippling level of income tax for far too long. The Minister was right to introduce measures to substantially reduce these penal levels of taxation.

This budget delivered the largest tax package in the history of the State, with substantial direct tax reductions for everyone. I welcome the tax reductions of more than £1 billion in this budget, in addition to the £1 billion in tax cuts in the Government's first two budgets. This budget also removed 70,000 people from the tax net, including 10,000 people over 65 years. It is a comprehensive plan to enable everyone to enjoy a higher standard of living and a better quality of life. These are the result of better employment opportunities, a decline in emigration, a reduction in our foreign debts and the promotion of our national development plan.

There has been great economic growth in the past four or five years, particularly since the present Minister for Finance entered office. Countries around the world are wondering how we have achieved it. I am convinced the policies implemented by this Government are behind it. The Minister for Finance spoke at the launch of the development plan in Sligo some weeks ago. He referred to how the policies implemented by the former Taoiseach, Charles Haughey and the former Minister for Finance, Ray MacSharry, led to current economic growth.

I remind the House that this Government successfully negotiated the retention of Objective One status for Border, midland and western counties. Nobody can deny this was a great victory for this country, the Taoiseach and his Cabinet. It was one of the greatest achievements for this country. I am delighted to represent an Objective One region. There were objections in this House and from the EU about our being awarded Objective One status. However, I am delighted we achieved it.

In his Budget Statement, the Minister expressed concern about the problems which have arisen from our economic success including the costs facing families where both parents work, urban sprawl and the rising cost of housing. I welcome this Government's provision of more than 40,000 houses and its commitment to increase this number. It is a sign of the times that my local authority and others throughout the country cannot get enough builders to build houses. As a carpenter, I had to emigrate from this country many years ago. A large number of people are coming back from England, America and all over the world to work here. If one listens to the accents, one realises the number of English people working here. We cannot find enough people to build our houses. I am delighted there is so much employment.

As a rural Deputy, I acknowledge the part played by the Minister in implementing the rural renewal scheme. Many people were not satisfied with it – my parish was divided in two and I do not live in a rural renewal area, as I live a long distance from the Shannon catchment area. I welcome the introduction of the scheme in parts of County Sligo, particularly Ballymoate and Tubbercurry. The benefits of this scheme are evident. I am delighted that every town and village in the designated areas have been transformed. Many houses have been built and more are at the planning stage. Businesses are thriving and the tax incentives are encouraging new ventures, which are being started daily. The 10% tax incentive is also motivating people to refurbish old dwellings. This is the greatest scheme to be introduced in rural areas. I hope that when it is completed in two or three years, the Minister will introduce it in other parts of the country.

I welcome the provision of a one-stop-shop in Tubbercurry by the Minister for the Environment and Local Government which will include a library, motor taxation and Revenue offices, the health board, FÁS and provide information on planning, social welfare and Leader schemes. This is mini-decentralisation which is great for the town. I ask the Minister to continue the good work. When the tax incentives expire in three years I hope he will provide rural renewal for the villages of Cloonacool, Aclare and Curry.

I am grateful to those who contributed to the debate yesterday and today. The main Opposition spokespersons concentrated principally on the macro issues surrounding the budget and the Finance Bill, and that is as it should be. Deputy McDowell referred to the PRSI and health levy changes. I appreciate the points he is seeking to make but these changes are relevant to the Social Welfare Bill and are not in the Finance Bill.

The main point which Deputy Noonan made is that the budget lacked direction and gave a confused economic signal. I reject that. The budget is consistent with the tax reform proposals put before the electorate by the Government parties. If keeping one's promises is inconsistent or eccentric, I am happy to be so labelled.

At what point in the election manifesto did the proposed individualisation of the tax bands emerge?

The Fianna Fáil election manifesto made a number of promises. One was to reduce the number of people on the standard rate of tax to approximately 80% of all taxpayers.

By individualisation?

The Deputy will be one of the happiest Deputies in Leinster House in years to come when all my promises in this regard are fulfilled. When he succeeds me as Minister for Finance, he will be happy to have all the work done for him beforehand.

The main feature of the budget tax strategy has also been endorsed by the Programme for Prosperity and Fairness. That programme sets out the direction for tax policy endorsed by the social partners. It also recognises that tax reductions can be delivered in more than one way – through increased allowances, widening bands or reducing rates. If the Opposition is confused by the budget, the voters are not as recent opinion polls indicate.

Much emphasis was laid on the rise in inflation and various ominous warnings were made about competitiveness and the future of the national consensus on pay. I was accused of playing down this issue. It is disappointing that there is so much misunderstanding about how inflation is determined in an economy like Ireland. As the House is aware, the Irish economy is small and open. Historically, external factors such as international inflation and exchange developments largely determined our rate of inflation. It is no different today. Inflation has increased recently due to the weakness of the euro and the increase in oil prices. The euro has fallen by approximately 15% against the dollar and 12% against sterling since the beginning of 1999. It is true that this factor is pushing up prices in the rest of Europe. But the weakness of the euro is having a greater effect here because we trade more with countries outside the euro. In addition, crude oil prices have risen by approximately 150% in dollar terms since March 1999. The rise is closer to 180% in Irish pound terms when the decline in the euro is factored in. This has led to a dramatic effect on energy prices, adding over 1% to the rate of inflation. The budget day increase in excise duty has also added to inflation by about 0.75%. I am sure that all Deputies in this House agree this is a sensible and important health promotion measure. Long after Irish inflation has fallen back to more moderate levels, we will see the benefits of this in terms of reduced smoking related illness.

It is being suggested that budgetary policy is irresponsible and adding to inflation. This is clearly not the case given that inflation is mainly determined externally. In addition, the Government is running the largest budget surplus in the history of the State and one of the largest in the European Union. If some believe that policy should be tighter to reduce inflation, they should call for lower expenditure and/or a higher tax burden and say clearly which areas would suffer. I am confident that as the impact of the negative external factors are reduced, inflation will begin to fall in the second half of this year.

I note that Deputy McDowell in his contribution shared my analysis of the situation, even if he did not go all the way with my position. I also note that he shares my scepticism over the economic advice we receive from some international commentators. He suggested a lack of concern on my part for the low paid. Deputy Deenihan also addressed this issue. The facts are that in my first three budgets I acted to exclude over 175,000 low paid from the tax net. In the previous three budgets the corresponding figure was 38,000. They say action speaks louder than words and this is certainly the case on this issue. Deputy Rabbitte called the budget anti-working class and anti-poor but perhaps he was not aware of the facts just mentioned.

Deputy Noonan suggested that I could have balanced the impact of the tobacco excise increase by reductions in excise on petrol and fossil fuels. This option is not open to me if we are to meet environmental commitments to reduce unacceptable levels of emissions to the atmosphere. I looked at possible changes to VAT but my priorities are to reduce direct tax to reward effort and increase the supply of productive resources rather than to subsidise consumption. I welcome, however, the Deputy's support for the tobacco measure on health policy grounds. There is no discord between us on that.

The Deputy also criticised the individualisation proposals and the £3,000 home carer's allowance as contradictory. I do not go along with this critique. The increase in the standard rate band incentivises those two income families over £28,000 per annum and is a direct consequence of the substantial increase in the standard rate band for single earners. The £3,000 allowance on the other hand is available to all single income families, whether above or below £28,000 per annum, who meet the conditions. The income disregard and the tapered withdrawal of the relief are intended to minimise the labour market effects.

The Deputy also referred to the Programme for Prosperity and Fairness as moderating the individualisation policy because of the references in it to keeping the band under review in light of wage rises. Deputy Rabbitte also made much of this misconception in his contribution. The relevant passage in the Programme for Prosperity and Fairness reads as follows:

The social partners support the policy of establishing a single standard rate income tax band for all individual tax payers. They also agree that the standard rate income tax band should be kept under review in the light of increases in income levels and the objective of ensuring that, over time, at least 80% of taxpayers are not subject to the higher rate of income tax.

This is the full and correct position and is not as portrayed by the Deputies. My proposals set out to achieve and exceed the 80% target and this remains the goal, as the Minister of State, Deputy O'Dea, made clear. The policy initiative in the budget in this area was not a solo run, as Deputy McDowell sought to portray it, but a Government policy which will be enacted through this Finance Bill. Perhaps English is dealt with in a different format in Limerick from other parts of the country. I heard Deputy Noonan yesterday in the Dáil and when the Programme for Prosperity and Fairness was published putting this construction on the section in that programme. I am outlining the position. I do not know whether Deputy Rabbitte read the programme. Perhaps he took his interpretation from what Deputy Noonan said which was that the widening of the bands to £17,000 will apply as per wage increases. The measure in this paragraph means a widening of the £28,000 band as incomes increase. If the Deputy does not wish to take my word on the matter, I invite him to ring either ICTU or IBEC who will agree with my construction. This is what the paragraph means. However, Deputy Noonan and others will have to wait for my next two budgets to see how matters progress.

Deputy Noonan referred to changing of expenditure targets by the Government. I wish to emphasise at the outset that controlling expenditure within prudent limits is a key element in the Government's budgetary and economic strategy. The Deputy will be aware that the recently agreed Programme for Prosperity and Fairness will inevitably impact on public expenditure levels. The programme will contribute to maintaining the competitiveness of the economy and provide a strong base for further economic prosperity while improving the quality of life and living standards for all. In this context I am convinced that the expenditure undertakings included in the agreement represent an appropriate balance between the requirements of budgetary prudence and the benefits accruing to the economy as a whole from a new partnership agreement.

Deputies Deenihan and Noonan raised the credit union issue and the question of the EU complaint alleging an unfair bias in favour of the credit union sector. As I made clear, I sought to react positively to the credit unions' concerns in 1998 but my efforts were rebuffed. I drew attention in recent remarks to the EU aspect of credit union taxation and was accused of introducing a non-issue to obscure the debate. This is not the case. The EU complaint is live and very relevant. Any further moves to favour credit unions would require EU approval for which there could be a price in terms of the credit unions' corporate tax exemption. We ignore the EU state aids rules at some peril. I know this is so, but the credit unions do not appear to have grasped that fact.

We should also be clear that there are tax equity issues involved in what the credit unions want. I must look to the interests of all taxpayers and their entitlement to be treated fairly. This is a wider concern than the insistent demands made by one sector. There are also tax evasion issues. I do not consider it wise to provide tax free, non-reportable accounts in the light of all we have seen with regard to DIRT and financial institutions in the past year.

Deputy Deenihan raised two issues. One related to profit sharing and gain sharing and his disappointment at the absence of new initiatives in the Bill. I am also anxious to make progress on this item to the benefit of both sides of industry and to assist the newer and dynamic sector of the economy. The Programme for Prosperity and Fairness envisages the setting up of a working group consisting of representatives of ICTU, IBEC and the Departments concerned to prepare proposals in this area at an early date. This group has already commenced its work and it met for the first time last week on 16 February.

The second issue related to film relief. I accept Deputy Deenihan's credentials on this matter and I am prepared to discuss the issue of the appropriate level of tax relief on Committee Stage. The current relief is generous and I do not accept, when the top rate of tax is cut, that we have to increase the level of relief to compensate for the cut. As I said in my opening remarks, the EU Commission has taken the view that tax deductions which overcompensate for money actually laid out may be operating aids to business, something which we now have to avoid.

Deputy McDowell defined the low paid as all those below the average industrial wage which stands at approximately £17,000 per annum. This is a wide definition of low pay. However, using that measure, the budget did much for the group earning between £14,000 and £17,000 by increasing the one earner standard band. I have also done much for single persons earning over £14,000 in my budgets by cutting the higher rate of tax by 4%. Perhaps the Deputy and I are closer on policy on the reform of the tax system than either of us thinks, but I cannot persuade myself of this.

Neither can I.

I do not accept his analysis that my budget prejudices social partnership. We have successfully negotiated a successor to Partnership 2000 which is being put through the balloting process at present. The new programme sets out agreed texts on tax policy. On the individualisation issue, the trade union reaction at the time of the budget, and since then, has been uniformly positive.

Deputy Yates made the case for a new intermediate income tax rate of 35% instead of cutting the top rate of income tax. However, such a new rate would be an effective cut in the current top rate of 11 percentage points for those taxpayers concerned. Perhaps he thinks I should go further in cutting the top rate of tax. He also mentioned the issue of low-sulphur diesel and representations by private coach operators. This can be taken up on Committee Stage.

Deputy Perry criticised me for favouring the rich and he said that the budget started tax reform at the top instead of at the bottom of the income scale. Interestingly, his party's tax proposals, if implemented, would have given a single person on £50,000 per annum nearly twice the tax cut in percentage terms as a single person on £10,000 per annum. This is a strange way to achieve a bottom-up approach.

Deputies on both sides welcomed the CAT changes on the family home and I was happy to deliver on that matter. On the wider issue of the change in CAT rules, the Minister of State, Deputy O'Dea, ably argued the case that these changes would improve the effectiveness of the CAT code in applying the tax even with the reduction in the CAT rates.

A number of Deputies complained that there was an absence of fair and practicable proposals on child care in the budget. I draw their attention to the commitment of £250 million to the child care problem in the national development plan. The first instalment of this money was committed in the budget which contains an allocation of £46 million. This money will be principally directed at increasing the supply of child care places, particularly in disadvantaged areas. In addition, I have introduced enhanced tax concessions in the Finance Bill to encourage employers to become involved in solving this problem.

I draw the House's attention to paragraph 4.3.11 of the Programme for Prosperity and Fairness which commits us to adopting, before the end of 2000, an equitable strategy to support parents in meeting their child care needs for implementation in the period of the programme. We intend to address proposals such as those put forward in the partnership negotiations, which included proposals for direct payments for each child. Thus, there is a procedure in place to carry the matter forward.

Many Deputies raised a wide variety of points which I cannot cover in the time available. A few concerned demands for more expenditure in various areas. Others were supportive of the further measures taken in the Bill to tackle tax evasion. I thank them all for their comments and I have taken note of them.

The measures in the Bill will make a significant impact in improving and adding to the real wealth of our community. I urge the House to give the Bill its Second Reading as proposed by the Government.

Question put: "That, in respect of the Finance Bill, 2000, the words proposed to be deleted stand part of the main Question and, in respect of the Financial Motions by the Minister for Finance for 1997 and 1998, Motions 9 and 5, respectively, are hereby agreed to."

Ahern, Dermot.Ahern, Michael.Ahern, Noel.Ardagh, Seán.Aylward, Liam.Blaney, Harry.Brady, Johnny.Brady, Martin.Brennan, Matt.Brennan, Séamus.Browne, John (Wexford).Byrne, Hugh.Callely, Ivor.Carey, Pat.Collins, Michael.Cooper-Flynn, Beverley.Coughlan, Mary.Cullen, Martin.Daly, Brendan.Davern, Noel.Dennehy, John.Doherty, Seán.Ellis, John.Fahey, Frank.Fleming, Seán.Flood, Chris.Foley, Denis.Fox, Mildred.Gildea, Thomas.Hanafin, Mary.Haughey, Seán.Healy-Rae, Jackie.Jacob, Joe.Keaveney, Cecilia.Kelleher, Billy.

Kenneally, Brendan.Killeen, Tony.Kirk, Séamus.Kitt, Michael.Kitt, Tom.Lenihan, Brian.Lenihan, Conor.McCreevy, Charlie.McGennis, Marian.McGuinness, John.Martin, Micheál.Moffatt, Thomas.Molloy, Robert.Moloney, John.Moynihan, Michael.Ó Cuív, Éamon.O'Dea, Willie.O'Donnell, Liz.O'Donoghue, John.O'Flynn, Noel.O'Hanlon, Rory.O'Keeffe, Batt.O'Keeffe, Ned.O'Malley, Desmond.O'Rourke, Mary.Power, Seán.Reynolds, Albert.Roche, Dick.Ryan, Eoin.Smith, Brendan.Smith, Michael.Wade, Eddie.Wallace, Dan.Wallace, Mary.Woods, Michael.Wright, G. V.

Níl

Ahearn, Theresa.Barnes, Monica.Barrett, Seán.Bell, Michael.Belton, Louis.Boylan, Andrew.Bradford, Paul.Broughan, Thomas.Bruton, Richard.Burke, Ulick.Carey, Donal.Connaughton, Paul.Cosgrave, Michael.Coveney, Simon.Crawford, Seymour.Creed, Michael.Currie, Austin.D'Arcy, Michael.Deasy, Austin.Deenihan, Jimmy.Durkan, Bernard.Enright, Thomas.Farrelly, John.Ferris, Michael.Finucane, Michael.Fitzgerald, Frances.Flanagan, Charles.Gilmore, Éamon.Gormley, John.Hayes, Brian.Higgins, Jim.Higgins, Joe.Higgins, Michael.

Hogan, Philip.Howlin, Brendan.Kenny, Enda.Lowry, Michael.McCormack, Pádraic.McDowell, Derek.McGahon, Brendan.McGinley, Dinny.McGrath, Paul.McManus, Liz.Mitchell, Gay.Mitchell, Olivia.Moynihan-Cronin, Breeda.Naughten, Denis.Noonan, Michael.O'Keeffe, Jim.O'Shea, Brian.O'Sullivan, Jan.Penrose, William.Perry, John.Quinn, Ruairí.Rabbitte, Pat.Reynolds, Gerard.Ring, Michael.Ryan, Seán.Sargent, Trevor.Shatter, Alan.Shortall, Róisín.Stagg, Emmet.Stanton, David.Timmins, Billy.Upton, Mary.Wall, Jack.

Tellers: Tá, Deputies S. Brennan and Power; Níl, Deputies Barrett and Stagg.
Question declared carried.
Top
Share