Finance Bill 2004: Report Stage (Resumed) and Final Stage.

Debate resumed on amendment No. 2:
In page 7, between lines 16 and 17, to insert the following:
1.—The tax bands, exemption limits and tax credits relating to income tax set out in the Finance Act 2003 are hereby increased by 7 per cent with effect from the tax year 2004.".
— (Deputy Burton).

The purpose of this amendment is to ensure the budget is amended to return to ordinary workers some of the money the Minister for Finance is taking by stealth from their pay packets. The Minister and Fianna Fáil are refusing to address the unfairness at the heart of our tax code. The Minister looks after his friends, the very wealthy, those who own bloodstock and are breeding stallions and those who are non-resident for tax purposes but are able to attend every race meeting and glitzy social function in the country. However, the person on PAYE may look out. We heard the Minister for Social and Family Affairs acknowledge the relative gap between the rich and the poor in Ireland has increased incredibly during the period of the Minister for Finance's seven budgets. Now there are many more well-off people and the Labour Party is very proud to have been part of the critical moves made to make the country prosperous and to increase employment, but that has not benefited everyone. Unfortunately the relative gap has grown between rich and poor people, such as widows, those on low incomes and those who are unemployed or disabled. Children are also living in poverty. We are trying to ensure that our tax system is reformed in a realistic way so taxpayers have a fair deal. Everyone should pay his or her fair share.

In moving this amendment I want to fire a warning shot across the Minister's bow. At the Fianna Fáil Ard-Fheis last weekend, the Taoiseach, the Minister and other Fianna Fáil Ministers were very arrogant. They are assuming with the relatively favourable economic outlook that people will forget what the Government has done in cheating people of a fair share of the country's prosperity. We have a mad scramble for wealth which is having negative consequences for society. As we have seen in recent court cases, it is producing a society for parts of which over-consumption is having negative consequences. It makes family and community life very difficult. The only people to whom we are supposed to look up are the Minister, Deputy McCreevy's friends among the super-wealthy and tax exiles. They are to be lauded at every street corner if they give a few bob to charity, yet they give nothing like wealthy American philanthropists who donate between 2% and 3% of US GDP. In Ireland it is poorer people who contribute in the greatest numbers to charities like the Society of St. Vincent de Paul, Trócaire and Concern.

The Minister and his Fianna Fáil colleagues are very proud of having created a two-tier society. The Minister spoke about people on incomes of over €150,000 contributing 28% of the income tax take. As the Revenue Commissioners' figures are gross rather than statistical, they are very difficult to analyse. As I said before the suspension, the Minister's €150,000 figure relates in many cases to two-income families. A married couple consisting of two civil servants above principal officer level would have an income in excess of that amount and therefore would count among the wealthiest for tax purposes. The reason is that the income for tax purposes of many well-off people is significantly reduced because it is not taxable as in the case of stallion and stud fees. Such people also take advantage of schemes such as self-administered pension schemes, contributions to which are deducted with the effect that their reported income is much lower.

I hope Fianna Fáil agrees to amendment No. 2 to restore some sense of equity to the tax system.

Amendment put and declared lost.

Amendments Nos. 3 and 7 are related and may be discussed together, by agreement.

I move amendment No. 3:

In page 7, between lines 16 and 17, to insert the following:

"1.—From 1 May 2004 the exemption limit for income tax shall be increased to a level equal to the hourly rate of the minimum wage for the time being multiplied by 40 multiplied by 52.".

The Minister will recall that I moved an amendment to the same effect on Committee Stage and a lengthy discussion on this very important matter followed. The effect of the amendment I once again request the Minister to adopt would be to remove all those on and below the minimum wage from the tax net. This is a very important step which the Minister should take. There are those who share the Minister's political outlook who believe it is desirable. It is impossible that every Member on the Government benches could be unaware of how difficult it is for ordinary families to cope in today's very straitened financial circumstances. The people my proposed measure would affect are those who have to carry the worst effects of the ever-increasing list of stealth taxes which have applied over recent years, particularly in the past 12 months.

It is people on or below the minimum wage who fare worst in our health services. I referred to this fact earlier today as well as on Committee Stage. I must point out some of the salient facts in this regard because it is in the area of health that I am most concerned. I tell the Minister time after time that my critical concern is the terrible choice many families and single parents coping with children have to make between an essential item for their daily life needs and a visit to a general practitioner to secure an assessment and a prescription with the consequent pharmacy visit. This is a terrible reality in today's society.

A worker on the current minimum hourly rate of €7 who works for 40 hours per week earns in the order of €280 before tax. That is nearly twice the income limit for a medical card. We are talking here about a single person living alone. The situation is even worse for those who have to cope with dependants, in particular children. Out of this meagre weekly income rate, a worker must pay for doctor's bills and medicine costs. Despite the fact that the medical card qualification chart raises the figure for a couple aged up to 65 years to €206.50 and for children under 16 years by €26, a husband, wife and two children with an income of €280 before tax will fail to qualify for a medical card. I know many families trying to cope on that level of income who do not qualify for a medical card. Clearly, they cannot afford private medical insurance.

With every stealth tax that is introduced, such families must shoulder the same burden as those at the highest levels of income earning in this jurisdiction. There seems to be no relief. My amendment seeks to offer relief to these families by removing from the tax net those people who are on or below the minimum wage. Many of these people were promised by the Government prior to the May 2002 general election that they would be among the 200,000 additional persons to whom medical cards would issue. Given the current facts and figures, that simply will not happen. Fewer people hold medical cards today, which statistic is kinked as they are automatically offered to people over 70 years of age. When the figures for the over 70s are taken out of the overall number holding medical cards, it will be seen that many fewer people in earned employment hold medical cards than at any time previously.

That is a damning indictment of the Government's failure to address the needs of the hardest pressed members of our society. Its pre-election promise was worthless. The Government owes it to those people to take effective action now to address the very serious financial straits in which they find themselves. This should be contrasted with the Government's refusal to adopt my amendment heretofore and take those on the minimum wage out of the tax net altogether despite the fact that it has been signalled as an aim. In my view, it is but an aspiration. The commitment in the Government's manifesto to allocate a further 2,000 medical cards should be contrasted with its commitment to those affected by corporation tax.

In each step along the way, the Minister remains solid to his stated position — his promise to the corporate sector to reduce corporation tax. The Minister reduced the corporation tax rate to 12.5% even though the ESRI said Ireland would remain buoyant and competitive at rates of up to 17.5%. The Minister did not let down the corporate sector. The contrast in the Minister's disposition to certain sectors in society is what most underscores the inequality of his approach and that of the Government. He has presided over years of plenty and, while he kept his promise to certain sectors, he was prepared to let those who most needed his help and assistance perish at the end of the heap. I think of people who need medical cards and the relief those earning at or below the minimum wage would receive in being removed from the tax net. The Minister has dropped this and let these people flounder. He has made a calculation, however it is explained, that they mattered least. The constituency I represent tells me that they matter most.

The quality of our democracy will be judged on how we address those most in need. It is those on low wages who are worst hit by stealth taxes, particularly those imposed in the past year. The VAT increase was immediately passed on to consumers. Each member of this society is a tax contributor by virtue of the tax on consumables. There have been increases in the price of fuel, public transport, television licences, ESB rates and in many more sectors. We have seen substantial increases in professional fees. The professional fee increases most affecting life for ordinary people are those applied by general practitioners. While I mean no slight on GPs, that is a fact. I am deeply concerned about the terrible choices that parents bringing up children have to make.

Rental levels for private accommodation are another area that we have repeatedly addressed in this House. Rents continue to spiral upwards. However, there is a rental threshold that must be observed if an applicant is to qualify for rent supplement. This threshold is so far removed from the reality of rented private sector accommodation that it poses the question, who is kidding whom? The Minister for Social and Family Affairs vexatiously introduced further obstacles in the rent allowance scheme. People may not now qualify for months. Some of these people may have already been in rented accommodation, found employment and then found that their employment ceased or was significantly reduced and will not now be readmitted. I recently documented individual cases such as this to the Minister for Social and Family Affairs. In addition, the Government has allowed local authorities to abolish maximum rents for local authority housing. Measures such as these hit the low paid worst of all.

On Committee Stage, the Minister indicated that the cheaper option would be to increase the exemption limits. He went on to say that this would create a poverty trap. I disagree with the Minister because poverty traps exist and a method must be found to relieve the families and individuals that are caught in them. No amount of word play or making a virtue of doing nothing will in any way address their needs. I commend amendment No. 3 to the Minister. He should think seriously about the arguments I have offered. He has heard them made before by other Deputies and by me. He must have some sense of this reality within the wider community that he represents. Surely this cannot only be a reality in Cavan, Monaghan and other constituencies with which I am familiar. There must also be people within this catchment within the Minister's constituency. They will look to the Minister to employ measures that will bring necessary relief to them in their straitened circumstances.

I want to move amendment No. 7.

It is not necessary to move the amendment at this stage. However, the Deputy may speak on the amendment and when we reach the amendment it can be formally moved.

May I speak on it now?

I would be happy if the Chair would indicate to me when five minutes have elapsed. I will try to keep my contribution brief.

If Members confine themselves to the amendments before the House we might get through more of them.

The purpose of amendment No. 7 is to exempt those on the minimum wage from income tax. Despite the progress that has been made by the Minister in this area, far too many people on the minimum wage still pay income tax. The Minister has a number of options through which he could improve the position of the most lowly paid. One of the options is to completely remove the low paid from the tax net. The Minister appears to be arguing that this is too expensive to do. However, there are other options. By allowing inflation and not indexing bands and credits etc., as the minimum wage increases the Minister is drawing those on marginal and low rates of pay back into the tax net. Arising from his failure to reform the PRSI system, a distinct poverty trap is being created. There is also a distinct incentive for the return and growth of the black economy, particularly regarding employees who come near the minimum wage level of €240 per week. Such employees may seek to be paid this amount legitimately and have additional payments such as overtime paid off the books.

The Minister is as aware as I am that the way in which he has structured his budgets has given a rebirth to the black economy in a way that has not been seen for 15 years. This is a retrogressive step and is part of the faulty architecture of the Minister's budgets. Unfortunately, it is poorer families that are paying the cost.

I profoundly disagree with the third element of the Minister's budget and financial strategy. In it, we have a PRSI trap, a minimum wage and overtime trap, and worst of all we have a serious medical card trap for low paid families. If someone is earning at or near the minimum wage, grossing approximately €240 per week, they will become liable for the low level of PRSI on all this income and if they have two children or fewer they will lose qualification for a medical card.

International statistics indicate that, like the United Kingdom, we have high rates of childhood asthma. It is caused by either climate and environmental change or a lack of appropriate heating and air systems in our homes. Many families with two or three children under the age of seven or eight may have one or more children with an asthmatic condition.

The Deputy is moving well away from her amendment.

No, I am talking about the minimum wage and the Minister's budget strategyvis-à-vis low-paid families. He has created a series of traps for low-paid families. He could have taken them out of the tax net but he chose not to do so. Equally, he chose not to compensate them by way of the other budgetary and finance mechanisms available to him. As a consequence of the Minister’s flawed budget architecture, families on or close to the minimum wage pay tax. There is a return to the black economy because people who earn small amounts of overtime come into the tax net. Someone in that situation does not qualify for a medical card. People who do not qualify for a medical card reduce the amount of work they do to fall below the medical card and the tax thresholds. They end up making decisions on how to avoid the impoverishment of their families.

The Minister's budget architecture is deeply flawed. It makes life worse, especially for families on the lowest income scales. Lone parents, many of whom are women, must choose between remaining at work or getting a medical card, especially for their asthmatic children. A visit to the doctor plus medicine will cost €50 to €60 out of their net income. The Minister should do the arithmetic with me. If their gross income is approximately €240 and a visit to the doctor and medicine costs €50 a week, what percentage of their gross income does this amount to? If he cannot accept the Labour Party's amendment, how does he propose to eliminate the poverty traps to which I have referred? I cannot understand how his colleague, the Minister for Social and Family Affairs, was so codded by him in the changes she made to social welfare payments. She has failed to see the return of income poverty traps, overtime traps and, in particular, medical card traps for low-income families.

I support the amendment, even though it is not ideally drafted. It is flawed in that it creates a high marginal tax rate of 40% on very low incomes. I am sure the Minister will indicate that this creates problems. On the other hand, addressing the needs of the low paid at work is something we looked to the Government to address but it is one of the areas it overlooked.

I recognise that low tax regimes have promoted growth in the economy. One of the bonuses of this has been greater employment. We have succeeded in addressing poverty by getting more people into work. Equally, we must look at the position of those at work on low pay. The Government has undermined their position in many ways. Other Deputies adverted to the failure to increase medical card limits. This year the Government made an explicit decision that anyone on low pay at work, who previously could apply for rent supplement, now cannot do so by virtue of the fact that they are working. One must be unemployed to get rent supplement, which is a retrograde step. There is also a family income supplement which is not being taken up. Many of the low paid at work do not receive their entitlements under the scheme, yet the Government has failed to allow a tax refund that would be paid automatically to such eligible people.

I contrast the treatment of the low paid at work in private rented accommodation with someone who is either unemployed and drawing a rent supplement or someone in a local authority house. The truth is that the low-paid person at work gets a subsidy from the State of no more than 4% of their rent, whereas the rent supplement or home ownership relief gives substantial subventions to people in the same position on the same income. We are creating a significant disadvantaged group in the private rented sector which receives just €4 a week in tax relief. This is real discrimination. There is a substantial and increasing group of poor families in private rented accommodation struggling to get by. The Minister, together with the activities of the Minister for Social and Family Affairs, has hindered their cause and not helped it. Political awareness of the fact needs to be raised.

Children who drop out of school early almost invariably come from low-paid backgrounds where families struggle to get by in private rented accommodation. This is a perfect scenario for early school drop-out. There is no special educational supplement to help these children stay in school and thrive. The family income is not made available to them. They are prevented from getting medical care and they are told they are not eligible for rent supplement. This is discrimination against a group in need. I do not subscribe to the view that the Minister is hard-hearted, conservative and always wanting to disadvantage the poor, but he has overlooked an important group which needs to have its concerns met. While the amendment will not resolve the issue, it points the signpost in the direction the Minister and his colleagues need to move.

The fact that people are paying income tax while still on the minimum wage is a direct result of the lack of real progress in the tax system with just two tax rates. People are coming into the income tax net and subsequently going from the standard to the higher rate of tax on a medium to low level of income. We could remove those on the minimum wage in the context of a total reform that would have people entering into the tax net at a much lower tax rate. There could be an introductory tax rate of approximately 10%. Some taxation experts say the most progressive tax system would have up to five different rates, beginning at a very low rate and increasing to approximately 45% at the top rate.

The Minister has cited the cost involved and the different priorities in dealing with the elderly and social welfare payments in this year's budget as reasons for not removing all minimum wage earners from the tax net this year. It need not have been a cost. It could have been achieved by way of a re-allocation of taxes throughout the system. There should have been the political will to ask those at the higher end who should be paying more to pay more. This might not have even involved an adjustment to the tax rate. It could have involved some type of tapering with tax credits and tax bands. Given how little was said in the budget in terms of new initiatives and how much was left unchanged, which continues to bring about inconsistencies and injustices for those on low wages, it is unfortunate that this opportunity has not been taken this year.

I agree with Deputy Richard Bruton's argument that a real change to the family income supplement could have been brought about through refundable tax credits. While some on the minimum wage pay tax, others do not but instead receive a tax credit from which they do not receive the full benefit. Direct payments have to be applied for and are costly in terms of administration. It would be better if direct payments were paid automatically, as a refund of credits already allocated would be a more efficient and fair way of dealing with poverty at this level. It is unfortunate that this has not been taken up.

Deputy Richard Bruton made an analogy on the inconsistencies of the accommodation assistance given to people on a low wage as opposed to those on social welfare entitlements. Another inconsistency is that many of the tax incentives put in place by the Minister, which he inexplicably continues, allow people to develop rented properties in such a way that income received from such properties is not liable for tax, the result of which is that they are rented out at high rents. Those who rent are advantaged in terms of their own income and they subsequently get a tax benefit. When we have these inconsistencies, especially in the housing area, it is no wonder people continue on the minimum wage. Such people are still in the tax net but carry a higher burden of their income than the average burden for most taxpayers. This is a disproportionate burden to those who are on the highest income within our tax system and yet another Finance Bill leaves this inconsistency intact.

As I pointed out on Committee Stage I cannot accept these amendments as proposed by Deputies Ó Caoláin and Burton for a number of reasons.

The Government has a clear policy on exempting those on the minimum wage from taxation. An Agreed Programme for Government sets out the achievements of this objective as a priority over the next five years. This is subject to the overarching requirement for sound economic and fiscal policies and keeping the public finances in order. Sustaining Progress endorsed this approach and states:

To the extent that there is any scope for personal tax reductions, progress will continue to be made over the three budgets contained within the lifetime of this Agreement towards removing those on the minimum wage from the tax net.

This is consistent with the Government's broader economic strategy for sustaining growth, strengthening and maintain the competitive position of the economy and sustaining employment.

Section 3 of the Bill which provides for a 13% increase in the value of the employee credit, raised the entry point to taxation to 90% of the new increased minimum wage, which came into effect at the beginning of last month. This means that for a single PAYE person the first €12,800 per annum, or €246 per week, of earnings will be tax free as compared with €198 in 1997. Over the last two budgets and despite tighter resource constraints, the Government has demonstrated its commitment to fulfilling its policy of exempting the minimum wage from taxation, as resources permit.

On Committee Stage I outlined in some detail the difficulties with the particular mechanisms suggested by the Deputies for exempting the minimum wage from taxation, that is the use of a general exemption limits. I stated that the option was there in the last two budgets to exempt the minimum wage fully using the exemption limits, which would be less costly than the route chosen. However, I decided against doing so on both occasions because it would not have been the correct thing to do. Such an approach would be complex to implement not only for the Government but also for employers because 146,000 people would be brought into the system of marginal relief. It would cost €160 million in a full year. In addition, it would run contrary to the thrust of Government policy over recent years.

This stems from the recommendation of the expert working group on the integration of the tax and social welfare systems. It aims to move away from the use of the general exemption limits as a means to remove lower paid individuals from the tax net. The expert working group highlighted two particular difficulties associated with the use of exemption limits, namely, poverty traps arising from the interaction of the limits with the family income supplement scheme and large numbers of income earners on a high marginal rate of tax. With regard to the high numbers of income earners on marginal relief, the group noted that the main disadvantage of the exemption limit marginal relief system is one of principle. It can also evolve a second income tax system for those on low and middle incomes.

Since 1997 I have increased exemption limits for those aged 65 and over by 130%. As the Deputies will appreciate, work disincentive issues do not arise to any significant extent for elderly income earners. For 2004, it is estimated there are 14,200 income earners in marginal relief but all of these are aged 65 and over.

The Deputies have suggested a course of action which if followed would result in lower cost to the Exchequer but would be contrary to the policies I have pursued as Minister for Finance. As the expert working group indicated, the general exemption limits can have a central role in the creation of poverty and employment traps with consequences for employment. Completing the process now of exempting those on the minimum wage to the preferred route of increasing their personal credits would be prohibitively expensive. For example, to complete the process using the increase in the personal credit alone would cost €460 million in a full year. To achieve the same result with an increase in the PAYE credit alone would cost €350 million in a full year and to do so using equal increases in the personal and PAYE credit would cost €390 million in a full year. Against this scale of cost, the Government prudently set itself the more realistic target of exempting the minimum wage over the full period of its present term of office.

For a married couple with one PAYE income and a carer in the home, the first €466 per week is tax free, an equivalent of €24,250 per annum. A single parent or married couple with income less than the minimum wage have no tax liability because of the credits. A single person has a 90% exemption.

Deputy Ó Caoláin referred to the corporation tax commitment and reduction. It was the rainbow Government that made the commitment to the 12.5% rate but left the Fianna Fáil-Progressive Democrats Government to deliver on it with the EU. We must also be conscious of the international environment because reneging on a commitment to corporation tax rates would have appalling consequences in terms of uncertainty and a detrimental effect on foreign direct investment. I do care about employment, even if Deputy Ó Caoláin does not. Corporation tax reduction has been delivered on a phased basis and we are delivering our exemption on the minimum wage in exactly the same way. No one can doubt that the Government has delivered on personal tax reductions for everybody.

I very much care about the opportunities for employment for our citizenry. The Minister for Finance has no monopoly on that but I wonder if the bona fides of his claim would stand up to real scrutiny. I am concerned that the Minister for Finance indicated in his reply that this process will occur over the next five years. Is that the reply he would have offered in 2002 following the May general election or is it five years from now which goes beyond the term of this Government? Judging by the recent focus on the Government's past performance and some of its senior members, 2007 might be well beyond this Government's term.

The Minister did not claim on this occasion that it was this Government that introduced the minimum wage. This is important. However, it was introduced belatedly and it was only increased recently. The logic of all the signals that were given when the minimum wage was introduced is to follow through and ensure that all who are on or below it are taken out of the tax net. However, the Minister indicated in his reply that, although that is the cheapest, most affordable choice, he is prepared to do nothing because of A, B and C in terms of exemption limits and because he has provided for no further removal from the tax net of those on or below the minimum wage in his most recent budget and Finance Bill. He makes no allowances for further improvement in that area, but says that there will be an incremental exemption over the Government's term. It is an essential part of any overall real tax reform, and such reform is absolutely necessary. We need to get down to the nuts and bolts of real and substantive tax reform, but there is nothing to prevent the Minister from proceeding with exemption now. The proposal in amendment No. 3 is within the Minister's gift and can make a real difference to ordinary families that depend on the minimum wage. I urge him again to adopt it.

If the Minister's defence on the points that I made on taxation of the minimum wage is family income supplement, it is a poor defence because family income supplement has not been reformed since my time as Minister of State at the then Department of Social Welfare. It has been increased somewhat, but the take-up of it is extremely low. A number of other tax benefits are available to those on low incomes, for instance, tax relief on rent, but they too have a relatively low take-up. FIS is a particularly awkward benefit to deal with. I know that some lower-paid civil servants and public servants are able to avail themselves of FIS because there is a better structure to assist take-up in those areas of employment. However, in reality, many of those on lower incomes have difficulty accessing FIS and have enormous difficulty trying to understand it. It is also beyond many ordinary employers to understand FIS unless they employ accountants. That applies even to some of our larger shops in town centres. I have several times had to help relatively large employers negotiate the difficulties that are associated with FIS.

The Minister is not a reforming Minister when it comes to people on the lower end of the scale. His colleague, the Minister for Social and Family Affairs, Deputy Coughlan, is a disgrace. She allowed miserable cuts to be made in the lowest rates of social welfare.

The Deputy is going well outside the amendments.

Those cuts, together with the refusal of the Minister, Deputy McCreevy, to draw up his budget so as to benefit those on lower incomes and in work in Irish society mean that the budget is a bad deal for those on low incomes.

When I was Minister of State at the then Department of Social Welfare, I dealt with poverty issues and introduced provisions that allowed employers to employ people at the lower end of the scale. The Minister has not dealt with that and has not answered our questions.

The Deputy is well outside the two amendments before the House.

I am not.

I will put the question.

I wish to make a further point. As the mover of amendment No. 3, I point, as I did on Committee Stage, to the fact that the date on which I propose that the measure in amendment No. 3 should commence is 1 May 2004. I hope the Minister will mark that date appropriately as it is the accession day for ten new member states of the EU, of which Ireland currently has the Presidency. It is also international workers day and on behalf of the lowest-paid workers throughout the jurisdiction, I appeal to the Minister to acknowledge that he owes it to those workers, their dependants and their children to give them some help to get out of the poverty trap that is perpetuated generation after generation by the failure of successive Governments to offer a release. I urge the Minister to accept at this late stage the arguments before him and adopt amendment No. 3, which is worthy of support by every Member of this House.

Amendment put.
The Dáil divided: Tá, 49; Níl, 65.

  • Boyle, Dan.
  • Broughan, Thomas P.
  • Bruton, John.
  • Bruton, Richard.
  • Burton, Joan.
  • Connaughton, Paul.
  • Connolly, Paudge.
  • Coveney, Simon.
  • Crawford, Seymour.
  • Crowe, Seán.
  • Deenihan, Jimmy.
  • Durkan, Bernard J.
  • Enright, Olwyn.
  • Ferris, Martin.
  • Gilmore, Eamon.
  • Gormley, John.
  • Gregory, Tony.
  • Harkin, Marian.
  • Healy, Seamus.
  • Higgins, Joe.
  • Higgins, Michael D.
  • Howlin, Brendan.
  • Kehoe, Paul.
  • McCormack, Padraic.
  • McGrath, Finian.
  • McGrath, Paul.
  • McHugh, Paddy.
  • McManus, Liz.
  • Mitchell, Gay.
  • Mitchell, Olivia.
  • Morgan, Arthur.
  • Moynihan-Cronin, Breeda.
  • Naughten, Denis.
  • Neville, Dan.
  • Ó Caoláin, Caoimhghín.
  • O’Sullivan, Jan.
  • Pattison, Seamus.
  • Penrose, Willie.
  • Perry, John.
  • Quinn, Ruairi.
  • Rabbitte, Pat.
  • Ryan, Eamon.
  • Ryan, Seán.
  • Sargent, Trevor.
  • Sherlock, Joe.
  • Shortall, Róisín.
  • Timmins, Billy.
  • Twomey, Liam.
  • Upton, Mary.

Níl

  • Ahern, Michael.
  • Andrews, Barry.
  • Ardagh, Seán.
  • Brady, Johnny.
  • Browne, John.
  • Callanan, Joe.
  • Callely, Ivor.
  • Carey, Pat.
  • Carty, John.
  • Collins, Michael.
  • Cooper-Flynn, Beverley.
  • Coughlan, Mary.
  • Cregan, John.
  • Cullen, Martin.
  • Curran, John.
  • Davern, Noel.
  • Dempsey, Tony.
  • Dennehy, John.
  • Devins, Jimmy.
  • Ellis, John.
  • Fahey, Frank.
  • Finneran, Michael.
  • Fitzpatrick, Dermot.
  • Fox, Mildred.
  • Glennon, Jim.
  • Grealish, Noel.
  • Hanafin, Mary.
  • Harney, Mary.
  • Haughey, Seán.
  • Healy-Rae, Jackie.
  • Hoctor, Máire.
  • Jacob, Joe.
  • Keaveney, Cecilia.
  • Kelleher, Billy.
  • Kelly, Peter.
  • Kirk, Seamus.
  • McCreevy, Charlie.
  • McEllistrim, Thomas.
  • McGuinness, John.
  • Martin, Micheál.
  • Moloney, John.
  • Moynihan, Donal.
  • Moynihan, Michael.
  • Mulcahy, Michael.
  • Nolan, M.J.
  • Ó Fearghaíl, Seán.
  • O’Connor, Charlie.
  • O’Dea, Willie.
  • O’Donnell, Liz.
  • O’Donoghue, John.
  • O’Donovan, Denis.
  • O’Keeffe, Batt.
  • O’Malley, Fiona.
  • Parlon, Tom.
  • Power, Peter.
  • Power, Seán.
  • Ryan, Eoin.
  • Sexton, Mae.
  • Smith, Brendan.
  • Smith, Michael.
  • Wallace, Dan.
  • Wallace, Mary.
  • Walsh, Joe.
  • Woods, Michael.
  • Wright, G.V.
Tellers: Tá, Deputies Crowe and Durkan; Níl, Deputies Hanafin and Kelleher.
Amendment declared lost.

Amendments Nos. 4 and 18 are related and may be discussed together by agreement.

As the issues involved in amendment No. 4 have been dealt with in the discussion of the earlier amendments, I do not propose to move it.

Amendment No. 4 not moved.

I move amendment No. 5:

In page 7, between lines 20 and 21, to insert the following:

"2.—With effect from the end of 2004, and annually thereafter, the Revenue Commissioners shall lay before the Houses of the Oireachtas a Report detailing in respect of any relief, other than an amount however described which is excluded in the calculation of tax by a body corporate, partnership, or individual if calculating tax—

(a) an estimate of the number who availed of the relief and of the range of the value of benefit;

(b) an estimate of the total cost of the relief to the Exchequer on a geographical breakdown by tax districts; and

(c) a statement of the social and economic benefits of the relief.”.

The purpose of this amendment is to provide that the Revenue Commissioners lay before the Houses of the Oireachtas a report detailing in respect of any relief other than standard reliefs given to people in respect of their own personal or business position. There would be an annual statement to give an estimate of the number of people who availed of the relief, the range or the value of benefit to those who availed of the relief, an estimate of the cost of the relief to the Exchequer on a geographical breakdown by tax districts and a statement of the social and economic benefits of the relief.

As I stated both on Second and Committee Stages, we need to move forward with regard to the way in which we look at tax expenditures. The sum total of tax expenditures in the tax code comes to billions of euro. It is important that we have before us the sort of documented evidence to have a sensible and mature debate about it. Unfortunately, in the past, many reliefs have entered into our tax code which no doubt at the time they were brought in were seen to be beneficial but which have continued to remain in the tax code long beyond their useful life.

I know that the Minister has begun to erode some of those tax reliefs, especially some of the property-based ones which are difficult to defend at a time when the property sector and construction industry are booming like never before. Nonetheless, it is important that we put a legislative obligation on the Revenue Commissioners to provide the Oireachtas with the sort of information to allow us to decide, year on year, which allowances and reliefs are fulfilling their purpose and which are not. We can decide then to remove those which have ceased to fulfil their purpose.

The spending Estimates equally use taxpayer's money and we already at least have some element of information provided. There may not be enough proper evaluation by Departments of the value of their programmes. The Minister, with many on this side of the House, has expressed dismay that, in the area of health, we have succeeded in more than doubling the health expenditure yet strategic issues facing the health service, such as how to deal with the working time directive that will take the man years of 2,500 junior hospital doctors out of the hospital service, have not been addressed.

What is required is a change in the financial procedures, a more sensible presentation of information to the Oireachtas to allow a proper debate and a proper social and economic evaluation of the tax reliefs. The Minister has, by his own amendment, indicated that he is willing to commence a more systematic collection of the information. The Comptroller and Auditor General pointed out that, of 91 allowances in the code, only 48 had proper firm estimates of cost. The Minister's actions will begin to change this.

My amendment would certainly complement the Minister's move to collect more information. It would also move us to a position where the debate on the Finance Bill would not be solely the sort of debate which we have every year where we focus solely on a limited number of changes proposed by the Minister but rather where there would be an opportunity on a rolling basis to examine different elements of the tax code and the extent to which they continue to fulfil their usefulness.

Deputy Burton has sought the establishment of a tax commission and I have no problems with that proposal. However, the Oireachtas should consistently and regularly receive information so that we can make our own mature judgment on the value of different tax reliefs. Will the Minister accept this proposal as a positive reform of the way we approach tax business? I commend it to the House.

I support Deputy Bruton's amendment. This amendment is complementary to the Labour Party's amendment No. 27 which would require that tax returns be coded to include information which would allow the Revenue Commissioners and the Department of Finance to price the cost of tax expenditures. The Revenue's survey of the top 400 taxpayers shows that, while the Revenue is able to make guess estimates of the likely cost of certain tax breaks for the very wealthy, in some instances it is impossible to gauge the value of these tax breaks.

I am pleased that the Minister's amendment No. 77 to a significant extent accepts the Labour Party position on this. I have stated consistently since I was appointed finance spokesperson that, if we are to make rational economic decisions in budgets that do not excessively favour one group over another, we need the financial information on which to make rational decisions and to see what they cost in terms of expenditure and the cost of tax forgone. We need to know whom they help, what sectors they do not help and whether those expenditures and tax breaks should be continued indefinitely.

I am concerned that the Minister is setting up such an artificial tax break structure. I hope the sun is setting on the structure of tax evasion which has been the high-water mark of the tax system for the past 20 years and the key root cause of its unfairness. Unfortunately, the Minister is opening up a potentially even more lucrative tax breaks industry. It is difficult for the Opposition, the Comptroller and Auditor General and the Revenue Commissioners if the data are not collected and put before us at the time of the budget. Tax forgone is just as much a financial expenditure as money paid out for the health service. Tax forgone means that less money is available to pay for sectors such as the health service.

It is unlikely we will reach amendments Nos. 27 and 77, but I thank the Minister for introducing amendment No. 77 and I welcome it. I am aware that the members of the Institute of Chartered Accountants are concerned about the amendment to tax returns, but I believe we have a good computerised system. The self-assessment system is incredibly generous to the self-employed and a boon for accountants. The on-line filing of tax returns has worked very well.

Deputy Bruton's amendment, with amendment No. 27 tabled by the Labour Party to introduce the compilation of this information, and the Minister's amendment No. 77, are all of a piece. They are part of the maturation of our tax culture where lower taxes encourages everyone to pay their fair share and for the education and health systems and other desirables. I support Deputy Bruton's amendment and welcome the concessions made by the Minister on Report Stage.

I support Deputy Bruton's amendment. It would be valuable to have this information available on a regular basis to identify whether the tax reliefs that have been provided have an economic and social benefit. Many of them are of questionable value and have been debated in this House. This Finance Bill seeks to extend unnaturally many of those same reliefs. It may also give access to information that perhaps the Minister and the Department do not wish us to know, such as the extent of small-scale reliefs that are not being availed of and the potential costs that could arise if they were to have the greater take-up that their potential allows them. I have in mind the relief in respect of service charges or the relief in terms of donations to charitable organisations. The likelihood is that many these smaller-scale reliefs, which are three figure sums, have a minuscule take-up but, if taken up to the extent that the practice happens within the economy, might bring about a far greater expense to the State that is not being properly monitored or measured at present. Deputy Bruton's amendment would play a particular role.

On a related matter, we have argued about the extension of the particular reliefs in this and other Finance Bills. It is unfortunate that some of the subsequent amendments seek to extend the period in which many of these reliefs become eligible to the end of this calendar year. This is an exercise in opening up the floodgates to reliefs that have already had their day and have wreaked their damage in an environmental, social and economic sense. I support Deputy Bruton's amendment and hope the Minister sees the value of such information being available for the benefit of Members and taxpayers in general.

I support Deputy Bruton's amendment No. 5 and acknowledge the Minister's amendment No. 77. As I said on Committee Stage, while the Minister is bringing in this amendment to give a breakdown under the various categories, nevertheless, its effect will not be seen until the coming year and yet he has already provided for the extension of many reliefs up to and including 2006. He did so, as I pointed out on Committee Stage, without any cost-benefit analysis, appraisal or even knowledge of the cost to the Exchequer or the benefit to those who proposed to develop their private hospitals, sports clinics, hotels, holiday camps, holiday cottages, multi-storey car parks and other such developments.

While we all want to see these developments, in terms of the priority needs of society, there is a lack of investment in real terms in health. I make no apology for referring again to health. The Minister will say more money is being invested in health than at any time previously. That is true. However, fundamental reforms are necessary to ensure real value for money and an equitable health care delivery system. That has not yet happened.

In line with the questions I put to the Minister last month, to which I referred on Committee Stage, I support Deputy Bruton's amendment. I am surprised he used the word "estimate" in paragraphs (a) and (b) of his amendment because I had hoped the Revenue Commissioners would have given us more than that. Given the extent of its presumed computerisation, we should have been able to expect delivery of information on the numbers who would have availed of these reliefs and the range of the value of benefit. Information on the geographical location of those who are beneficiaries should be readily available through the Revenue Commissioners’ system.

Reporting to the Dáil is important. The detail and information required in terms of the social and economic benefits of the relief is what I sought in my questions to the Minister last month. He acknowledged that neither he, the Department nor the Revenue Commissioners had any idea of the cost of these reliefs or their net benefit, if any, to society. I hope he will recognise that amendment No. 77 does not answer all the needs highlighted in that series of questions and that amendment No. 5 offers a formula by which we can see real and substantive detail presented not only to the Minister but to the Houses of the Oireachtas with open access to all Members, as it should be.

This amendment proposes to insert a new section 2. The purpose of the new section is to require the Revenue Commissioners to make an annual report to the Houses of the Oireachtas giving, in respect of each tax relief, apart from tax reliefs deducted by persons in calculating their income for tax purposes, details of the numbers who avail of each tax relief, the range of value of the benefit to those availing of each relief, the cost of the relief to the Exchequer on a geographical breakdown by tax districts, and a statement of the social and economic benefits of the relief.

The Revenue Commissioners already publish an annual statistical report which includes some information on the cost of tax reliefs. Copies of this report are sent to the Oireachtas Library. Table IT6 of the Revenue's annual statistical report gives the cost of tax allowances and reliefs. This table does not give any figure for either the numbers availing of particular reliefs, geographical breakdown or the range of the value of the benefit.

On the matters the Deputy's amendment seeks to be included in a report, I am informed by the Revenue Commissioners regarding the numbers availing of a particular relief that, to the extent that information is available in respect of particular reliefs, they will examine positively the possibility of including such details in future statistical reports. Regarding details of the range of the value of benefit for each relief, while such a level of detail may be difficult to achieve in many instances, the Revenue Commissioners are prepared to look at what may be achievable in this area.

In this regard, the measures I am taking in section 86 to require taxpayers to include additional information on tax returns in respect of certain specified reliefs should enhance the range and detail of the information available to the Revenue Commissioners. This, in turn, should allow them to consider ways in which they can increase the amount of detail on tax reliefs to be reported in their statistical report.

Regarding a geographical breakdown by tax district, I do not believe it would be a good use of resources to create a statutory compulsion to have a case by case procurement of statistics on the numbers availing of reliefs and exemptions broken down by geographical area. The cost and resources expended in assembling this information for every relief and exemption would be disproportionate to the value of the information obtained from such an exercise. We need to consider the appropriateness of the information to be gathered in the various cases.

Regarding the provision of a statement by the Revenue Commissioners as to the social and economic benefits of each tax relief covered by the report, I do not think they are equipped or qualified to make any such judgment. The role of the Revenue Commissioners is to collect fairly and impartially the taxes and duties imposed by the Oireachtas and to administer the tax code by providing the best possible service to the compliant taxpayer and pursuing all forms of tax evasion. The assessment of the policy implications of fiscal matters generally is a matter for my Department and, ultimately, the Government.

Regarding the collection of information tax expenditures, I have had concerns for some time about the need for better data. This issue has been discussed between my Department and the Office of the Revenue Commissioners for several years as well as on more than one occasion by the tax strategy group. In addition, the Comptroller and Auditor General wrote to my Department and the Office of the Revenue Commissioners about this matter, partially in the light of the work already under way. Following preliminary exploratory work, a senior level group, chaired by an assistant secretary in my Department, convened last year to discuss the practicalities of data captured via the tax return forms. Following this, I introduced a Committee Stage amendment to give effect to certain changes in the penalties and surcharge regime. This was necessary to enable the requirement to include the specified information on the returns. In the interim, having listened to concerns expressed on Committee Stage by Deputy Bruton and taken soundings from the tax practitioners, I am including, in amendment No. 86, a legislative clarification to ensure that penalties and surcharges will not apply in cases of genuine error.

Deputy Boyle raised the issue of the extension of the planning deadline in a later amendment. These changes respond to a request on Committee Stage in the form of a Fine Gael amendment. When I suggested a solution, as set out in the amendment, none of the Opposition spokespersons present objected. Accordingly, I tabled it for Report Stage.

I welcome the Minister's positive attitude towards getting better data capture. I acknowledge the move between the Comptroller and Auditor General, his Department and the Revenue Commissioners to begin to get a handle on these issues. Where I part company with him is on the belief that this is essentially a matter between the various voices of Government, albeit that the Comptroller and Auditor General is there also. This is inherently the property of the Oireachtas. While I have faith in the Minister's officials to explore these issues and put value on economic costs and benefits, from experience I do not see that his Department has that type of grasp on many of these reliefs. If the Minister were to accept my amendment, I would be happy to drop the phrase "on a geographical breakdown by tax districts" to accommodate his concern and to amend paragraph (c) to read “the statement of the social and economic benefits would be provided by the Department of Finance in consultation with the Revenue Commissioners”.

We will shortly be able to see more relevant statistics on this matter as a result of the changes I brought forward with this Bill and further work carried out by the Revenue Commissioners. I disagree with Deputy Bruton in that it is the job of the Government and Minister of the day to decide on the appropriateness or otherwise of a particular relief or incentive, and to make decisions on that basis. That is the democratic process.

I do not dispute that. The issue is one of equality of access to information for those who must decide whether a proposal made by Government should be accepted by the House. While, obviously, the Government makes decisions and the Oireachtas ratifies or fails to ratify them, the Oireachtas should do so on the basis of proper judgment, having been party to information which should not be solely confined to Ministers.

I suggest an amendment to amendment No. 5 by dropping the phrase in subsection (b), “on a geographical breakdown by tax districts”, and enlarging subsection (c) to read “a statement of the social and economic benefits of the relief provided by the Department of Finance in consultation with the Revenue Commissioners”. I seek the provision of information not to usurp the Government’s right to make decisions.

We will have the information in a better form in years to come as a result of the changes I have made. I am not prepared to accept the amendment.

If the Minister accepts my amendment, we can be sure of having that information. It would be worthwhile for both sides of the House.

Is the amendment being pressed?

In the amended form. I ask the Minister to accept it but, if necessary, I will press the amendment.

I am not accepting the amendment.

Amendment put and declared lost.

I move amendment No. 6:

In page 7, between lines 28 and 29, to insert the following:

"(2) Section 472 of the Principal Act is amended in subsection (4)—

(a) by inserting ‘or proves that he or she is a home-carer’ after ‘purposes referred to in that section’,

(b) by inserting the following paragraph after paragraph (b):

‘(c) in the case of a home-carer, a credit of the amount referred to in paragraph (a) will be provided against the income of the employed spouse.’.”.

The amendment seeks to introduce a provision whereby the value of the home carer's allowance would be linked to the PAYE allowance. The home carer's allowance was introduced by the Minister when he introduced his proposals on individualisation. There was a widespread belief on the Government backbenches as well as elsewhere in the House that we needed to acknowledge those who chose to stay at home, and that the home carer's allowance was an appropriate way of doing so. In the intervening period, although the benefits of individualisation have been substantially increased and run now to several thousand euro for those on top pay, there has been no effort to increase the home carer's benefit.

We need to encourage home caring in the community and to encourage people to look after their dependents, whether young or elderly. Moreover, we need to begin to recognise that caring is genuine work and, just as we acknowledge employment through the PAYE allowance, should acknowledge that carers, under the terms of the home carer's provision, are gainfully employed. This would be a useful step forward. It would also ensure that, as the Minister focuses tax relief on the PAYE allowance, as he has done, this was not solely of benefit of those opting to work outside the home. Those who work within the home would also have an opportunity to gain recognition.

While the Minster is keen on the individualisation process, public policy also demands that we are conscious of the importance of family caring as part of the society we want to produce. Individualisation fuels the economic engine more effectively than previously but we must be conscious that society is more than just jobs and wealth creation. It is also about creating sound social circumstances in which people and families can take on the various duties which present themselves throughout the life cycle.

I hope the Minister will accept the amendment as a way in which we would at least ensure that home carers get a regular increase, as occurred this year in regard to the PAYE allowance, and that it was linked to an allowance that recognised the reality of work in the home in the same way the PAYE allowance recognises earning a living in paid employment.

I have spoken about the flawed architecture of the Minister's budget and how unfair it is. Some people are winners due to getting additional tax concessions, some very valuable, whereas others are losers and treated relatively harshly by the budget and the tax system. The Minister has now designed seven successive budgets. Two matters absent from this budget were policies in regard to families and children. As it was international women's day some days ago, it struck me that one of the things which should be important to the Minister, following his weekend jamboree in the Citywest hotel, was that the reality for many families was that both parents were anxious to continue work as they had to pay a mortgage. This is particularly the case for families with three or more children. However, while parents with two children might just about manage child care and crèche costs, it is impossible for those with three children because the cost is greater than a second mortgage.

While the home carer's allowance is not the solution to the problem, the Minister referred to the Revenue Commissioners report on what he described as higher income earners — individuals and couples who have an income of more than €150,000. For many such couples with three children or more, one party, normally the woman, is increasingly stepping out of work or taking part-time work because crèche, child care and after-school minding costs are so incredibly high. While I do not support the detail of the amendment, I sympathise with the financial and political objectives behind it.

As a society, we must support families with children and, in particular, parents anxious to be actively involved in bringing up their children and in their children's community. Unfortunately, the Minister's budgets are not making this possible. They and the general policy towards house prices are driving up costs which are a must for most families in order to put a roof over their heads. The Minister's policies are also sending people out to Kinnegad and elsewhere, forcing them to make long journeys, which are expensive, and to pay child care costs which are more than the cost of a second mortgage. In the context of the next budget, fairness to different people within the tax code is a critical political issue. I support Deputy Bruton's raising of these issues in his amendment, although I do not agree with all elements.

I support the thrust of the amendment. We must recognise that there is a lack of recognition of the great work done by home carers, of which we all have experience. Many from my generation know more about that reality, in terms of the ongoing unfolding of each day in our younger years compared to the situation for many today, because of the ever-changing patterns of work, financial need and the demands being placed on families.

There is a real lack of appreciation of the important roles played by home carers. They occupy multiple roles, not least in nurturing young children who will be part of the education system and, ultimately, our workforce and future. It is important to have acknowledgement, recognition and appreciation built into legislation which can have a direct, positive impact on the role of home carers. It is a very important area and while this amendment does not go as far as I would wish regarding the important role of home carers, it is nevertheless another element in an overall package of recognition and acknowledgement. I commend the amendment to the Minister and support the arguments already presented.

This amendment proposes changing section 472 of the Taxes Consolidation Act 1997 to extend the employee or PAYE tax credit to home carers, with the credit to be given to the working spouse. Under section 466A of the Taxes Consolidation Act 1997, the home carer's tax credit is granted to married couples where one spouse stays in the home to care for a dependent person. The Deputy tabled an amendment which proposed increasing the amount of the home carer's tax credit to an amount equal to the maximum of the employee tax credit. This would have raised the home carer's tax credit from €770 to €1,040, which is an increase of €270 per annum. It would have cost approximately €23 million in 2004 and €33 million in a full year.

It now appears the Deputy proposes to extend the scope of the employee tax credit by making it available to a group to which it does not apply at present — home carers. While not defined, presumably the home carers in question are those currently within the ambit of section 466A. To extend the employee tax credit in the manner proposed would be a departure from the essential purpose of the credit, which takes account of the position of employees compared to the self-employed. To extend the availability of the employee tax credit in this way would cost some €82 million in 2004 and €118 million in a full year.

As I indicated in my Budget Statement last December and as I repeated on Committee Stage, the resources available for tax deduction this year are limited. Accordingly, I made limited changes in the area of personal taxation and those will cost an estimated €297 million in a full year. The increase I made in the employee tax credit was to ensure that tax is not payable on 90% of the minimum wage and over 39,000 persons were removed from the tax net.

Apart from this and the increase in the income tax exemption limits for those aged 65 years and over, there were no increases in the generality of personal tax credits nor in the standard rate band. The budgetary position would not have allowed it. Therefore, I am not in a position to accept the amendment.

I thank my colleagues for their support for the principle of this amendment and accept it is not properly drafted. However, it is important that more attention is paid in public debate to the needs of families, particularly when it comes to many aspects of our tax and welfare codes. Put bluntly, we have repeatedly overlooked the needs of children. As Deputy Burton said, we have no relief for child care, we have no proper system for developing child care and the system in the Department of Justice, Equality and Law Reform is extremely patchy. We are far behind many other countries and when we look at countries like France we see they are struggling because of declining birth rates. Our economic dynamism in recent years is largely due to the dynamic population demographic we have enjoyed. It is right and proper that the State should support good environments in which children are reared, but we are failing to do so.

The Minister has been far-sighted in providing for pensions. He has taken a vow to do something in that area but if he wants to know what the upcoming challenges are, they are clearly related to caring for children and the elderly. We need to make changes in many areas. Many of the means tests for the most basic schemes disregard the costs of having a second person in the home; means testers are very strict on what one might call traditional families, where a couple is together.

We also have an extraordinary feature in our tax code whereby if a couple separates their tax allowance doubles. That is a very unusual provision which is hard to square with the pro-family policies we like to advocate.

I do not propose to press the amendment as the Minister is correct in saying it is not properly framed. However, there are important issues involved here which the Minister, his officials and officials from other Departments need to address or we will rue the day we failed those who are trying to be responsible and do the right thing in rearing children. It is important to have that debate and it is particularly important the Minister for Finance participates in it, rather than leaving the matter to other Departments.

Amendment, by leave, withdrawn.

I move amendment No. 7:

In page 7, after line 30, to insert the following:

"4.—From a date prescribed by the Minister, the exemption limit for income tax shall be increased to a level equal to the hourly rate of the minimum wage for the time being multiplied by 40 multiplied by 52.".

I have already spoken on this amendment. It is not necessary to repeat the debate.

I oppose the amendment.

Amendment put and declared lost.

I move amendment No. 8

In page 7, after line 30, to insert the following:

"4.—(1) Chapter 1 of Part 15 of the Principal Act is amended by inserting the following section after section 480A:

‘480B.—(1) In this section—

"the Act of 1999" means the Irish Sports Council Act 1999;

"amateur sportsperson" means a sportsperson that receives no salaries, fees, wages, bonuses or perquisites as a direct consequence of their participation in an approved sport;

"approved sport" means a sport specified in Appendix 23B;

"the Council" means the Irish Sports Council;

"carded athlete" means an athlete in receipt of funding through the Council carding scheme in the relevant year;

"doping in sport" has the same meaning as set out in section 2 of the Act of 1999;

"high performance amateur sportsperson" means an amateur sportsperson properly affiliated with one of the sports bodies specified in Appendix 23B, that competes at a level that is subject to any measures taken by the Council, in fulfilling its obligations under section 6(1)(d) of the Act of 1999, to combat doping in sport;

"qualifying sportsperson" means a high performance amateur sportsperson that meets the criteria set down by the Council in conjunction with each sports body and not registered with the Council as a carded athlete;

"the sports body" means the relevant body that governs the conduct of each approved sport.

(2) Notwithstanding any other provision of the Income Tax Acts, this section applies where in the year of assessment 2004 or any subsequent year of assessment an amateur sportsperson who is resident in the State for that year of assessment proves to the satisfaction of the Revenue Commissioners that he or she has in that year of assessment been a qualifying sportsperson.

(3) Where this section applies, a qualifying sportsperson shall, on the making of a claim in accordance with subsection (6), be entitled to a tax credit (to be known as the "qualifying sportsperson tax credit" of €2000).

(4) Relief from income tax under this section shall in all cases be given by means of a tax credit.

(5) Where any relief has been given to a qualifying sportsperson under this section and he or she is not entitled to that relief, as the case may be, that relief shall be withdrawn by whatever means is deemed appropriate by the Revenue Commissioners (including an adjustment to that person's tax credits or the making of an assessment to income tax under Case IV of Schedule D for the year of assessment for which that relief was given).

(6) Any claim for relief under this section—

(a) shall be made in such form as the Revenue Commissioners may from time to time provide, and

(b) shall contain such information and be accompanied by such statement in writing as may be indicated in the said form as the Revenue Commissioners may reasonably require for the purposes of this section.

(7) If a qualifying sportsperson qualifies for the relief under subsection (3) in relation to more than one approved sport, either at the same time or at different times in a year of assessment, he or she shall be treated, for the purpose of the relief under this section, as if he or she qualifies for that relief in respect of one approved sport only in that year of assessment.'.".

There was an extensive debate on this amendment on Committee Stage. The motivation behind it comes from the special concession given by the Minister in 2002 to professional athletes. Elite amateur athletes were ignored, which was unfair. The concession discriminated against people who are professional in every way but who are not paid for their efforts. This amendment would include GAA players but would also include those involved in boxing, sailing, canoeing and a range of other sports. It would mean that those elite athletes would be granted a tax credit of €2,000, which, over a year, would cost the Exchequer approximately €12 million.

There are 6,000 athletes on the drug testing system operated by the Irish Sports Council, which means the athletes who would benefit are ring-fenced; those currently on the drug testing programme would qualify. Half of those athletes would be inter-county Gaelic footballers or hurlers. The Gaelic Players Association had a professional body draw up an actuary's report which quantified a players' loss of wages, in missing out on overtime opportunities and so on, as representing anything from €100,000 to €150,000 in loss of earnings over the normal lifetime of a sportsperson. That is a considerable loss to an individual starting off in his professional career, who may be married or getting married and who would probably take out a loan to buy a car and a mortgage to buy a house. While trying to do all these things that everybody else can do, he is also providing entertainment for the public.

We know of the millions of people who watch Gaelic games each year and of the amount of funding they generate for Revenue through various taxes. They provide revenue for many towns all year round. These players are contributing to that and, in most cases, everybody benefits but the players. The people who provide hospitality, transport, insurance or whatever benefit but those who perform and who generate this interest and wealth receive little compensation as a result.

I know from personal experience of the loss of time and earnings. People accept it because they love the game and want to play it. They have pride in their village and county but that only goes so far. If people are going to lose out considerably, both materially and financially, some time during their sporting career — perhaps half way through — they will decide they cannot afford to continue, especially players playing on county teams who are not successful. They train and put in the same effort as successful athletes in counties which win and athletes in other sports but they do not achieve the success and they lose money. This amendment would compensate these performers and encourage them to keep playing.

There will be more competition for players from all sports. People who are athletic and who can play and handle a football will be much sought after by rugby. As the Minister knows, the Australian rules people are seriously considering taking more Irish people over to Australia. Those who have gone in recent years have been successful. There will be a big demand for Gaelic players and for people who can handle a football. If they are compensated in other sports, but not in Gaelic football, Gaelic football may lose them. It is on that ground that I tabled this amendment.

I realise a number of Members are anxious to address this matter. Today, more than 80 Deputies went to Buswell's Hotel to a briefing session organised by the Gaelic Players Association. The Deputies were from all political parties and I will not question their bona fides. Deputies were most enthusiastic about supporting this amendment, including members of the Minister's party who had connections with the GAA in the past.

They will be tested in a few minutes. We will test their loyalty.

I have never seen a measure receive such universal support in this House. I have been at several lobbies organised by various organisations in Buswell's Hotel but I have never seen a lobby get so much support as I did today. That speaks for itself.

I brought the Minister's attention to the arts. Artists in this country, whether international, national or local, are exempt from tax. That has encouraged numerous artists in various art forms, whether literature or performing or visual arts, to stay at home. I am sure more of our writers would have left but for this incentive. That measure costs the Exchequer approximately €37 million. These elite amateur performers make as much of a contribution to the Exchequer and to this society as artists who make a worthwhile and positive contribution to the wealth of this country.

I look forward to hearing the Minister's response. I tabled this amendment in good faith. The Minister is, and always has been, a strong supporter of Gaelic games, and I appeal to him to look at this proposal rationally. It is a tightly structured proposal, it is not what the Minister might call a "daft" proposal. It was structured by the GPA on the professional advice of experts, and that is why I intend to push this amendment. I appeal to the Minister to accept it because of the effect it will have. The people across the sporting spectrum, whom this amendment represents, deserve this recognition and treatment.

I support the amendment. Unlike Deputy Deenihan, I have never played sport at an elite level but I am a keen follower of all sports. Looking at the development of sport, I see chronic commercialisation taking over in the sporting area. Like the tallest pines, this commercialisation tends to kill everything underneath. There is a genuine crisis in many sports about how to maintain the amateur participative ethos in a more commercial world.

There is public interest in promoting a measure which would support amateur organisations and sportspeople remaining amateur even at high levels of performance. The Minister may say this is a matter for the GAA or for the organisations in these different fields but I do not believe that is the case. These organisations should not be forced down the professional road where they see their future in an amateur ethos. There is an important public interest that we should seek to support the retention of an amateur ethos in sport to the maximum extent possible. I have seen it in clubs with which I have been associated where the professional upper echelon of the club has almost brought the voluntary school boy dimension of the club to its knees. If we allow commercialisation to continue to take hold in more areas of sport, there is a real risk that we will damage sport, which is the crucial element of this society. Deputy Deenihan and those who worked on this proposal deserve credit for bringing it forward.

There is considerable debate at present about Croke Park and I will not try to tell the GAA how to make decisions, although I am a member and perhaps I will be consulted. However, the huge asset of Croke Park has been built through the enormous contribution of amateur sportspeople who have played so many games to such high standards over many years. There is a certain irony in the fact that we have a tremendous monument to the success of sport in this country, but those who helped to create it do not receive any proper recognition. This is an opportunity for us to give them some recognition by starting to ease the pressures on amateur players who are trying to perform to the highest standards. They should be given an opportunity to avoid taking the commercial route, while continuing to play their sports as amateurs.

When I spoke on a number of occasions during the budget debate, I outlined the Labour Party's budgetary theme of fairness and how, in many respects, the Minister had not been fair to different sectors in society, including families with children. The element that strikes one as being distinctly unfair, however, is what has happened with regard to different types of sports people. From a fiscal viewpoint, the Minister has chosen to make a clear distinction between two different types of sports people: one is the professional sports person who often earns large amounts of money, while the other is an amateur sports person who makes significant personal sacrifices in time, income and family commitments. What does the Minister do? He chooses to create tax breaks for the professional sports people, some of whom are very high earners. He does nothing to assist amateur sports persons, however, who, like many others in society, are under significant additional pressure when purchasing a house, looking after the family and keeping their jobs and career prospects afloat during their best sporting years. The Gaelic Players Association has put forward a considered and reasoned argument as to why they, alongside professional sports people, are deserving of the Minister's consideration through some sort of tax break or direct supplement.

The Minister seems to have consciously allowed the players to be misled into believing that some form of assistance was on its way. The Gaelic Players Association made the Minister a welcome guest at its annual general meeting. On Committee Stage, the Minister indicated that he was happy to attend the GPA annual meeting to break bread, or perhaps break ball, with the players——

Break wind.

——while having various discussions and leaving them with the clear impression that he was minded to mark their contribution to amateur sports. These people are not fools, however. Subsequently, in recent weeks, a number of the Minister's party colleagues led a deputation of players to the Department of Finance where not only did they get tea an biscuits but sympathy also. Who can blame the players for feeling that the Minister was so minded, having done what he did for professional sports people earning far more money than those who play inter-county Gaelic football? The Minister led the players to believe that Fianna Fáil would see them right. However, some "Mr. No" in the Department of Finance appears to have met them also and said that because of flaws, including a possible leakage in the scheme to others seeking tax relief, such relief was off the table. No alternative has been put forward by the Minister. I can understand the players being enraged because they have been treated in an extremely shabby way. They were led to believe the Minister was giving serious consideration to the points they had made. Having received good advice from accountancy firms, the players did their figures and came up with an actuarial cost of somewhere between €100,000 and €150,000 for the loss of earnings for GAA players at top level, who are fully committed to training, travelling and playing. Such players provide enjoyment to hundreds of thousands of people across the country every year.

I am disappointed by the Minister who has shown ingenuity on tax breaks for private sports injury clinics. Many GAA county boards are struggling to survive financially. If inter-county players fall ill or are injured and have to attend a private sports injury clinic, they will be delighted to know that the Minister has looked after the builder of the clinic from a tax viewpoint. He has not done anything to help GAA players, however, who will swell the coffers of sports injury clinics that are already in receipt of tax breaks. It is ironic that the Bill extends relief for the construction of private sports injury clinics and private hospitals. The legislation makes it easier for investors to take advantage of that relief because the measures the Minister introduced last year were not generous enough for builders.

The Minister has led the Gaelic Players Association up the garden path. Despite all the back slapping at the GPA's annual general meeting and the invitation to tea at the Department of Finance, the Minister has said, "Sorry lads, we can't do anything for you at all." That is not good enough. The Labour Party thinks the Department of Finance should examine the proposals from the Gaelic Players Association and other amateur sports codes. The Minister may argue that from a taxation point of view the situation is not perfect. The drafting of tax legislation is difficult but we can all understand what lies behind the GPA's proposal. The Labour Party supports the spirit of the proposal. We do not mind if the Minister puts forward an alternative proposal whereby this matter can be worked out, as long as it achieves the same end and will not damage other areas of the tax code. We do not have a problem if the Minister has an anti-avoidance difficulty with the proposal and, thus, wants to design it in such a way that it is confined.

In drawing up the proposal, the players have tried to ring-fence it by confining it to those who are subject to the drug-testing regime, while also confining it to the scheme identified by the Irish Olympic Council and the Sports Council for what are termed "elite amateur sports people", and who carry that card. The players have done their homework on those aspects. The Labour Party urges the Minister to identify ways and means in which he can deliver on the kind of promises that were intimated by him when attending the GPA's annual meeting, as well as by a number of his colleagues.

I did not know whether to laugh or cry today when I met some of the players who were lobbying politicians. There were members of the Minister's party in serious danger of injuring themselves in the rush to be photographed with the illustrious members of the GPA, who took the day off to visit Leinster House.

One of them is on the radio at the moment.

One of the Minister's colleagues had a hurley. I hope she is present for the vote later. I also hope the hurley was not meant to threaten the Minister if he turned down the players' reasonable request. She had a hurley, another Member had a sliothar while yet another was photographed with a football. Following last weekend's jamboree, the Taoiseach wanted party members to beat everybody else to the photo opportunity. There is hypocrisy and hypocrisy. I acknowledge I do not know remotely as much as the Minister about sport but, nonetheless, I recognise the justice in this cause and ask him to devise a system for players.

I refer to tax breaks applied to professional sports people. The tax break introduced two years ago for such persons allows them to knock 40% off their earnings when they retire and claim relief for a ten-year period. Deputy Penrose says it is not unusual for professional sports people to earn at least €100,000 directly from their sports. The marginal tax rate is applied on a sum of €40,000 per year for ten years, which equates to tax relief of €168,000. Top golfers and jockeys earns much more than this. It is reasonable to assume their earnings might be €200,000 a year during their best years. Therefore, the Minister is giving them a tax break worth €336,000. This is not peanuts. If the relief sought by the GPA was applied to its members over an equivalent period, it would amount to €20,000 compared with sums of €168,000 and €336,000. The highest paid sports people will earn much more than this in relief.

It is estimated by the Revenue Commissioners the artist's exemption cost €37 million last year. A young female author received a great deal of publicity recently. She was interviewed on many radio programmes and I listened to her with interest. She is an author of so-called "chick lit", popular with my daughter and many others. Good luck to her but she did not deny she had received €1 million under contracts for her first book. The artist's exemption is worth €420,000 to her and ongoing royalties will be exempt at the 42% rate through the years. What is the difference between the pleasure she provides for those who read "chick lit" books on the bus, DART or holidays and that provided by GAA players in major hurling and football games? The Minister has given them nothing but the young woman who is satisfying a market for certain literature is the subject of incredible largesse on his part.

I recently read an article on the dispute between Mr. Ferguson and Mr. Magnier which has been happily settled. A nomination for Rock of Gibraltar costs €120,000. If that stallion or others generate ten nominations per year, the tax break is worth €500,000 to the owner. I ask the Minister to compare his generosity to the "chick lit" author, top golfers and jockeys and stallion owners to his failure to provide for amateur sports people. I am surprised at Fianna Fáil not having the ingenuity or wit to examine the case made by the GPA and not recognising that people who provide so much for our communities through amateur sports should deserve similar consideration. I accept the amendment may not be perfect for tax purposes but the Labour Party and the rest of the Opposition is prepared to work with him on it. I commend Deputy Deenihan's amendment.

The amendment introduced to benefit high performance professional sports people has resulted in the Minister being hoisted on his own petard. I accept it was introduced for the best reasons. Perhaps it was thought to be the sporting equivalent of Charles Haughey's artist's exemption when he was Minister for Finance and it would add to the social and cultural cachet of the nation. However, serious questions need to be asked about how the proposal was drafted and implemented. The logic that sporting careers comprise a short period of an athlete's life is sound on the surface but it does not hold true for golfers and jockeys. Golf careers are long and, even when golfers finish on major tours, they can graduate to seniors tours, which are lucrative. Many Irish golfers earn significant sums participating in such tours.

Similarly, while there are risks in terms of injury and death, jockeys such as Pat Eddery and Lester Piggott have enjoyed long careers, although Lester Piggott is probably not the best example in terms of tax reliefs. They were at the top of their profession for 30 to 35 years. In addition, many top sports people progress from participation to administration, training and management in their respective sports. This tax relief is open to abuse.

Can individuals who declare for Ireland in various sports avail of the tax relief? A grand parentage rule is in place for soccer internationals for instance and recently the highly skilled golfer, Mark McNulty, who had political difficulties in his native Zimbabwe, changed citizenship from there to Ireland and is designated as Irish for world golf tournaments. Can he avail of the professional sports tax relief? That is a potential abuse.

That does not apply to him. One must be tax resident in Ireland. The relief relates to those who pay tax in Ireland. It is to do with paying tax in Ireland, not where one represents.

I am not sure where he is resident. He may have residency status.

It will not do any good. He was not tax resident for the past ten years because he did not pay tax during that time.

Given that Ireland has the greatest golf course network in the world, it should be a good place for a golfer to establish residency.

The amendment relates to the treatment of high performance professional sports people as opposed to amateur sports people who are no less committed in terms of their performance than those who get paid for their performance. This inequity in the tax system has to be addressed. I question whether tax relief for professional sports people should continue but in spite of this, the contribution of amateur sports people to the cultural life of the country should be recognised in the tax code in the ways proposed in the amendment. This has to be done for a number of reasons. First, GAA sports people are totally amateur. Second, sports involving women are, in the main, amateur rather than professional. The tax code has a discriminatory effect on female more than male sports people.

It is a fact of life. It tends to be the media, television companies and so on which decide which sports are well paid. The proportionate number of women involved in highly paid sporting activity is far less than the number of men. We need to recognise this. As regards amateur sport——

We are always looking for players in Kildare. If there are any women who are willing to play for us, we will take them also.

The Minister may have to put that to the GAA council first.

Perhaps Cora Staunton——

The Minister makes an interesting point because we met the lobby from the Gaelic Players Association today. This is equally applicable to the sport of camogie. The all-Ireland final between Tipperary and Cork which went the wrong way was a highly skilled and enjoyable occasion. The commitment of young women to the sport, in time, income forgone and commitments to family and other aspects of life, needs to be recognised in some way.

There are sports which have both a professional and amateur element. For example, basketball is largely amateur but most teams which take part in the national league have one or two professional players, largely brought in from outside the country but who are resident for long periods. There may be a situation on a team where some players are benefiting from tax relief while others are not being recognised by the tax code. There are sports where participants are paid a minuscule sum which makes the effect of any tax relief irrelevant, for example, League of Ireland division one football where players are paid minimum wages for the joy of playing in the sport, yet with some financial recognition for participating at the same time.

All of these issues are evident — the difference between men and women in professional sport; the existence of sports with both a professional and amateur level within the same team; and the stipend to cover the cost of being involved in the sport, that otherwise has a near voluntary ethos. The Minister is helping to perpetuate an inequity as to how different sports people are being recognised and rewarded through our tax system.

I am fully supportive of the amendment proposed by Deputies Deenihan and Bruton and believe many who should be behind the Minister are similarly inclined and if tempted to face the ravages of their Whip, would vote accordingly when we decide on the amendment later in the day.

I record my support and that of my colleague, Deputy Ferris, our spokesperson on sport, and all Sinn Féin Members for the text of the amendment presented by the Gaelic Players Association and tabled by Deputies Deenihan and Bruton. It highlights an anomaly in tax law, to which Deputy Boyle alluded. Tax allowances are provided for professional sports people but not for amateurs of any sport at any level.

The Sinn Féin Party is prepared to support the amendment as an interim measure because we believe the amateur-professional anomaly needs to be addressed. The major contribution to Irish life made by people involved in high performance amateur sport must be recognised. This would obviously include our inter-county Gaelic sports players, both football and hurling. Coming from County Monaghan, it would also include those who are and have given us great joy on the sports field in inter-county women's GAA which has proven to be very popular in many counties and growing in strength throughout the land.

It has to be emphasised that sacrifices are made year after year in order to strive to the highest possible standards and the highest levels of achievement by those whom we love to cheer on both in domestic games and international competition. These sacrifices deserve recognition in real terms. It is our view that the amendment offers real recognition, something we want to see implemented.

I will give the Minister a moment before I continue — it would be very appropriate if the amendment was adopted in this the year of the Olympic Games which will be held in Greece. Many Irish amateur sports people will make significant personal sacrifices to represent the country and various sports organisations at the highest level internationally. Many of them, particularly those representing a number of the less well supported sports efforts, have few resources by comparison with their international competitors. It would be very appropriate in this year to recognise them as the amendment seeks.

The GPA is the amendment's author and sponsor. It is clearly designed to recognise those playing at the highest level in all codes and disciplines in sport. This is very important. I commend the effort of those behind the proposition. Let us be under no doubt that our Olympic sports representatives going to compete in Greece are deserving of the best support and encouragement, not only the cheers in front of the television or the preserve of the well-off, to attend the competitions.

We support the measure pending thorough tax reform for which I have argued both today and on Second and Committee Stages as well as year in, year out since 1997. We are seeking reform of the way sport is funded or, in reality, under-funded in the State. The Minister has heard the earnest appeals of those who want to have this measure adopted. Note the attendance in the Chamber from the various parties. There is multiple representation from Fine Gael which sponsored the amendment, the Labour Party and Sinn Féin. However, the Minister has sat alone on the opposite side throughout the entire debate. Where are all his backbenchers in Fianna Fáil who earlier this afternoon were pushing and shoving to get themselves into the photograph that will be recorded in tomorrow's daily newspapers? Where have they been?

Training, I suppose.

Where has their interest been in this debate and where are their contributions to the arguments in support of the amendment?

They have gone to train for Sunday's match.

The Minister looks very lonely.

They may very well come flocking in from in front of the television on which they have been hoping to watch themselves on "Six-one". They are not here to support the amendment. We know very well what buttons they will choose to press when they trundle in after the division bells ring. I earnestly appeal to the Deputies in question. It is time for them to act if the Minister is unprepared to accept the value of this amendment and the contribution it could make to the encouragement of participation in sport by young men and women. The amendment would ease the sacrifices they have to make to give of their best for our entertainment and pleasure. They bring honour to their country by representing it internationally.

There is much that can be done. I encourage the Minister to adopt the amendment. If he is not prepared to do so, he should remove the Whip from his colleagues to allow them the opportunity to vote in support of an amendment they have publicly embraced on the plinth and outside the doors of this House. I commend it to the Minister and strongly recommend it to every Member.

I will be brief. I am very conscious that time is passing and it is important to vote before 7 p.m. to see if the people who earlier today signed a document in support of the thrust of this amendment in Buswells Hotel will support it. We will see their hypocrisy as they come to the House to vote against what they signed to this morning. It will be ridiculous. Only a few minutes ago a Deputy supported the idea on national radio.

Which Deputy?

Deputy Tony Dempsey.

It was Deputy Tony Dempsey who led the deputation to the Department of Finance.

On radio he supported the idea of tax breaks for amateur athletes, yet within half an hour he will come to the House to vote against them.

The Deputy should not pre-empt the Minister's decision.

It is hypocrisy.

The Minister may change his mind.

He will turn out for the Lilywhites yet.

Deputy Paul McGrath to continue without interruption.

The case has been well made for each tax break the Minister is providing for the arts, professional athletes and even buildings. At the stroke of a pen, he gives more tax breaks for a hotel than he is prepared to provide for athletes who give of their all week in, week out. Why cannot he face up to this today and provide athletes with the break they so badly need?

The amendment is a re-run of a proposal made two years ago by the late Deputy Jim Mitchell and me. We tabled a similar amendment which was not as well thought out as the one before us, though it gave the matter an airing. Unfortunately, on that occasion the idea did not take off. I recall the Minister saying he would not do anything about it at the time. Perhaps, given the fact that in the intervening two years he has met the Gaelic Players Association and heard its side of the story, he will have changed his mind.

I compliment the Gaelic Players Association on its work. It is past the time players had a body to represent them. Mr. Farrell is doing a fine job. It is important that the voices of players are heard given that for so long we have heard only management. There is now an alternative. I hope the association will further strengthen the GAA. I appeal to the Government to support the amendment and live up to the commitment its Deputies so publicly made this morning.

Like the Minister, I grew up on a diet of Gaelic football and hurling. I had the pleasure of playing with his brother on the sports field. I am somewhat flabbergasted at the Minister's position as he has adopted innovative stances throughout his life. He was very honourable in the stances he took during his career with the result that he failed to achieve high office as early as he should have. I am amazed that he is not agreeing to the amendment, although I acknowledge that he might well have to put in place some restrictions. The GPA's amendment imposes restrictions and outlines qualifying criteria to be put in place involving the Sports Council and drug testing.

Those who reach the top in amateur games come from small, rural areas like the ones from which we come. Their precocious talent is nursed and developed before they rise to elite status to which every one of us aspired in early life. As young people, we all followed role models and icons and wished to achieve. Those who achieve elite status do so at great personal cost and sacrifice. I was not surprised to hear today about a man with young family who is involved in the GAA. His working wife had to hire help in the evening to look after their children. There is a tremendous financial cost imposed on any player or participant in sport. As Deputy Ó Caoláin said, we laud their achievements at the Olympics and wrap the flag around us. We have an opportunity to recognise them and abandon rhetoric and hypocrisy. I was stunned by the level displayed this morning.

I have been involved in politics long enough to know there are different views on different sides. It is in this Chamber that we must make our voices heard and vote in favour of or against the amendment. I am beginning to wonder why the Minister has not agreed to this proposal. I admire his fortitude, although I have disagreed with him. My perspective is that of the left of centre whereas the Minister is on the right of centre. Politics is about different arguments on how to get to the same place.

The Minister is hamstrung in some way on this matter. He should break the deadlock imposed on him. Somebody is inhibiting him when it is not his nature to be inhibited. Many of us have a lot about which to be grateful to him. Some of my own colleagues have failed to demonstrate the same level of innovation. He cannot be responsible. I appeal to him to support the amendment.

I am very familiar with members of the GAA having come up through its ranks. I was lucky enough to be involved with the association in my county. In the 1970s and 1980s one might have got the odd meal after a game before being sent packing. Thankfully, the advent of the players' representative association has meant that matters have improved. However, there is still no recompense for the outlay and sacrifices players make to cover their out-of-pocket expenses. They had to fight very hard for the small gains they have made. They are still trying to secure additional gains and I hope they are successful. I applaud them for having retained their amateur ethos. Some of the biggest stars have always said they would like to remain amateur and I applaud them for this. They have given us great entertainment over the years. We have a plethora of tax breaks for animals, buildings etc. This one would be for people who are role models and have given us pleasure. I applaud the GPA in that it did not confine this to players from within its association and has widened the ambit to include other sports persons. It is thought that between 5,000 and 6,000 would fall into this category.

In County Westmeath we can call on Dessie Dolan, Martin Flanagan or other players to attend functions. My daughter is chairperson of the young pioneers and she was able to call upon people like this to attend a function. They gave their time for free and spoke to the young people, encouraging them not to drink alcohol and to follow sporting and other recreational pursuits.

Sunday is the only night sports people, particularly dual players, are at home. Dual players train six nights a week. This is not only a personal sacrifice, it puts considerable strain on players bodies. I saw Conal Keaney, a dual player, playing with Dublin last Sunday. He is a tremendous player and a great athlete. Such players give great dedication, commitment and discipline and are good ambassadors. Surely if we can do this for the better off, we can do it for those that are less well off. As Deputy Ó Caoláin said, many of these players only have a playing career from the age of 20 to 32. Other sports can go on forever but Gaelic games, and many other sports, are physical and the players cannot play forever. I know the Minister's heart is with this, he should not let his head rule and should accept the amendment.

I support the amendment and agree with the comments that have been made. I attended the briefing in Buswells Hotel this morning and sensed an air of defeatism among the sports people regarding it. They felt that they had lost before the game had even commenced. They predicted that the game would be up before the final whistle this evening. While it is unlike sports people to be so minded, they faced reality at the briefing.

The Finance Act 2002 made provision for a 40% claim back of tax over ten years of a sports person's life and this was welcomed. We should encourage sports people. However, amateur sports people were discriminated against in this. They are professional in all but name; they have the same training, dietary and discipline routines. They must also juggle a job with these demands and often must seek time off. While they play sport in their family time, professionals do it during their working time. Amateur sports people make major sacrifices at weekends. Weekends away and booking family holidays abroad are non-runners. This cannot be done until a team is knocked out of the championship. Many players feel they cannot make such booking until after the first or third Sunday in September.

We get tremendous pleasure from watching amateur sports. We take great pride when people from abroad attend our games and see the level of commitment in all-Ireland finals or Ulster championship matches. They ask whether the players they are watching are really amateurs. We are proud to say that the players are amateur and one might wonder whether we are abusing this. Unedited coverage of top-level professional soccer matches on television often leaves much to be desired and does not compare with the level of amateur sport that we have in this country.

I am concerned about other discriminatory aspects of this. For example, professional jockeys can benefit under the 2002 Act while an amateur jockey, who does the same job and jumps the same fences, does not. I have no doubt that we will cheer such jockeys, hopefully Irish ones, across fences at Cheltenham next week.

Amateur sports people often become injured and we do not have a great track record of looking after them. Amateurs do not seem to have the same level of medical back up that professionals have. I know of many people who left sport early and have not been properly cared for. One would be shocked to see great sportsmen in this position, even those from Deputy Deenihan's time, now almost in wheelchairs. It is indicative of the level of commitment these people give. However, we toss them out to grass when their sports careers are over.

I am sure that in other debates we will discuss ways of bringing young people off the streets and encouraging them to partake of sports. We rely on ex-sportspeople for this. If we treat sports people well when they are in their prime, they will then feel that they have something to give back to sport at youth level. Many already feel that they will give something back.

The gatekeeper of this scheme would be the Irish Sports Council. The council proposes that only amateurs liable to drug testing would be subject to these provisions. While I know that this amendment will probably be defeated, there will always be another budget. The Minister is innovative and I ask that he consider this measure in the next budget.

I support Deputy Deenihan's amendment and the players that we met this morning, such as Dessie Farrell, that have given loyal service to the GAA. I have always believed that the GAA should play its players. While they are amateurs, these players give a full-time commitment. Former Dublin player Kevin Moran was fitter than his new team-mates when he joined Manchester United.

The GAA is moving with the times and matches are now played on Saturday and Sunday evenings. The championship now allows defeated teams to return to the competition. The Mayo team is much like the Minister's Kildare team; while we were never much good with forwards we have women that can win all-Irelands. I wish that we could put Cora Staunton at full-forward on the Mayo senior team. If we had, we would have won three all-Ireland titles in the last five years.

The Minister has always been a sportsman. Can he tell me how he, the Taoiseach and other members of Fianna Fáil can get tickets for all-Ireland finals? When one looks up at the Ard Comhairle in Croke Park one can see the Taoiseach and every Fianna Fáil Deputy and Minister. Even if he does so privately, will the Minister let me know how they can get such tickets? I fail to get them, even when my county is involved.

The Deputy could try paying for them.

I have sent cheques to the GAA and it has sent them back to me. The GAA should change the name of the Ard Comhairle to the Fianna Fáil comhairle. I cannot get tickets when Mayo is playing. I have paid for every ticket I have got from the GAA. I have sponsored my team in every way I can.

The Minister was never afraid to take a decision. I have great time for him because he is not a man that will listen to his officials. He should do the right thing tonight and back the players for which he would be remembered by the GAA. I would not begrudge him when he was at the All Ireland final and had his own seat in the Ard Comhairle box. I would say I knew the reason he got it and that he deserved it.

Just one week ago the whole country was in shock following the death of Cormac McAnallen. It brought home to everyone the enormity of the sacrifices players made to provide entertainment for all of us. The profile of his life from the age of 15 and 16 years indicated the amount of work he put in, his dedication and determination to reach a performance of excellence.

I commend the GPA for advocating the amendment and the Deputies who tabled it. What Cormac McAnallen endured in his lifetime and the amount of work he put in to reach his standard of performance are exemplified throughout the country. Young players in each county put in the same effort and make many sacrifices to reach a performance of excellence. They must give up their social life, observe a very strict diet, which is very costly, and, in many instances, give up overtime to supplement their income. Those who are self-employed must get people to cover for them while they are in training to represent their county and so on.

Due to the severity of training, many inter-county players, including those who played with Deputy Deenihan such as Seán Walsh, John O'Keeffe and so on, have long-term injuries from which they suffer terribly. One player has a plastic hip at the age of 42 years as a result of the terrific performances they must give to entertain us.

Glen Ryan, whom I am privileged to know, has made an enormous effort for his county. The Kerryman, Mick O'Dwyer, helped Kildare to win two Leinster finals. He has been a tremendous example to young people. I ask the Minister to consider the amendment in a positive light. It is no more than the players, including those in minority sports, who are high performance athletes deserve. They are amateur sports people who train as professionals to bring success to their respective counties. They do their utmost to provide the entertainment we are all privileged to witness.

I commend Deputies Deenihan and Bruton for tabling the amendment and all those who supported it. I hope the Minister will accept it and not put many of his colleagues who support the GPA through the turmoil of having to stand by him on the issue. It would be a disgrace and an affront to what they and all of us wish to see.

The amendment proposes a scheme of annual tax credits for elite amateur sportspersons resident in the State. The tax credit of €2,000 would be used against the person's non-sport income, since being amateurs, they do not have income arising directly from the sport itself. This proposal for a tax credit for elite amateur sportspersons has been promoted by the Gaelic Players Association whose members are not paid in respect of their direct participation in Gaelic games. In effect, it means taxpayers should subsidise certain amateur sportspersons when their own organisations are unwilling to do so. This is the nub of the matter.

The Government has made substantial sums of money available to the GAA at national and local level for the development of facilities which provide the appropriate arenas in which these great national games are played. The GAA has also been exempt from income tax for the past 75 years, since 1928. This special relief should not be overlooked by those seeking even more favourable regimes. In the last two years alone the organisation has been allocated no less than €68 million in Exchequer funding, including €1.5 million a year in current funding for the governing body. I am not just talking about Government funding for Croke Park, in respect of which I took more than my fair share of criticism, but for a whole range of GAA facilities built with assistance under the sports capital programme which is administered by my colleague, the Minister for Arts, Sport and Tourism. The record shows that no Government has been as generous to Irish sport as this Administration.

I am fully conscious and appreciative of the efforts of GAA players at the top level. As a lifelong supporter of the games, I am well aware of the pleasure and benefits followers derive from the efforts of the players wearing the club and county colours. It should be a matter of pride to put on a county jersey, not a matter of monetary calculation. Many amateurs in all walks of life have been honoured to represent their country many times at their own expense.

I said on Committee Stage, as I had previously, that over the years the needs of players had often been neglected and it was shameful that it was only in recent times players' concerns had been heard. The GPA is to be complimented on its role in that regard. However, the provision of a new tax credit for each player in recognition of the efforts of GAA players is an entirely different matter. The GPA argument appears to be that because the GAA refuses to pay players for participation in the games, or even reimburse them adequately for legitimate expenses incurred directly as a result of their involvement in games and training sessions, the Government, that is, the taxpayers, should pick up the bill. It is not an argument with which I can agree under any circumstances.

I note with interest official comments in recent days from GAA circles in support of the GPA's submission. It is ironic that while the GAA regards the GPA as some form of maverick group with suspect motives that must be kept at arm's length, it has no problem issuing edicts of support for this same group when it appears the Government could be the solution to the thorny question of "pay for play". The GPA problem is a GAA one. It is not my intention that individual players should be given generous tax exemptions to compensate for the difficulties of the GAA on this issue. The resolution of the problem of player compensation is a matter for the GPA and the GAA, not the GPA and the Government.

The proposed tax credit of €2,000 per annum per sportsperson is more than the total tax credit available to a non-PAYE single person which stands at €1,520, while the PAYE tax credit of €1,040 is almost half of what the GPA proposes should be granted to a select group of players. A tax credit of €2,000 is the equivalent of exempting €10,000 of income from tax for a standard rate taxpayer.

Bearing in mind that there is already State funding for sports organisations and sportspeople, if it was ever considered desirable to grant €2,000 per annum to all elite sportspersons, a direct grant mechanism would be more appropriate and a fairer measure. A tax credit would not benefit many of these athletes who, due to the levels of commitment and time demands of their respective training regimes, are often not in a position to hold down full-time employment.

The GPA has claimed there is discrimination in the treatment of the players represented by it. Two years ago I introduced a scheme of tax relief for certain professional and semi-professional sportspersons. It was given by way of a repayment of tax which could be claimed in the year in which the sportsperson retired from active participation in the sport. The relief relates solely to direct sports income, not from sponsorship or other income. However, the position of GAA playersvis-à-vis professional sportspersons who can avail of the retirement relief is quite different. In general, specific allowances or credits in the tax system are put in place to compensate taxpayers for necessary expenses incurred in the process of earning an income, not for expenses incurred while undertaking a voluntary activity.

The introduction of this credit would set an unwelcome precedent and other voluntary workers may well demand a similar credit on equally supportable grounds. If the players were to be offered a special tax credit to acknowledge their expenses relating to activity and their contribution to the community, it would be near impossible not to extend it to other categories of individuals who give of their time and incur expenses in a wide variety of community youth and other voluntary work. Many of the organisations to which they contribute are less likely to be able to meet the expenses of these individuals than the GAA. It is my experience where reliefs are given in one area, pressure tends to be extended by equally deserving categories elsewhere.

Is that the reason the Minister is refusing to accept the amendment?

I discussed this matter in detail on Committee Stage and have no intention of going over that ground again. As Deputy McGrath reminded the House, two years ago this matter was debated on Committee Stage when he and the late Deputy Jim Mitchell made these points.

I wish to clarify a number of points. I attended the AGM of the Gaelic Players Association in 2002 at its request, in particular, at the request of one of its members who is a long time friend of mine and a well-known county footballer. He asked me to oblige the association because it was considered to be apersona non grata within GAA headquarters at the time and it would give it a boost if I turned up.

Did the Minister tog out with them?

Between the time I had accepted the invitation and the night of the meeting, I was put under considerable pressure from the higher echelons of the GAA not to go to the meeting in Portlaoise so as not to recognise the association. In my customary fashion, I also ignored this.

The Minister was right to go.

The Minister is not in favour of the amendment.

At that meeting and subsequently the Gaelic Players Association was recognised. However, if the GAA was ever to pay the players, the same tax concession I made in 2002 would be available to them in respect of earned direct income.

The Deputy's amendment is not the mechanism to do this. The more appropriate mechanism would be to give direct grants to leading sportspersons. The tax system for professional sportspersons relates to the income they derive from being professional sportspersons. If we were to extend the tax system to give relief against tax credits, it would be the same as handing a person a direct grant.

The Minister wants to change the amateur status of the GAA.

As the tax credit system now applies, if we were to give a GAA sportsperson a grant, it would be a relief and a tax credit not related to their earning activity. That is what it would amount to. The tax system is not the appropriate mechanism.

I recognise more than most the contribution elite sportspersons make, particularly GAA players. I have always acknowledged this. It is a matter for the GAA if it wishes to reward its footballers and hurlers. It can do whatever it wishes. I never held out to the Gaelic Players Association, even in 2002, the possibility that there would be a tax break in this area. I met the association on a number of occasions because I liked the individuals involved. I responded to requests from Deputies in my party to meet them but stressed to the Deputies concerned that I was not in a position to make this change.

Deputy Penrose referred to himself and a brother of mine. They both played football on the same college team many years ago. However, this issue has nothing to do with officials in my Department. The Deputy claims he did not put the question but he did. The tax system will not be used in this way. Deputies will have to wait for a new Minister for Finance to be nominated before they see this change.

I would like to refute the Minister's arguments. However, due to time restraints, I just wish to say there is no way the GAA can pay the players. Technically, up to 19 county boards are insolvent.

It would wipe it out.

Amendment put.
The Dáil divided by electronic means.

In view of the sporting involvement of many Members of the House, it is only appropriate that a little further exercise be undertaken in walking up to the lobbies for a manual vote. As a teller, under Standing Order 69 I propose that the vote be taken by other than electronic means.

As Deputy Durkan is a Whip, under Standing Order 69 he is entitled to call a vote through the lobby.

Amendment again put.
The Dáil divided: Tá, 57; Níl, 67.

  • Boyle, Dan.
  • Broughan, Thomas P.
  • Bruton, Richard.
  • Burton, Joan.
  • Connaughton, Paul.
  • Connolly, Paudge.
  • Costello, Joe.
  • Coveney, Simon.
  • Crowe, Seán.
  • Cuffe, Ciarán.
  • Deenihan, Jimmy.
  • Durkan, Bernard J.
  • English, Damien.
  • Enright, Olwyn.
  • Ferris, Martin.
  • Gilmore, Eamon.
  • Gogarty, Paul.
  • Gormley, John.
  • Gregory, Tony.
  • Harkin, Marian.
  • Healy, Seamus.
  • Higgins, Joe.
  • Higgins, Michael D.
  • Howlin, Brendan.
  • Kehoe, Paul.
  • Kenny, Enda.
  • Lynch, Kathleen.
  • McCormack, Padraic.
  • McGinley, Dinny.
  • McGrath, Finian.
  • McGrath, Paul.
  • McHugh, Paddy.
  • McManus, Liz.
  • Mitchell, Gay.
  • Mitchell, Olivia.
  • Morgan, Arthur.
  • Moynihan-Cronin, Breeda.
  • Murphy, Gerard.
  • Naughten, Denis.
  • Neville, Dan.
  • Ó Caoláin, Caoimhghín.
  • Ó Snodaigh, Aengus.
  • O’Dowd, Fergus.
  • O’Sullivan, Jan.
  • Pattison, Seamus.
  • Penrose, Willie.
  • Perry, John.
  • Quinn, Ruairi.
  • Rabbitte, Pat.
  • Ring, Michael.
  • Ryan, Eamon.
  • Ryan, Seán.
  • Sargent, Trevor.
  • Sherlock, Joe.
  • Shortall, Róisín.
  • Timmins, Billy.
  • Twomey, Liam.

Níl

  • Andrews, Barry.
  • Ardagh, Seán.
  • Brady, Martin.
  • Browne, John.
  • Callanan, Joe.
  • Callely, Ivor.
  • Carey, Pat.
  • Carty, John.
  • Collins, Michael.
  • Cooper-Flynn, Beverley.
  • Coughlan, Mary.
  • Cregan, John.
  • Cullen, Martin.
  • Curran, John.
  • Davern, Noel.
  • de Valera, Síle.
  • Dempsey, Tony.
  • Dennehy, John.
  • Devins, Jimmy.
  • Ellis, John.
  • Fahey, Frank.
  • Finneran, Michael.
  • Fitzpatrick, Dermot.
  • Glennon, Jim.
  • Grealish, Noel.
  • Hanafin, Mary.
  • Haughey, Seán.
  • Hoctor, Máire.
  • Jacob, Joe.
  • Keaveney, Cecilia.
  • Kelleher, Billy.
  • Kelly, Peter.
  • Kirk, Seamus.
  • Lenihan, Brian.
  • Lenihan, Conor.
  • McCreevy, Charlie.
  • McDowell, Michael.
  • McEllistrim, Thomas.
  • McGuinness, John.
  • Martin, Micheál.
  • Moloney, John.
  • Moynihan, Donal.
  • Moynihan, Michael.
  • Mulcahy, Michael.
  • Nolan, M. J.
  • Ó Cuív, Éamon.
  • Ó Fearghaíl, Seán.
  • O’Connor, Charlie.
  • O’Dea, Willie.
  • O’Donnell, Liz.
  • O’Donoghue, John.
  • O’Donovan, Denis.
  • O’Keeffe, Batt.
  • O’Malley, Fiona.
  • O’Malley, Tim.
  • Parlon, Tom.
  • Power, Peter.
  • Power, Seán.
  • Sexton, Mae.
  • Smith, Brendan.
  • Smith, Michael.
  • Treacy, Noel.
  • Wallace, Dan.
  • Wallace, Mary.
  • Walsh, Joe.
  • Woods, Michael.
  • Wright, G. V.
Tellers: Tá, Deputies Durkan and Broughan; Níl, Deputies Hanafin and Kelleher.
Amendment declared lost.

I am now required to put the following question in accordance with an order of the Dáil of this day: "That the amendments set down by the Minister for Finance and not disposed of are hereby made to the Bill, Fourth Stage is hereby completed and the Bill is hereby passed."

Question put.
The Dáil divided: Tá, 67; Níl, 53.

  • Andrews, Barry.
  • Ardagh, Seán.
  • Brady, Martin.
  • Browne, John.
  • Callanan, Joe.
  • Callely, Ivor.
  • Carey, Pat.
  • Carty, John.
  • Collins, Michael.
  • Cooper-Flynn, Beverley.
  • Coughlan, Mary.
  • Cregan, John.
  • Cullen, Martin.
  • Curran, John.
  • Davern, Noel.
  • de Valera, Síle.
  • Dempsey, Tony.
  • Dennehy, John.
  • Devins, Jimmy.
  • Ellis, John.
  • Fahey, Frank.
  • Finneran, Michael.
  • Fitzpatrick, Dermot.
  • Glennon, Jim.
  • Grealish, Noel.
  • Hanafin, Mary.
  • Haughey, Seán.
  • Hoctor, Máire.
  • Jacob, Joe.
  • Keaveney, Cecilia.
  • Kelleher, Billy.
  • Kelly, Peter.
  • Kirk, Seamus.
  • Lenihan, Brian.
  • Lenihan, Conor.
  • McCreevy, Charlie.
  • McDowell, Michael.
  • McEllistrim, Thomas.
  • McGuinness, John.
  • Martin, Micheál.
  • Moloney, John.
  • Moynihan, Donal.
  • Moynihan, Michael.
  • Mulcahy, Michael.
  • Nolan, M. J.
  • Ó Cuív, Éamon.
  • Ó Fearghaíl, Seán.
  • O’Connor, Charlie.
  • O’Dea, Willie.
  • O’Donnell, Liz.
  • O’Donoghue, John.
  • O’Donovan, Denis.
  • O’Keeffe, Batt.
  • O’Malley, Fiona.
  • O’Malley, Tim.
  • Parlon, Tom.
  • Power, Peter.
  • Power, Seán.
  • Sexton, Mae.
  • Smith, Brendan.
  • Smith, Michael.
  • Treacy, Noel.
  • Wallace, Dan.
  • Wallace, Mary.
  • Walsh, Joe.
  • Woods, Michael.
  • Wright, G. V.

Níl

  • Boyle, Dan.
  • Broughan, Thomas P.
  • Bruton, Richard.
  • Burton, Joan.
  • Connaughton, Paul.
  • Connolly, Paudge.
  • Costello, Joe.
  • Crawford, Seymour.
  • Crowe, Seán.
  • Cuffe, Ciarán.
  • Deenihan, Jimmy.
  • Durkan, Bernard J.
  • English, Damien.
  • Ferris, Martin.
  • Gilmore, Eamon.
  • Gogarty, Paul.
  • Gormley, John.
  • Harkin, Marian.
  • Healy, Seamus.
  • Higgins, Joe.
  • Higgins, Michael D.
  • Howlin, Brendan.
  • Kehoe, Paul.
  • Kenny, Enda.
  • Lynch, Kathleen.
  • McCormack, Padraic.
  • McGinley, Dinny.
  • McGrath, Finian.
  • McGrath, Paul.
  • McHugh, Paddy.
  • McManus, Liz.
  • Mitchell, Gay.
  • Morgan, Arthur.
  • Moynihan-Cronin, Breeda.
  • Murphy, Gerard.
  • Naughten, Denis.
  • Neville, Dan.
  • Ó Caoláin, Caoimhghín.
  • Ó Snodaigh, Aengus.
  • O’Sullivan, Jan.
  • Pattison, Seamus.
  • Penrose, Willie.
  • Perry, John.
  • Quinn, Ruairí.
  • Rabbitte, Pat.
  • Ring, Michael.
  • Ryan, Eamon.
  • Ryan, Seán.
  • Sargent, Trevor.
  • Sherlock, Joe.
  • Shortall, Róisín.
  • Timmins, Billy.
  • Twomey, Liam.
Tellers: Tá, Deputies Hanafin and Kelleher; Níl, Deputies Durkan and Broughan.
Question declared carried..