Finance Bill 2011: Second Stage

I move: "That the Bill be read a Second Time."

In the first place——

I understood from his office that the Ceann Comhairle was to facilitate each party in the opening slots on Second Stage of the Finance Bill but that is not what he has just indicated.

As I indicated, speaking time will be given first to the Minister, Fine Gael and the Labour Party will have 30 minutes and the Green Party and the Deputy's party, Sinn Féin, will have 20 minutes on the first round.

That was not the understanding we had from our contacts with the Ceann Comhairle's office prior to the commencement of business today, which we accepted in good faith. There is a change to what was indicated to us, namely, what the Ceann Comhairle was prepared to facilitate. I do not understand why——

Deputy, I have done much to facilitate you. You will realise that the Technical Group no longer exists. That is the position.

I understand that situation.

The Green Party has six Members in Opposition, Sinn Féin has five and that is the proposed sequence.

If I recall correctly from my earlier engagement with the Ceann Comhairle's staff, under Standing Order 121(3) we made the point that the House can order time. The Ceann Comhairle indicated this to us and, as it was not laid down in terms of time formation within the Order Paper, we had every reason to understand that what was communicated to us from his office was what he would honour on the floor of the House. That is not what was just communicated. I do not seek to be vexatious in any way but I ask the Ceann Comhairle to appreciate it was indicated to us that we would have a 30 minute slot, the same as each of the other opening speakers.

I must advise you that in all the circumstances it is a concession on my part and on the part of my office to allow the Deputy to speak in the debate.

That is the position because the Technical Group no longer exists as a result of the changed dynamics in the Chamber. As a result of the exceptional circumstances in which we find ourselves, we have decided to allow the Deputy speak on behalf of Sinn Féin.

What about the Independents?

Will the Ceann Comhairle clarify if the opening contributor will be allowed to share time?

That would have to be agreed by the House.

We ask that the House would agree that.

Is it a sharing of time?

In the interests of democracy and fair play, every Member of the Oireachtas should get the opportunity to speak on this important piece of legislation. It is very simple.

Hear, hear.

The proposal is for a truncated debate. The sharing of time is agreed.

Is it 20 minutes for the Green Party and 20 minutes for Sinn Féin?

That seems reasonable. If the Independents could be facilitated as well, everything would be fine.

In order to be helpful I would seek to facilitate those who were members of the Technical Group, although there is no longer such a group. If 20 minutes are to be shared, I presume it could be shared with the people forming the Technical Group. I am sure Deputy Finian McGrath could get five of the 20 minutes, having supported Sinn Féin in setting up the group. The party would hardly forget him at this late stage.

The Taoiseach enjoyed his support for much longer than we did.

The Deputy has reminded me again of the well-known generosity of Sinn Féin. When it suits the party, it forgets about those who helped it.

We should have some co-operation in the House.

First, I thank the main Opposition parties for their co-operation yesterday in agreeing a timetable which will allow the passage of the Bill before us today. The Finance Bill is an integral and important part of our commitment under the external assistance programme. Any uncertainty, or worse, failure to have it enacted would have been damaging to Ireland internationally and could have jeopardised the arrangements we have reached with the European Union and the IMF which has given us access to the funding we and every Government will need to pay for the public services this State will provide to our citizens over the next three years.

This Finance Bill is being brought forward in an unprecedented set of political circumstances. The Government would have liked more time to bring forward significant amendments, for example, to allow for the necessary changes to the tax system arising out of the civil partnerships legislation. There are also other matters we would have wished to address on an annual housekeeping basis in this finance legislation. The requirement to accelerate the Bill in order to facilitate an earlier general election has made it impossible to deal with these matters now but they can and should be dealt with speedily by the new Government.

The necessarily truncated process has restricted us but notwithstanding the time pressure under which it is working, the Government agreed this morning to bring forward a number of important amendments. Among them is an amendment which deals with the position of medical card holders under the new universal social charge. We now propose that the maximum rate applying to medical card holders should be 4% rather than 7%, the same rate as applies to persons over 70.

The universal social charge represents a very substantial change to our tax system. It is based on the principle that everybody must pay according to their means. As I have said many times, it is simply not sustainable that 45% of income earners should pay no tax, and I stand by that statement. However, it is apparent that those who have medical cards have been adversely affected by the new charge and the Government wants to ameliorate their position while at the same time maintaining the principle that everyone must make a contribution. The cost of this change, which is about €80 million, will be made up by increasing the universal social charge rate paid by self-employed taxpayers from 7% to 10% on income in excess of €100,000. It is important to realise that any changes to the tax provisions of this Bill must be paid for by increases elsewhere. This is not just a fundamental issue in this debate as it is a fundamental issue in the national debate lying before us. Any changes in expenditure or taxation plans must be fully justified and costed.

The passing of the Finance Bill 2011 will give permanent legal effect to the revenue measures which were provided for in the resolutions passed on budget night on 7 December last. The Bill will continue the process of stabilising our public finances, providing appropriate support to business and assisting the Revenue Commissioners to maintain a climate of compliance. This country has been through the most severe downturn in the history of the State, with crises in both the public finances and banking system. Over the past two and a half years, we have taken swift action to address the deep imbalances in our public finances and to ensure that the banking system is returned to a stable and sustainable footing.

As the House will be aware, the Government has decided that in order to achieve the deficit target of 3% of GDP by 2014, an adjustment of €15 billion is necessary over the period 2011-2014. The Government understands that the scale of the adjustments will have an impact on the living standards of us all. However, sustainable public finances are a prerequisite for a return to growth. To show our resolve, the budget contained considerable frontloading, with an adjustment of €6 billion, and this Finance Bill will enact many of the measures necessary to bring about this adjustment.

There were considerable imbalances built up in the Irish economy through the middle part of the previous decade, with growth dominated by an unsustainable construction boom. The last number of years have seen the Irish economy rebalance itself towards a more sustainable growth path for a small open economy, that is, one led by exports. Figures from the most recent national accounts show that exports rose 13.2% in the third quarter of last year, while data from the purchasing managers' index suggest this trend is set to continue in the coming months. This strong export performance reflects the significant price and wage adjustments taking place, which is testament to the flexibility and adaptability of the Irish economy and workforce.

During the building boom of the middle part of this decade, Ireland had its competitive edge eroded relative to our main trading partners. We took our eye off the ball so to speak. However, as a country we are regaining this competitiveness and while the falls in domestic prices, easing wage pressures and improvements in productivity are helpful, we must not be complacent as further improvements in our competitiveness are essential to take advantage of the global recovery. To this end, the national recovery plan sets out in considerable detail a series of microeconomic reforms, including labour activation measures which will improve our competitiveness and underpin our growth into the future.

In the labour market, there was a significant fall in the claimant count number of unemployed in the last quarter of 2010, so there are signs of stabilisation. Another encouraging development is the movement of the current account of the balance of payments into positive territory in the third quarter of 2010, which means that the nation as a whole is no longer increasing its external liabilities. I am pleased to say that, following the sharp contractions during 2008 and 2009, available data points towards a stabilisation of economic activity last year. Recently published figures show both GDP and GNP expanding in the third quarter of 2010, which is very encouraging, and most commentators expect this upward momentum to be maintained this year, with a full year of positive growth in prospect.

The recovery is being driven by the exporting sectors, underpinned by the significant improvements in competitiveness. As wages and other costs are adjusting, we are pricing ourselves back into global markets. This is most evident from the 13% annual rate of export growth recorded in the third quarter of last year, one of the best performances in the EU. Moreover, this export growth is broad-based, with the pharmaceutical, software, financial and food sectors all performing well. With this export-led growth, Ireland will have a balance of payments surplus this year, so the country as a whole will be paying its way in the wider world, notwithstanding our public financial difficulties.

Given the impact of the fiscal consolidation and the necessary unwinding of private sector imbalances, domestic demand will remain relatively muted this year, although in the coming years export-led growth will gradually filter through to the domestic economy. I acknowledge the high levels of foreign direct investment that Ireland continues to attract; almost 1,000 companies, including household names such as Google, eBay and Facebook have chosen Ireland as the hub of their European networks. Eight of the top ten global medical technology companies have a manufacturing base in Ireland and eight of the top ten pharmaceutical firms have operations in Ireland. The message must be clear that Ireland remains open for business and is still the destination of choice for many of the world's leading firms. That is the real hope existing in our economy and it is that to which we must attend as public representatives.

The public finances stabilised over the course of 2010. The underlying Government deficit for 2010 is expected to come in at the 11.6% of GDP forecast in budget 2010. The budget figures were on target last year but a gap remains between Exchequer expenditure and revenues in 2010 of just under €19 billion. It is clear that the State must reduce its level of borrowing over the coming years by aligning more closely its revenues and expenditure.

In the past two and half years, the Government has engaged in a process of reprioritisation and consolidation across all areas of expenditure to close this gap. The measures have reduced all aspects of Government discretionary spending, including public sector pay and running costs across Departments and State bodies. Significant revenue raising measures have also been implemented over this period, including the introduction of an income levy, a carbon tax and increases in capital tax rates. Based on a budgetary consolidation package of €6 billion in 2011, the general government deficit is expected to decline further this year to 9.4%. The measures outlined in the national recovery plan will assist in reducing this deficit to below 3% of GDP by 2014 in line with the commitments given.

Before I go through the Bill in detail, I draw Deputies' attention to some of the key measures contained in it. The Bill sets out the details of the universal social charge, which replaced and combined the income and health levies. It is a more sustainable charge and applies on a wider base. It removes the steps and poverty traps associated with the income and health levies and goes some way to providing a smoother progression and dealing with irregularities in the previous two charges.

I am aware that the introduction of the universal social charge has been the subject of much comment in recent days. The charge was introduced for a specific reason. We must move away from a position in which people do not make any tax contribution to society and, as a result, the burden falls too heavily on others. As I have often stated in this House, a position in which 45% of tax units do not pay tax is unsustainable for any Government.

However, both the Government and I are aware of concerns expressed by some about the universal social charge. While some concerns are overstated, others are more legitimate. As regards the latter, I propose to bring forward two amendments on behalf of the Government on Committee Stage which will make the measure fairer without conceding the key principle that everyone must make some contribution. Under these proposed amendments, those in receipt of a medical card will see the top rate of charge reduced from 7% to 4%; the same as applies for persons aged over 70 years. The new rate will apply as follows: 2% on income up to and including €10,036 and 4% on income above that amount.

The rate for the self-employed earning more than €100,000 per annum will increase from 7% to 10% over that level. I undertook to look into this matter when it was raised by Deputy Noonan on budget night. This change ensures the contribution made by the self-employed will be of the same order of magnitude as the contribution made by employees and will leave their top marginal tax rate unchanged on last year. These measures, if adopted, will be transitional in nature and will have effect until the end of the period of the national recovery plan.

A number of reliefs and exemptions are being either restricted or abolished in accordance with the announcement in my budget speech. These tax expenditures include rent relief, which is being phased out over eight years, patent royalty exemption, tax relief for trade union subscriptions, relief from benefit-in-kind for employer provided child care facilities, capital expenditure on new machinery and plant for use in mining and a number of share related measures, namely, relief on loans to acquire an interest in certain companies, approved share options schemes and relief for new shares purchased by employees.

The provisions on the property related tax expenditures, as announced in the budget, are fully contained in the Bill. However, the Government has decided that they will now be subject to a commencement provision which may only take effect in the next tax year following the preparation and publication of an economic impact assessment on the proposed changes. A Committee Stage amendment may be introduced to further clarify the precise commencement of this provision.

The business expansion scheme is being reformed and renamed the employment and investment incentive. This new incentive will be more targeted at job retention and creation. Once the necessary approval is received from the European Commission, the new incentive will be commenced by ministerial order. This will encourage job creation in both new and existing companies.

Income tax relief will be provided for expenditure incurred by individuals, not the landlord of the property, on a range of works undertaken to improve the energy efficiency of residential premises situated in the State. A maximum of €30 million in relief per annum will be allowed under this scheme.

The Bill gives effect to the fundamental reforms to stamp duty on residential property announced in the budget. Stamp duty is now payable at 1% on residential property transactions valued up to €1 million and 2% on the excess over €1 million. This applies to all such transfers on or after 8 December 2010.

The scheme introduced in budget 2009 which provides a three year exemption from corporation tax on the trading income and certain gains of new start-up companies is being extended to include start-up companies which commence a new trade in 2011.

I will now take Deputies through the Bill and describe the main provisions contained therein. Part 1 deals with the income levy, universal social charge, income tax, corporation tax and capital gains tax. Section 1 is the usual interpretation section. Section 2 provides for the cessation of the income levy. The health levy was abolished in the Social Welfare and Pensions Act 2010 which was passed by the Oireachtas before Christmas.

Section 3 makes provision for the introduction of the new universal social charge as announced in the budget. The charge replaces the income and health levies and applies at a low rate on a broad base. It is charged on an individualised basis on gross income at 2% on income up to and including €10,036, 4% for income in excess of €10,036 but not greater than €16,016 and 7% above that level. Those aged more than 70 years do not pay this higher rate and there is a lower exemption threshold of €4,004.

The universal social charge does not apply to social welfare payments, including contributory and non-contributory social welfare State pensions. While there are no exemptions for pension contributions or medical cards, Deputies will be aware of the proposed Committee Stage amendment to introduce a low rate for persons with medical cards for a transitional four year period. The social charge is a more sustainable charge than the income and health levies. It removes the anomalies associated with these charges and ensures a smoother tax progression across income levels.

Sections 4 to 6, inclusive, provide for the budget announcement to reduce the standard rate bands, age exemption limits and tax credits in line with overall reduction in income. The single standard band is being reduced by €3,600 per annum from €36,400 to €32,800. The married one earner band is being reduced by €3,600 from €45,400 to €41,800. The married two earner band is being reduced from €72,800 to €65,600, with transferability limited to €41,800. The one parent-widowed parent band is being reduced by €3,600 from €40,400 to €36,800. The age exemption limits are being reduced by €2,000 in the case of a single person and €4,000 in the case of a married couple to €18,000 and €36,000, respectively.

The personal credit is being reduced by approximately 10% per annum from €1,830 to €1,650 in the case of a single person and by €360 per annum from €3,660 to €3,300 in the case of a married couple. The employee PAYE tax credit is also being reduced by 10% from €1,830 to €1,650. All other credits are being reduced by 10%. The age credit is being reduced by €80 per annum from €325 to €245 in the case of a single person and by €160 per annum from €650 to €490. These changes are in line with the commitments in the national recovery plan.

Section 7 provides for the changes to certain exemptions from benefits-in-kind taxation already announced in the budget. First, it abolishes the benefit-in-kind exemption that previously applied to payment of professional fees and subscriptions by employers. It also abolishes the exemption from benefit-in-kind where employees are in receipt of child care facilities which are subsidised by their employers' capital contributions towards the costs of such facilities.

Section 8 restricts the amount of tax relief ofex gratia payments to a lifetime limit of €200,000 with effect from 1 January 2011. This €200,000 limit is reduced by any previous exempt payments which an employee may have previously received.

Section 9 amends section 470B of the Taxes Consolidation Act 1997, which provides for an age related tax credit in respect of health insurance premiums. The section abolishes the age related tax credit for individuals aged 50 to 59 years and increases the amount of age related tax credit in the case of insured persons aged 60 years and over for relevant contracts renewed or entered into on or after 1 January 2011.

A number of previously announced budget changes are being introduced in relation to shares. Section 10 provides for the abolition of relief for new shares purchased by employees, the abolition of approved profit sharing schemes and also brings the tax treatment of the value of share awards into the PAYE system.

Section 11 abolishes interest relief on loans that are used to acquire an interest in certain companies. This relief will be phased out over four years with an annual reduction of 25% in the amount of interest that can be relieved. No relief is allowed for new loans taken out from budget day. Section 12 provides for the abolition of tax relief for trade union subscriptions for the 2011 and subsequent tax years.

As I announced in my budget speech, I am introducing a new tax incentive scheme to encourage taxpayers to invest in works that will improve the energy efficiency of their homes. Section 13 provides the legislative basis for this scheme. The tax relief will be provided by way of repayment in the tax year following the year in which the work has been completed and in which the expenditure was incurred. The maximum amount of expenditure that will qualify for relief in any one tax year will be €150 million. This equates to tax relief of €30 million. This section is subject to a commencement order to allow for processes and procedures to be put in place.

Section 14 provides for the abolition of rent relief for new claimants from 8 December 2010. It makes the legislative changes required to withdraw the relief from existing claimants on a reducing rate basis until no further relief will be provided in the 2018 year of assessment. The withdrawal period is in line with that previously announced for mortgage interest relief.

Changes are made in section 15 to tax relief for third-level fees and charges to take account of the Government decision to replace the existing student services charge of €1,500 with a flat-rate student contribution of €2,000. Section 16 provides for the introduction of a €40,000 limit on earnings for the artists' exemption that was announced in the National Recovery Plan 2011-2014 and in the budget.

Section 17 is a routine update of the schedule of accountable persons for the purposes of professional services withholding tax. As a means of improving the assessment of tax performance in advance of the usual December budget, the pay and file dates for self-employed income tax and capital gains tax, CGT, are being brought forward by one month from end-October to end-September and this is addressed in section 18. There will continue to be an additional 14 days for payment on-line via the Revenue on-line service, ROS. These changes are aimed at reducing the over-concentration of tax receipts in late October and mid-November, which will enhance the accuracy of next-year budget forecasting. Therefore these changes are introduced not to raise additional revenue, but to ensure that the accuracy of forecasts in my Department can be enhanced by an earlier receipt of this particularly volatile section of the income tax receipts base.

Section 19 deals with the various changes in the tax treatment of private pension provision announced in the budget. These changes involve the extension of the flexible options on retirement — that is, access to an approved retirement fund and so on — to all defined contribution pension arrangements, subject to certain changes to the general conditions attaching to those options and to certain transitional provisions. There will also be an increase, from 3% to 5%, in the annual imputed distribution which applies to the value of assets in an approved retirement fund in respect of asset values at 31 December 2010 and future years. The section provides for a reduction in the maximum allowable pension fund on retirement for tax purposes, known as the standard fund threshold, to €2.3 million with transitional arrangements for individuals with pension rights valued above the reduced threshold on budget day.

In addition, there will be a reduction in the annual earnings limit which, along with age-related percentage limits, determine maximum tax-relievable contributions for pension purposes from €150,000 to €115,000 and, finally, a reduction to €200,000 in the overall life-time limit on the amount of tax-free retirement lump sums that an individual can draw down from pension arrangements. The excess of retirement lump sum payments over €200,000 will be taxed at the standard income tax rate of 20% up to an amount equal to 25% of the new standard fund threshold, which is €575,000. The excess of retirement lump sum payments over that amount will be taxed at the taxpayer's marginal rate of income tax.

Before turning to the next issue, I would like to review the pension changes. It is a matter of regret that we were not given a greater opportunity to reflect on these changes by virtue of the insistence of the Opposition on an accelerated timetable for the Finance Bill. These are matters which did require further reflection but I accept that, as a minority Government, we are not masters of our own destiny. However, they are matters about which I would have preferred more extensive reflection before the enactment of the relevant measures.

As I announced in the budget, there are major changes to the relevant contracts tax regime. These are covered in section 20 and involve the replacement of the current residential contracts tax rates with a three-rate withholding system on a revenue-neutral basis. The current 35% rate will be retained as the default rate only where the other rates are not appropriate. In addition, the monthly repayment system will be abolished and replaced with an offset system while the reporting system for RCT principals will be strengthened in order to enhance compliance and reduce the opportunities for fraud.

An area of particular concern is the loss of tax revenue caused by false claims for tax credits or refunds. Section 21 introduces a penalty for any person who makes a false claim or assists in making a false claim. This measure also seeks recovery from the beneficiary of any tax refunded on the basis of a false claim. Finally, it provides for the charging of interest on such proceeds from the date the person first benefited from the false claim until the proceeds were paid back to Revenue. I have seen some public criticism of this provision. It is important to understand that this relates to a false claim. The sum being recouped to the Revenue is one that is lost to the Revenue by way of interest bearing which would otherwise have accrued.

Section 22 provides for restrictions to schemes of accelerated capital allowances under the various area-based and property-based tax incentive schemes. Section 23 deals with restrictions to relief for lessors of rented residential accommodation, that is, section 23 relief. Both of these sections provide for changes to property-based reliefs as set out in the budget night financial resolutions. However, the commencement of these provisions is now dependent on the carrying-out and publication of an economic impact assessment into the effects of the proposed changes. In essence, the provisions restrict the use and carry-forward of capital allowances and section 23 relief. The aim of the changes is to reduce ongoing legacy costs to the Exchequer and ensure that tax will be paid on some income previously sheltered by the various reliefs.

The restrictions only apply to passive investors and not to those actively engaged in the businesses, nor do they affect residential owner-occupier relief. If commenced the provisions provide that first, all reliefs must be used within seven years in the case of seven-year schemes, such as hotels; and ten years in the case of ten-year schemes, such as section 23. Any carry forward of unused reliefs after that period will no longer be allowed and the unused reliefs will be lost. Second, tax reliefs can only be used to set against income arising from the trade or rental property that gave rise to the relief. This applies to both capital allowances and section 23-type reliefs. It ensures that tax will now be paid on some income previously sheltered by the various reliefs.

It was always intended to carry out an impact assessment of the proposed changes and that is why I announced it on budget day. However, because of the widespread level of concern that has been expressed by individuals and groups, in particular regarding the downstream effects of the changes on the real economy and on employment, I have proposed in the Finance Bill that an economic impact assessment of the changes should be undertaken in advance of the commencement of the provisions.

Legislating for the restrictions in the Finance Bill, as originally intended, combined with undertaking an ex ante impact assessment of their effect in advance of the commencement of the provisions, strikes the right balance between seeking to restrict unnecessary tax reliefs on the one hand and, on the other hand, taking notice of real concerns that have been expressed about the proposed changes. Those concerns relate to the solvency of individuals on relatively modest incomes, to the consequential exposure of the banks concerning the same, and to the prospect of legal challenges to the arrangements proposed in the legislation. Real and substantial concerns were expressed about the impact of the measures as proposed in the budget. It appeared that the intention of the budget, which was essentially to cut off the tail of these reliefs over a period, was effectuated by provisions which in effect provided for an instantaneous cutting off of the entire tail in this particular legacy. That would have had serious implications for the solvency of many individuals, some of whom have modest means. In those circumstances, the Government took the view based on the correspondence we received, that the best course of action was to carry out a comprehensive impact assessment before the commencement of the relevant measures.

Would it still be invoked in 2011?

That matter is still being examined with a view to an amendment on Committee State. In general, the commencement of such provisions takes place on an annualised basis. However, we are examining the issue of post-commencement receipts in this year with a view to an amendment on Committee Stage. However, there will not be a retrospective commencement of these provisions in relation to the period during which the impact assessment is being carried out.

Section 24 provides for the continuance of the relief to farmers for the increase in stock values for a further two years to 31 December 2012 from the current closing date of 31 December 2010, subject to the usual state aid clearance from the European Commission. Section 25 abolishes the tax exemption for income received by an individual or company from a qualifying patent. The tax exemption for distributions made by companies from exempt patent income is likewise abolished. This measure was announced on budget day and was also included in the list of tax expenditures set out in the national recovery plan for abolition or curtailment. The abolition of the exemption applies to income from a qualifying patent which is paid on or after 24 November 2010, which was the date of publication of the plan.

Capital expenditure on new machinery and plant for use in mining has qualified for a 20% investment allowance in addition to normal wear and tear allowances. An allowance of 20% of expenditure incurred on mining exploration has also been available in addition to the 100% exploration allowance for such expenditure. Section 26 abolishes these additional 20% allowances in respect of expenditure incurred from 1 January 2011 in line with the recommendation in the 2009 report of the Commission on Taxation.

Section 27 is an anti-avoidance provision. It introduces changes to legislation to counter attempts to extract funds from close companies on a tax-free basis using trusts and other such arrangements. The changes will apply to transfers of assets or liabilities made on or after the publication of the Bill.

Section 28 amends sections 256 and 267B of the Taxes Consolidation Act 1997 to provide for an increase of two percentage points in the rate of deposit interest retention tax with effect from 1 January 2011. The rate is now 27% where the interest is paid annually or more frequently and 30% where the interest is paid less frequently than annually. To match the increase in deposit interest retention tax, section 29 increases the rates of tax applying to life assurance policies and investment funds by two percentage points with effect from 1 January 2011. The changes in sections 28 and 29 are expected to yield a total of €22.5 million in 2011 and €30 million in a full year.

As previously announced, the existing business expansion scheme is being reformed and renamed the employment and investment incentive. This is being done in section 30 of the Bill. The new incentive will ensure the tax relief is more targeted at job retention and creation. It is subject to the approval of the European Commission. The existing scheme will continue until this has been secured.

In my 2009 Budget Statement, which I made in October 2008, I introduced a scheme providing a three-year exemption from corporation tax on the trading income and certain gains of new start-up companies. I have extended the scheme each year since. The scheme is being extended again in section 31 of the Bill to include start-up companies which commence a new trade in 2011. However, it is being modified to link the relief to the amount of employers' PRSI paid by a company in an accounting period, subject to a maximum of €5,000 per employee. The purpose of the change is to better target the relief at companies generating employment.

Section 32 amends Schedule 24 to the Taxes Consolidation Act 1997 to make it clear that a company is not permitted to allocate relevant trading charges on income as it sees fit in the computation of the credit due to it in respect of foreign tax paid on its income.

Sections 33 and 34 of the Bill deal with provisions relating to tax relief on interest on borrowings. As a result of this legislation, relief will not generally be allowed in respect of interest on intra-group borrowings to finance the purchase of assets from another group company, nor will such interest be allowed as a deduction in computing the profits or gains of a trade. Other changes are being made in this area to ensure the interest relief provisions operate as intended. The scheme of accelerated capital allowances for expenditure——

I am afraid the Minister has already exhausted the time available to him.

I am pleased that I have exhausted my time. I have to work through a number of sections.

I can give the Minister five minutes of my time.

I take it that the speech has been circulated. I will simply——

Deputy Ryan has suggested that the Minister could take five minutes of his time, if that is of assistance.

It is not really. I am working through the provisions of the sections. I will conclude briefly.

The Minister has other duties to which he needs to attend.

I have no other duties to perform at this stage, other than to listen to Deputy Noonan's contribution. That is my next duty.

It is in the bag.

The scheme of accelerated capital allowances for expenditure by companies on certain energy-efficient equipment that was bought for the purpose of a trade was introduced in a previous budget. The Finance Act 2008 provided that the scheme should last for a three-year trial period and end in 2011. Section 35 extends the scheme for a further three years to 31 December 2014.

The remaining sections of the Bill continue to implement various matters that have been decided on by the Government and were contained in the budget. I hope the structured amendment schedule that has been agreed for Committee Stage will give us a good opportunity to tease out the implications of these provisions in detail.

The eyes of the world will be looking at us when we vote on this measure at the conclusion of Second Stage. It is of no particular political advantage for this Government to take responsibility for the enactment of legislation that results in an increase in the imposition of taxation on citizens. However, it is important that Ireland, as a country, is seen to be able to do its business in the wider world. The resolutions associated with this Finance Bill, which were approved in December 2010, should be carried into effect before the end of this month so that we can demonstrate this country's capacity to deliver what it undertook to deliver. That will be a fundamental prerequisite for any future Government of this country. Regardless of the side of the House on which I find myself following the general election, I will undertake to provide such support in the future.

I move amendment No. 1:

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

Dáil Éireann declines to give a Second Reading to the Finance Bill, having regard to the fact that the Bill contains virtually no proposals to encourage economic growth and job creation and the fact that certain provisions of the Bill have a very severe impact on the most vulnerable in society.

Yesterday, representatives of Fianna Fáil, Fine Gael, the Labour Party and the Green Party reached agreement on a schedule to debate the Finance Bill. If its measures receive the support of the Houses of the Oireachtas, it will pass through the Dáil and the Seanad by Saturday evening and may then be signed by the President. The Finance Bill is even more important this year than in previous years, following the Government's agreement with the International Monetary Fund and the European Union that its passage is a primary condition for drawing down the bailout funds. There was majority support for the budget on 7 December last. Fine Gael opposed the budget and voted against it. We believe there continues to be a majority in the House that supports the measures in this Bill.

We are debating the Finance Bill 2011 in difficult political circumstances. The Green Party has left the Government. The Government is in a minority. A general election is imminent. Fine Gael believes that only an election and a new Government will restore certainty to our country. We accept that control of the Finance Bill has passed from the Government to the Dáil. As the Government is in a minority in the Dáil, it would not win a vote of confidence if such a motion were moved next week. The position is more complex this week, however, because the Green Party wants the Finance Bill to be enacted. There is still a majority in favour of passing the Finance Bill, even though the Government no longer has a majority. Every political party must accept the consequences of the new situation. Fine Gael is prepared to hold back on its motion of no confidence so the way may be cleared for a general election after the passing of this Bill. Fine Gael and the other parties have agreed a debating schedule for the Bill, on the basis of an undertaking that a general election will be called early next week. If this occurs, I presume the election will take place on Friday, 25 February 2011.

While Fine Gael supports the new arrangements for the Finance Bill 2011, we do not support the Bill itself. We opposed the measures it contains on budget night. We will continue to oppose the measures in the Bill before the House. I suggest that approximately 95% of this legislation is a repeat of the measures that were voted into law by this House, by way of Financial Resolution, on budget night. The Finance Bill, in the normal way, will provide the ongoing legal framework for those decisions. There is very little new material in the Finance Bill, as published. The Minister had signalled that he intended to introduce some new material by means of Committee Stage amendments. He has now restricted his intentions to those Committee Stage proposals that he outlined in his speech.

The Deputies who supported the budget have a responsibility to ensure the safe passage of this Bill through the Dáil. Fine Gael, of course, will be constructive in its approach. There are some good proposals to which we have no objection. Other measures could be improved by amendments. We will table such amendments to improve the Bill. This Finance Bill is the last act of a crippled Government, which has brought this country to its knees over a three-year period. The Government may claim some credit for the fiscal adjustments made in previous budgets, but I believe they were rough, ready, rash and ill-conceived. The social or economic consequences of individual measures were not assessed. Some gain was made on the bottom line of the national finances as a result of measures that had appalling economic and social consequences. They reduced growth in the economy, cost thousands of jobs and inflicted pain and hardship on the most vulnerable people in our society.

In December 2010, Fine Gael proposed an alternative budget and four-year plan. Our plan was based on four principles, the first of which was that we accepted the budgetary targets set out by the European Commission to correct Ireland's fiscal imbalances. We are all familiar with these: that the debt to GDP ratio should be less than 3%, first by 2014 and now by 2015, and that the correction should be front-loaded by way of an adjustment of €6 billion in 2011. Fine Gael is committed to those targets. The work remaining over the three subsequent budgets, then, is an adjustment of €9 billion in fairly even tranches.

The second principle on which we based our alternative budgetary strategy was that the correction should be made by a combination of expenditure savings and tax increases. Fine Gael believes that the correction should be achieved principally through expenditure cuts rather than tax increases — I will return to this — and we suggested a proportion of three to one. The Minister in his budget introduced 65% — about two thirds — of the tax increases envisaged in the memorandum of understanding with the IMF and the EU in the first year, so the balance has changed slightly. However, we are still committed to making the adjustment, by and large, through cuts in expenditure so that we do not have to increase taxes unduly.

Our third principle is that each budgetary measure should be examined and politically, socially and economically proofed so that the social consequences of each proposal are known and we do not enter blindly into proposals that would hurt many vulnerable people, as has happened in several budgets in the past, sometimes because Ministers were callous and on other occasions because they were careless and did not realise the impact of the measures they were taking on the most vulnerable in society. Those who talk about list systems for elections to this House and ways of bringing in an elite of super-qualified people should always remember that Deputies learn the nuts and bolts of Irish society while they are doing their normal advice work in the clinic, and they would not make the silly mistake of bringing in measures that had not been thought out and that hurt the most vulnerable people in society if they were in contact with their constituents.

Hear, hear to that.

The fourth principle is that the economic consequences of each proposal should be measured to ensure it does not have an adverse effect on growth and job creation and, preferably, that it has a positive impact in these areas. These are the principles to which we applied our thoughts when we were introducing the alternative budget. I suggest that it was a more carefully thought out document than the Minister's budget, which fails on many of these headings, especially in its lack of measures to promote growth and job creation and its callousness about measures that affect the most vulnerable in society.

Fine Gael is committed to meeting the targets set out in the bailout package agreed by the IMF, the EU and the Government. If the Finance Bill goes through, the initial adjustment of €6 billion out of a total of €15 billion will be under way, and with proper fiscal controls over expenditure and proper financial management of Votes in the Department of Finance, the targets should be achieved.

I accept that arising from the passing of the Financial Resolutions on 7 December last, the Government made concrete commitments internationally and domestically and any resiling on these policies now could have serious financial consequences. However, there are different roads to the same destination, and the Minister for Finance should be open to accepting amendments which would have the same yield or impact on the deficit but a better social or economic impact.

There are many measures in the Finance Bill which are difficult to accept. The universal social charge and the extension of the tax net to capture persons on quite low incomes will impose severe hardship. I agree with the Minister that 45% of the workforce not paying tax is a large proportion which is not to be found anywhere else in the EU, and some widening of the tax net was necessary, but he went down to a threshold that was too low. The floor for the universal social charge — about €4,000 — represents a very low income, and the Minister should accept an amendment to raise this threshold, perhaps by €1,000. He should also indicate in his reply to Second Stage whether he will amend his proposal to exclude persons with severe disabilities or illnesses from the charge. Widows should also be exempted if we are to restore thestatus quo ante. I am aware of the intention of the Minister to move an amendment to exclude persons on medical cards. This is a move in the right direction, which is welcome.

The Minister indicated in his Budget Statement of December 2009 that he would be introducing a universal social charge, so it was well signalled, although it excited very little discussion at the time. He has now introduced the charge, but the provisions are rough and ready. The incorporation of levies and other payments into one charge has a regressive impact, with high-income persons paying less and low-income persons paying more. I had written my speech before I heard of the Minister's second amendment. He is now taking into account the advantage bestowed on high-earning self-employed people and introducing an additional 3% levy for persons who are self-employed and have an income of more than €100,000. However, he is catching and penalising a new section of society. I remember from the debate here that a person had to be receiving almost €200,000 before he or she was a beneficiary of the new provisions, and the real benefits were bestowed on people with incomes of half a million or three quarters of a million euro — members of the Law Library or those who had been working in tribunals for 13 or 14 years.

Fine Gael believes that the fiscal adjustment should be achieved preferably through expenditure savings rather than tax increases. We feel strongly about this because Fianna Fáil and other parties in the House have been cautious in cutting public expenditure. The Minister has been particularly light in his proposals on public service reform, although he tried to disguise the impact of what he was doing. He made a commitment to reduce the numbers in the public service, which stand at about 310,000 at present, by 26,750 — almost 27,000. However, he took 2008 as his base year, and when we examined it we found he had achieved more than half the target already through natural wastage. Thus, the commitment was really to reduce the complement of public servants by 12,000 over a four-year period. Three thousand a year is a very light commitment to public service reform and to the reduction of the public service payroll by concentrating on the numbers. As the Minister knows from his experience, anyone in private industry will tell one that if one wants to control the payroll bill, one has two choices: one can cut pay, or one can cut numbers. The Minister cut pay in his initial budgets, and I do not think he should cut public service pay again, but he should concentrate on the numbers.

The connection is this: if one does not cut expenditure, one must implement higher taxes. The parties that advocate the fewest cuts in public expenditure are the high-tax parties. We are not a high-tax party, and we oppose this. We are not saying on a whim that adjustments should be made principally through cuts in public expenditure. It is because the alternative is to implement higher taxes, taxing people out of employment and creating more unemployment. Everybody in the House understands the point I am making. This is the principal reason the budget, the Finance Bill and Social Welfare Bill had such severe consequences for the low-paid and those on welfare. If the Government had done more to cut expenditure it would not have been obliged to cut the pensions of the blind, the widows and the disabled. It gained about €90 million from those provisions. We are not discussing the Social Welfare Bill today but I am making the point that more cuts and savings in public expenditure give us the headroom to go more easily on the most vulnerable. The end result of a high-tax policy and cuts in social welfare is that the most vulnerable in society get hammered. Sinn Féin Members preach about going to stand up for the poor and those on low incomes, but when their economic policies are applied to that category of people, the result will be the exact opposite because they will be forced into implementing high taxes, which affect the poor more severely than any other category of society.

Our other principal objection to the budget and the Finance Bill is that there are no real measures to encourage jobs and growth. The business expansion scheme has disappeared and there is now a commitment to introduce it by ministerial order. If the Government has this order ready — it seems to have gone to Brussels — will it publish the text of it so we can know what we are discussing, even though the Minister is not introducing an amendment to this effect?

I have also argued that each sector of the economy should be stimulated by low cost supply side measures, many of which are tax based. Again, there is nothing in the Bill of a supply side nature based on taxes. We have to play to our strengths, and the Minister has been over this ground several times. Manufacturing industry is going well, tourism has great potential and the food industry will have massive potential when quotas are abolished in 2017. Progressive farmers are investing already to produce more food and there is enormous capacity now because of the removal of quotas in that industry. The financial services industry has held its place, despite Ireland's adverse reputation. It has lost very few jobs and is at a point of growing again. The IT industry as well as the pharmaceutical industry have the potential, too, for additional growth in job creation. I believe these sectors should be stimulated by low cost inexpensive supply side initiatives.

The Minister referred to Ireland's lack of competitiveness, and even though some ground has been gained we are still not back to where we should be in terms of job creation. However, I have not read a Minister's speech in the past 20 years that did not deal with the lack of competitiveness in Irish society. Why is something not being done about it? There seems to be no will to drive the agenda to make the country competitive — to restore competitiveness and to create jobs. There seems to be very little interest in doing small things. I gave the Minister an example on budget night, and I shall give it again. There is an argument to the effect that research and development would be stimulated and inward investment encouraged if the write-off of tax that is allowed for research and development investment was not only available against corporation tax but also against employer PRSI payments. If it were done through tax and if the investment were made in only one year, it would not be possible to get the benefit. The cost involved would be very little, but it is an issue for companies involved in research and development. Minor measures such as that would give an advantage to the IDA package when seeking to attract foreign investment here.

Of all the Government failures, the banking fiasco is undoubtedly the greatest. It is difficult to see how the country can prosper without a thriving banking sector, and yet every policy initiative taken by the Government has made the situation worse. The resolution of the banking crisis is now embedded in the IMF-EU bailout, and Fine Gael in government is committed to renegotiation of the terms of the package. In the general election we are seeking a mandate from the Irish people to conduct this renegotiation. There are three elements to it.

Fine Gael wants to replace specific conditions in the memorandum of understanding with measures more acceptable to us which we believe will have better social and economic impact. We also realise that any replacement measures, however, will have to have the same impact on reducing the deficit as the ones contained at present in the memorandum of understanding. We have been assured by the IMF and the EU that they are open to this approach, despite the protestations of the Minister over many weeks when he attempted to throw cold water on any attempt by an incoming government to renegotiate the bailout package.

Fine Gael wants a lower interest rate on the Luxembourg base fund which is providing much of the money for the bailout package. At 5.8%, the interest rate is too high and is almost unaffordable. We need, in the interests of the country and to restore the economy to growth, to have it at a lower level. The interest rate is 300 basis points, 3%, above the cost of the funds. The first tranche of funds into Ireland was raised on the markets at 2.9%, almost 3%. Recent discussions in Europe have indicated that policy is changing rapidly and the new arrangements for the fund envisage a lower interest rate. This is a welcome development and I hope an incoming Irish Government will succeed in negotiating an interest rate reduction. When we suggested this a couple of months ago, the Minister shouted "mission impossible" and did not pursue it. Only last Wednesday week in the House, in reply to a priority question, the Minister treated me with scorn and dismissed out of hand any possibility of negotiating with the 26 other member states to get a reduction in the interest rate. On the following Monday night I saw the Minister on television in Brussels, where he was talking up the possibility of a reduced interest rate. He was now the great negotiator and was going to achieve this.

I cannot understand that the Opposition can be aware of what is going on in Brussels by reading the quality financial newspapers and the Minister and his officials are not and have to reverse engines over a weekend when such matters are pointed out to them.

The Deputy should leave the Minister's officials out of it. Leave that out.

We should blame the Minister on his own then.

Make foolish political charges, but please do not bring officials into this.

Allow the Deputy to make his contribution, please.

I will not bring the officials into this if the Minister gives me a commitment that he will publish in advance of the election the report on the Department for Finance and whether it is fit for purpose. I am not going after officials. It was a passing remark, and facts are facts. If the Minister went to Brussels and did not know what he was doing, either he was to blame or he was not briefed. If the Minister wants to blame himself, I accept that fully and if he was fully briefed but had not the time or inclination to listen to his officials, that is grand.

They were foolish political charges; that is all they were.

They were not foolish political charges, and I can take him through it if he likes. Is he aware that an IMF team was in Spain a fortnight ago and that they are negotiating a low line of credit, which is in the IMF's remit? Is he aware that they are making special arrangements for thecajas in Spain, which somebody described to me as being the equivalent of 90 Irish Nationwides, with colossal insolvency problems, and yet they are getting money at a lower rate? Is he aware of proposals coming from Europe that moneys should be provided to the Irish and other authorities so they can buy their own debt? Is he aware that the senior bank debt we are pledged to redeem, at the moment, at 100% is being sold and discounted on the markets at 80%? Is he aware that what he has pledged to redeem, at100% is being held by hedge funds in New York, London and Luxembourg which stand to make a 25% capital gain on the basis of the commitment the Minister has given and stood back from, to redeem them all at par.

I accept we cannot act unilaterally on these issues, but at least the Minister should be aware of what is going on around him and should be in on the negotiations, because deals will be done. The policy is moving very rapidly and it seems the Irish Government is not even at the table. That was the final point I wanted to make. I do not have to read the piece on the script, but I believe the third piece of renegotiation we have to be involved in is with the holders of unguaranteed senior bank debt. They have to become involved in sharing the burden. It is a principle of capitalism that the rules of moral hazard apply to both borrowers and lenders. Those who lent recklessly and those who borrowed recklessly should share the burden. At present, the only person sharing the burden is the Irish taxpayer. If I may misquote "Hamlet", the Irish taxpayer was neither a borrower nor a lender in this context. Yet, the Irish taxpayer is picking up 100% of the Bill. That is unfair and it puts an unacceptable burden on the Irish Exchequer and the Irish taxpayer. Due to the arrangements entered into and because of commitments given, we cannot move unilaterally on this issue. However, we will seek to negotiate a better outcome and a more acceptable solution with our European partners, the EU institutions and, particularly, the European Central Bank. It is quite clear people are concerned across Europe about these matters. Representatives of eurozone countries, such as Prime Ministers and Ministers for Finance, are particularly concerned and there are several proposals of different status coming forward. There seems to be a consensus emerging that better solutions must be found. An incoming Government will make sure we are in there, within the context of our European colleagues, under the umbrella of Europe and the umbrella of the European Central Bank — the monetary authority — seeking to negotiate on behalf of the Irish taxpayer to get a better deal. We are pleased there is such a movement of policy in Europe.

We know it will not be easy. We are not trying to say a magic wand can be waved to sort things out. There is a negotiating position we should not miss. There is a negotiating opportunity we should not miss and Fine Gael, as part of the incoming Government, has no intention of missing it.

I refer to some of the amendments being introduced. The Minister referred to the universal social charge in his interview on the "News At One". The Minister was very lucid and explained his amendments very well. I welcome the amendment on the universal social charge. We would find the universal fully charge acceptable if the Minister increased the threshold so that it does not have an impact on persons with an income of only €4,000. The second charge on higher paid people is also acceptable to us. The second series of amendments are a package of exemptions that are being restricted or abolished. One concerns a patent royalty exemption. It was a little generous but I think the Minister should apply it at 50% rather than abolishing it completely. Those that develop new inventions and patent them are a small group of people with an intelligence I do not doubt. They have a creativity and intelligence we should treasure and abolishing the measure completely is the wrong way to go. It was too generous but perhaps the Minister can consider an amendment to reduce it to 50% rather than eliminating it completely.

We have all been lobbied on the property related tax expenditures. The Minister went too far on budget night and should have suspended the benefits of these during the period of readjustment, allowing people to enjoy them again five, six or seven years hence. There was always going to be a legal challenge because there was a legitimate expectation the contacts would be fulfilled.

I referred to the business expansion scheme. I cannot see why the Minister is importing material into the Bill that will cause him grief. Taking one month off the payment of taxes by self-employed people and bringing the effective date from October to September will cause much grief. It will leave many young accountants redundant from October to Christmas because they will have nothing to do. They will be twiddling their thumbs and they will be let go. The farming community is particularly irate about this. The measure gains nothing. It might make it easier for the tax flow to be predicted by the Minister's officials but there are plenty of sources of data that do this. The Minister is looking for grief for no return and I think he should drop it.

The tax on student fees is a similar imposition. It was not announced on budget night. I do not know where the recommendations, which have the effect of keeping the children of the less well-off out of college, are coming from. They are being repeated so often that it sounds as if they are ideologically based. I disagree with them. This was a good scheme and abolishing it cannot yield very much to the Department. Perhaps the Minister brought it in as a paper tiger so that he can drop it under pressure from Deputy Lowry and Deputy Healy Rae. If that is the case, I can understand it. If he really intends enshrining this in law I recommend that he takes it out because it will become a lightning conductor and cause political grief.

I thank the Minister for Finance. I wish him well in the contest tomorrow. I always found the Minister a most affable, reasonable person.

What about me?

And the Minister's curate.

The curate is in another parish.

He is no longer Deputy Willie O'Dea's curate; he is looking for a new parish.

I thank Deputy Noonan.

I also wish the Minister for Finance well. He is a constituency colleague of mine and, while I have disagreed vigorously with the Minister on policy and particularly on the handling of the crisis and the building boom, I have never doubted his personal integrity. Nor have I ever doubted the personal integrity of the Taoiseach. I disagreed with the Taoiseach's handling of the economy but he wanted to do the right thing. Unfortunately, it did not work out that way and it was a disaster for us.

My party's support for the timetable for this debate can in no way be interpreted as support for the content of the Bill. We opposed the budget proposed by Fianna Fáil and the Green Party and we put forward a detailed, costed alternative. This would have provided a desperately needed economic stimulus, jobs, growth and tax and public service reform. The Irish public finances face a double crisis. We have a budgetary crisis brought on by the disastrous economic policy followed for the entire past decade and the distortions created in the tax code to promote the construction boom and we have a bank resolution crisis that has proved incredibly costly by the inept way it has been handled by the Government right from the start.

A proper budget strategy would have faced both crises head on with a twin-track approach. Instead, Ministers persist in the delusion that one crisis can be decoupled from the other while the truth is that the continuing shadow of the bank guarantee haunts every move and frustrates every effort to secure a transition to a manageable budget deficit and a path to recovery that allows the domestic economy to expand and create jobs. All other parties in this House voted for the bank guarantee scheme, not just Fianna Fáil and the Green Party in government but also, unfortunately, Fine Gael and Sinn Féin. They voted for the bank guarantee scheme and they unleashed a tragic sequence of events. It will take years of hard, dedicated work to undo the damage to this country and generations of our people to come caused by that unthinking vote on the night of the guarantee.

Today, Allied Irish Bank had to bow to the inevitable and delist from the Stock Exchange, yet another monument to the failure of the Minister's banking strategy. AIB will need another €5 billion handout from taxpayers next month. The Finance Bill's weakness is the inherent imbalance and unfairness that lies at its heart. Ordinary citizens recognize that the public finances have to be brought into a more manageable state and that sacrifices have to be made to achieve that.

I have seen proposals from Independents and political parties that appear to offer only tax breaks and tax reductions and not contributions, which unfortunately are required from every citizen in this country, but when we recreate economic growth all our citizens, particularly those on lower incomes, can be the first to be the beneficiaries of the improved fortunes. Certainly, if the Labour Party has the honour to lead and serve in Government, that will be our absolute priority.

Ordinary citizens recognise the state of the public finances. They know that we must have money to pay our teachers, firemen, gardaí and nurses. What they cannot and will not accept is the overwhelming concentration of pain on families on low and modest incomes, whether they receive an income from work or welfare. This month, people are reeling from the impact of the universal social charge on their pay packets. I cannot understand why the Minister acted in such an underhand way in implementing this charge. While he mentioned it in the 2010 budget in December 2009, there was no White Paper, no consultation document, that would have allowed this new tax to be subject to preliminary discussion and scrutiny because it is no more than a tax by another name. Many of the detailed provisions of the charge are blatantly unfair, not least the perverse outcome that those on the very highest incomes come out of it with a net benefit.

I accept that the Minister has today relented in agreeing to a small concession for those with medical cards, although I wonder whether this has more to do with swaying members of the Fianna Fáil Parliamentary Party than with easing the burden on taxpayers. Realising that a serious problem would arise in the levying of this new tax on medical card holders, I highlighted this on budget night but it is not the only one. I must also mention widows. I advise the Minister in the constituency that he and I share there are many not only older widows in receipt of social welfare incomes but, unfortunately because of the murder rate, road accidents and other tragedies, many younger widows. I ask the Minister to reflect on that when he brings in amendments tomorrow.

In regard to the universal social charge, I read the ESRI report, which was the only one that was done in a way that was cost neutral, which is very different from what the Minister did in the budget. When one calls a measure a universal social charge, there exists a principle whereby such a measure was originally called a universal social contribution. The idea of it dating back to the 1930s is that it was fundamentally linked to the concept of social insurance to provide that a working man or a working woman, having contributed during his or her working life through PRSI, or a stamp, as people use to call it a long time ago, or through a universal contribution, would get some benefit when they became ill and or unemployed, or retired. When the Minister decoupled the universal social charge from social insurance and made it a tax, he made a profound mistake and that is the reason he should have introduced a White Paper and carried out a cost-benefit analysis of how this charge would impact on people.

The Minister, Fianna Fáil and many parties in this House must recognise the change that has happened in Ireland, namely, that many younger people both want to be and must be self-employed because work patterns have changed enormously. If they are self-employed, either by choice or because that is the only structure that is available to them, and if they pay, as many have done, their social welfare contribution and PRSI, unfortunately if they become unemployed, they will have no fallback position and no entitlement. Many people who are self-employed are on very modest incomes of €25,000 or €35,000. The construction industry collapse has laid many of them low. There are people living in fairly large houses, particularly in the Leinster region and in other rural areas outside cities and towns, who sometimes have hardly the money to put a loaf of bread on the table because they have to pay off the mortgage and they have no entitlements to income support because of the fact that they are self-employed. Such provision would be costly, but it is one of the major reforms that will face a new Government in taking into account that 20%, 30% or 40% of our population will most likely be self-employed in future years.

We cannot envisage in this situation a country where a person who is self-employed not having a social insurance mechanism through the State, to provide a contribution for when that person becomes unemployed or ill. That is a fundamental mark of a social democratic society and it goes back to the Beveridge principles at the time of mass unemployment in the 1930s. Unfortunately, Fianna Fáil and the Green Party as they exit office have left this country with a mass unemployment problem of the kind that we never thought we would see again.

The Deputy's party presided over unemployment when in Government in 1987.

Parents are grieving——

It was up to 20% at that time.

——over the fact that their children have to go abroad — not to train, learn or gain work experience — and that many of them may end up making their homes, have families and live their lives abroad. When the Minister of State canvasses at the doorsteps, I am sure he will meet that grief of parents who only see their children come home at Christmas or for a family celebration. These are issues that every party in this House must face. If we are a society, a meitheal and a community, we must think about how we protect everyone who lives in this society.

We must create jobs and employment. If the Independents and those who are members of smaller parties, which consider themselves on the left in this House, want to feel angry with the Labour Party because we have been proposing job creation and reform that would take account of the changes in Irish society, I invite them to seriously think that these are challenges that we have to face, that there is not an easy answer and that there is a cost and a burden which must be shared in a fair way. That is a fundamental principle for the Labour Party. I would point that out to those people who consider themselves to be left wing and who believe the whole business can be torn down and somehow or other the money will be found to pay teachers, nurses and social welfare income without thinking it through.

The Minister has provided for an economic impact study on the curtailment of property-based tax reliefs and has kicked the can down the road in regard to the abolition of these reliefs. It seems that some of the lobbyists who are selling property-based tax schemes are accountants, some of them tax lawyers and some of them brokers. I have received, as I am sure every Member of this House has, letters from people organising these schemes, some in respect of charities for private hospitals and so on, and all I can say is that it was with remarkable ease that they could bend the ear of Fianna Fáil within a space of seven or eight weeks and have the change postponed. Measures for tax exiles were announced in December 2009 for the 2010 budget. They will not raise a single cent until this October and there is no target for what these fortunately wealthy people should contribute to the tax basis in Ireland's hour of need. If we are all in this together, we should all make a contribution. If we all make a contribution, we can keep the contributions and tax rates moderate and modest.

This thinking contrasts with that informing the universal social charge, which was announced on budget day. By contrast with the changes to the tax code in respect of tax exiles and the phasing out of the property-based tax reliefs, the universal social charge hit payslips from 1 January. People opening their payslips this month, including those retired on private and public service pensions, were shocked. A husband and wife on a public service or private pension of €40,000 per year must pay an extra €2,000 per month in taxes and through the universal social charge. If such people, who are probably between their late 50s and mid-60s, are in the VHI, as is quite likely, they will be paying an extra €800 or €900 per month out of their after-tax income to retain the health insurance coverage to which they subscribed faithfully for most of their working lives. What we need is a full social and economic impact assessment for the introduction of the universal social charge, particularly taking into account the impact on the low paid. I will be tabling a Committee Stage amendment to that effect.

Taxes require a basic sense of fairness to be accepted. Higher taxes are never popular and the swathe of new taxes and extra burdens on families that run through this Finance Bill leaves a very sour taste in the mouth. This is because the people rightly feel in their bones that all the revenue they raise will add nothing of value to the State but disappear into the black hole created by the banking bailout and the payments of the Fitzpatrick-Fingleton and NAMA debts.

For years, I have promoted one taxation principle in this House, that is, that tax rates should be as low and moderate as possible, and that everyone should pay his fair share. This Bill does nothing more than bowdlerise and distort that principle in a totally outrageous way. It brings many lower paid people into the tax net but fails completely to provide balance by requiring exactly the same principle to apply to those on much higher incomes.

When it dawned on the Minister that the universal social charge was desperately difficult for many on medical cards, which realisation I welcome, he responded by halving the rate applying to medical card holders, at a cost of approximately €80 million. He was able to achieve this by increasing, by an extra three percentage points, the universal social charge on those with an income of over €100,000.

As Fianna Fáil and the Green Party leave office, the higher rate of income tax of 41% and the standard universal social charge of 7% combine to give a standard rate of tax of 48%. When combined with the additional 3% applying to those earning over €100,000, the percentage amounts to 51%. The PRSI rate of 4% brings the figure to 55%. That is a very high marginal rate of tax.

The Labour Party is proposing over 60%.

I want to conclude. The Minister of State is wrong in saying that.

The Deputy should be allowed to make her contribution.

That is the marginal rate in the Labour Party's policy.

The Minister of State should allow every Member to make her contribution without interruption.

Fianna Fáil cannot distort the disastrous circumstances in which it has left this country.

The Deputy should not misrepresent her own policy either.

The Minister of State can whinge however he likes but he should note that he and his party have left this country in an appallingly difficult position and ruined the employment and business prospects of many families and individuals through their disastrous bank bailout.

The income tax increases and the universal social charge introduced in this budget bring to 55% the top marginal rate for somebody earning over €100,000. The standard rate for those incurring a universal social charge of 4% to 5% has risen to 24% or 25%.

The Labour Party is proposing a higher rate.

No, we did not.

The Minister of State should not shout down the Deputy.

We proposed no increase of any such scale. Except for people at the very high end of the scale, in respect of whom the Minister has introduced a change today, there is no scope for further tax increases, including for those on low and middle incomes. Perhaps there will be some agreement in the House in this regard. Fianna Fáil has hiked taxes to an extraordinary level through its changes.

What Fianna Fáil has done——

Deputies should speak through the Chair.

Fianna Fáil has left a range of loopholes——

That is extraordinary coming from the Labour Party.

——that allow people who are very wealthy to pay advisers to mitigate or reduce their effective rate of taxation.

The measures to dismantle the vast range of tax shelters are timid at best and some have shamefully been deferred until another day. As a barrister, the Minister must know the principle——

The Deputy is incorrect again.

——of fairness in regard to tax, yet he has left it to one side in preparing this Bill. Tax justice is absent from the Bill. On foot of the Bill, the little people will carry the burden, as always, and will be squeezed under every possible heading. They are being squeezed by the universal social charge and the reductions in tax credits and the minimum wage. Vast guaranteed sums are being paid every month to bank creditors while the people on the very highest incomes are protected and mollycoddled in every possible way.

Some €805 million is to be paid to bondholders of Anglo Irish Bank next week as their bonds mature. To put this in perspective, Irish taxpayers are, in a single month, forking out to professional investors in a bust bank almost the same amount as the total amount secured by welfare cuts introduced by Fianna Fáil for all of 2011. Therefore, there is no balance in the Bill, nor is there a genuine sense that we are all in it together.

We were promised measures to cut bank bonuses and place a confiscatory tax of 90% on them. However, this promise is absent in the Bill. It is silent on the pernicious practice of giving bonuses and the Department of Finance has been woefully ineffective in supervising bank bonus payment practices to the point where the Bank of Ireland has been able to withhold information on payments it has made since the State guarantee of September 2008. The Minister told me there is a very detailed and urgent investigation ongoing. In his reply, will he update us on the status of this investigation?

When it comes to choosing between the bankers with their bonuses and their inflated salaries and the young unemployed, and between universal charges for the many and tax havens for the few, I know which side I and the Labour Party are on. The Minister said in his speech that everyone must pay according to his means, yet this Finance Bill maintains all the distortions that diminish progressive taxation and even exacerbate some of them further.

The news from the United Kingdom this morning must give us all pause for thought.

The general consensus is that economic growth will slow, but that there will still be a general small increase. Britain's economy suffered a shock 0.5% contraction in the last three months of 2010 before the full impact of new taxes and spending cuts become apparent.

The central charge against this style of austerity politics is that it hinders the essential need to foster growth. Austerity as the sole component of policy is the naked triumph of ideology over economic pragmatism. The public who must endure falling living standards, higher taxes and rising unemployment rates may well be sceptical that there is any prospect of future growth if the policy is as unsuccessful as shown in today's UK results. This is the reason for the extraordinary level of saving and paying down of debt in Ireland. People are afraid to spend due to austerity measures and cuts. The economy is desperately vulnerable and fragile. The need for a plan B must dominate the election debate. We have had enough of the tired old mantras, namely, that there is no alternative and that Fianna Fáil's plan is the only game in town.

Regarding the EU-IMF deal and our banking crisis, the latter of which is well over three years old, the Government has rubbished thoughtful contributions from a host of commentators, such as William Hutton, Joe Stiglitz and Simon Johnson, who have concluded that the terms of the EU-IMF deal are impossibly onerous for Ireland. Renegotiating a better deal for Ireland must be the immediate priority of the next Government.

To address those who did not want a Finance Bill to pass, Ireland shipped an incredible amount of negative comment in the international press during the past week or two. Some of it bordered on the racist and some of it reminded me of 19th century Punch and Judy cartoons. The Labour Party took the view that, if the Dáil so voted, the Finance Bill should be passed by Saturday night and the people should then be given their vote in a general election. Foremost in my mind as I went to meet the Minister for Finance and delegations from other parties yesterday afternoon was my desire to not have to see yet another Sunday of negative commentary, as that is the big day for economic and political commentary on American television and radio. After last Sunday, I received numerous calls from friends and business people who I know in the US asking me whether we were okay.

There is a reason to proceed with this debate. Labour opposes the Bill, but it must be debated on the floor of the House to show our friends in the US and elsewhere, particularly friends who may be interested in investing in Ireland and employing some of our well educated young people, that we have a functioning democracy, albeit one that needs a great deal of reform, and are capable of ordering our affairs.

I remind the Deputy that she has two minutes remaining.

A new Government can renegotiate the terms of the EU-IMF bailout. We are paying a penalty interest rate on the EU elements of the package. Where in the EU treaties is provision made for countries to pay penalty interest rates? This morning, the IMF issued a welcome statement in its updated Global Financial Stability Report. The IMF highlighted the "adverse sovereign-financial loop" where the effect of sovereign governments using taxpayers' money as a backstop for bank losses is to undermine the ability of the sovereign to fund itself. The IMF and others have already begun to outline a series of actions and measures, such as buying back debt, lowering interest rates and lengthening the timeframes of packages, to allow EU countries to deal with this grave crisis in a collective and cohesive manner.

The bond markets are reviewing the debt exposure of all countries. The Fianna Fáil-Green Party Government and the Fine Gael and Sinn Féin parties, which unfortunately voted for the bank guarantee——

——made a fatal decision to join the debts of Irish banks to the hip of the sovereign State on the night of the guarantee. This has damaged our credit rating. If people do us the honour of voting for a Labour-led Government, we will spend morning, noon and night renegotiating the terms in conjunction with allies throughout the EU to make the social democratic model of good public services and strong private sectors possible. This would provide work and business so that people could prosper. This is what the next election will be about and it is the basis of the mandate the Labour Party will be seeking when the people vote in the next three to four weeks.

I am glad that we were able to order our business to debate and, I hope, pass this Bill into legislation by the weekend. It is significant that four parties in the House were able to come together to agree in this respect. After the budget, I told the House that it was time we started acting as a parliament with a certain respect for all parties. In my ten years as a Deputy, it has been my experience that there are good people and people with failings in each party, including my own. We do not do our work or the role of politics a service by tearing lumps out of one another. There are benefits to showing that we can work together in the common national interest. Yesterday was the best example of this. It was a critical moment, given the risk that we would fluff it and bring the Parliament down in a way that would have added to people's dismay about recent political developments. That the Fianna Fáil Party was able to compromise backs up the Taoiseach's statement this morning that his motivation is to conclude this task, which arises because of the economic crisis and the mistakes of recent years.

I thank the Fine Gael Party for its swift response to the approaches we made to it this afternoon. We were seeking a way to step back from the party political point-scoring game in which parties were becoming embroiled. We sought a mechanism that would allow a debate in which we could air our differences, but through which we could also reach a common understanding that the Finance Bill must pass.

I listened to Deputy Burton with interest. It is possible that the electorate will return a result that will see the Labour Party take part in government. We should not be categoric in this regard because nothing is certain. The people are uncertain about politics. As my party leader, Deputy Gormley, stated, we should have an honest election in which different alternatives are set out.

In that regard the Labour Party also realised yesterday that the time for the politics of anger is coming to an end. It is time for plan B and the politics of outrage and anger is not that plan. Despite the difficult circumstances, any Member who has the good fortune to be appointed a Minister in Government — I recommend that anyone offered a place should take it — will be forced to operate in a very different financial situation. The actions of the Opposition parties yesterday and today show they are beginning to realise this.

It is important that this Finance Bill is passed as it will help to create an economic environment which may help a new Government as work remains to be done and real risks and challenges still exist. If that job is to be done well, it will not be easy as a new budgetary process will have to begin. Time is short. The country must enter into international negotiations and continue to complete the work of restoring our banking system which is a priority. Reform of the public service is also a priority so that public money is used well. However, it will not be easy to do this while at the same time reconfiguring the budget, particularly when there is a clear divergence of view between the Labour Party position — which is to increase taxes more than to cut spending and the Fine Gael position which is to cut spending more than increase taxes. I do not know how this divergence can be overcome. If those parties form the next Government — because nothing is ever certain — I wonder how they will try to resolve that contradictory position which would be damaging to the country. It could delay the other important work that needs to be done. I presume this reality is what caused yesterday's coming together with a compromise from all parties which has enabled the House to deal with the Finance Bill and, hopefully, given the numbers, to pass it this weekend.

Before dealing with the details of the Bill, I will outline the broad economic context. Last year was an extraordinary and very difficult time, in particular for our people who have lost jobs, had their incomes cut and seen their children emigrate which is what hurts the Irish psyche most. We have seen emigration too often and for too long. We must stop emigration by means of good and clever politics.

One year ago the country was in a much better position. The economic prognosis was reasonably positive compared to what it had been the previous year when we had faced an immediate banking and liquidity crisis. A year ago it seemed that this had abated somewhat as a result of budgetary decisions taken the previous year and the decisions about the banks which were taking effect. Our bond spreads had come down, market confidence was restored and favourable international comment was increasing. However, this situation was reversed in the past eight or nine months. I refer to the Greek debt crisis which showed the scale of the European banking crisis. Ireland is an integral part of the European banking system and its part in the broader European banking crisis was much more significant than people may have realised. The wider economic and banking problem as a result of excess debt and leveraging affected Ireland very negatively. The delay, along with the increasing scale of difficulty associated with the likes of Anglo Irish Bank, further damaged confidence during last summer and early autumn.

Deputy Burton may have different views but I am not sure what her solutions are. In the past two and a half years I have never understood what the Labour Party would have done differently. Deputy Burton may have disagreed with the bank guarantee but it was a question of what to do when faced with the prospect of the banks being unable to open the next morning. It is all very well to say that they would not have decided on a guarantee for the banks but every other party supported it, including Sinn Féin and Fine Gael. What would have happened if those banks could not open? I have listened intently to hear what the alternative is but it has never been clear to me.

It is interesting that those coming from outside the country, the IMF, the European Central Bank or others, are broadly saying that the approach to the banking system was correct, that it took a standard formula of guarantee ——

They are not saying that.

——asset sale or asset management and capitalisation. Their criticism is that it was not done quickly enough and they could be right. It took a long time for the legislation to be passed and it took a long time to deal with the European Commission and to agree on what should be done with the likes of Anglo Irish Bank. The Green Party view, which was expressed last summer, is that it would be better to shut it down and I am pleased this is what has happened. However, there could be valid criticism that the delay, that timeline of six or nine months, in the process of the policy approach, further eroded confidence, given the increasing scale of the Anglo Irish Bank losses, which were horrific.

I watched a television programme last night and a person in the audience said that the country is in debt to the tune of €180 billion. I understand why people quote the debt figures which we will be paying off. In my view, we need to be careful because one of the processes that will need to be concluded soon is the further testing of the banks' balance sheets, the loan portfolios. From what I am told by those who have come here from the EU, the IMF and the ECB, the testing done last year by the Financial Regulator and the Central Bank is holding up and is regarded as very accurate. When such large figures of losses are mentioned I can understand that, given what has happened in Anglo Irish Bank, AIB and other banks, people fear the worst. However, it may not be as bad as feared when the detailed assessment of loans is completed. This may give a certain reassurance and provide more clarity as regards our level of debt to be repaid.

The uncertainty caused by the Greek debt crisis, and the delay with regard to the Anglo Irish Bank crisis, created uncertainty regarding the position of how bonds should be treated. Last autumn, the German Chancellor made some valid points in her comments that Ireland would have to look at the status of sovereign debt. These comments had a profound and immediate effect on confidence in our own debt position. The combination of those three events led to our difficulties in the autumn and the arrival of the EU and IMF, which I deeply regret and which shocked me at the time. As someone described it to me, it was like breaking up with a girlfriend, that feeling of sadness and shock. This was the foundation for the Green Party's decision that it was better to have an election, to try to overcome that shock and to reconfigure the path. We said that we had a critical duty, in the middle of a banking crisis that had to be resolved, not to call for an immediate general election because it would have been impossible to resolve the immediate banking crisis — which has now stabilised — and to complete the budget process.

That budget process and the four year plan had been carried out by ourselves alone without any outside advice. I was engaged in the process which was methodical and drawn out over several months in order to steer the country out of the economic difficulties. Over the past four years I have gained some experience in a variety of budgets beginning in 2007 when it was business as usual and similar to previous years. It was possible then to increase social welfare spending and that of other big Departments. Most parties in the House supported those measures. I saw the difficulties and the mistakes made in 2008 because of rushed legislation but I also saw the ability of a Cabinet of 15 people to work through a budget in 2009. This was very difficult but it benefited from the redrafting and redrawing and the questioning that the budget process allows. This process was repeated in 2010. The budget and the four year plan are products of this. While there will be disagreements and people will have different views, I challenge any group of 15 Members of the House to put together a budget which requires a €6 billion cut without making difficult decisions. I was proud the budgets in 2008 and 2009 were described by outside parties as being progressive in taxation terms. They very much pushed the tax burden on the wealthy rather than on those on the lower income spectrum. I find it very difficult to support provisions in the Bill bringing those on lower incomes into our tax system and cutting social welfare. It goes against the grain of the Green Party because we believe a society that is more equal in its pay is more stable and successful. Therefore, it is not easy to do this. However, I challenge anyone to show honestly how it is possible for us to start balancing our budget without having to take some of these measures.

Recently, the Governor of the Central Bank, Professor Patrick Honohan, spoke at an Institute of International and European Affairs event. He showed very clearly that the crisis and our economic difficulties are not purely to do with the banking crisis. There is an element of debt payment and difficulties with regard to it about which we will have to be clever as we manage it, but ultimately there was a fundamental mismatch in our tax and revenues because of tax and spending decisions over the past ten years that were not long term in their thinking and unsustainable. The Governor of the Central Bank stated that even if we did not have the banking crisis, a very difficult adjustment would still have to be made. The Finance Bill is a further step in meeting this challenge and it is one I support because I do not see an easier alternative.

Yesterday morning, I participated in a programme with Deputy Pearse Doherty and I told the Sinn Féin representative that he is complaining about cuts here but Sinn Féin is implementing cuts in the North. Deputy Doherty understandably replied that there they do not have the ability to raise taxes, as is the case. I will hold up this lack of experience for analysis. I hear an argument that this adjustment can be made by taxing higher income but I am afraid it is not credible. The amount of money that must be raised is not there. When we look at how much we need, we see it cannot all be raised through the very nice concept of a wealth tax.

Not on its own.

It is not there. Perhaps it is only through experience in government and having to look at and make such decisions and seeing where the money is and how one can get it that it starts to become apparent. Perhaps this lack of experience in the North of having to raise revenue means it is very easy not to——

Many economists agree with us.

They may but I am afraid that, with respect, I do not. I would also say, with respect, that it may come from——

That might be a good thing given your experience.

Deputies should refer their remarks through the Chair.

——an analysis that our entire capitalist global market system is wrong and we should break from it. This is a valid analysis. There could well be left-wing analysis on the modern capitalist market system showing that it is unfair and needs to be challenged. The difficulty we have with being able to impose a very high rate of tax while expecting to continue to bring in income and maintain employment in an absolutely mobile world where people can travel is, particularly for this country with its small open economy that depends on trade for employment, that we live and depend on the globalised market economy. Internet and financial services businesses are mobile to an extent that was not possible even five or ten years ago. I respect Sinn Féin's logical position that it does not agree with the world capitalist model system and I understand that. However, the reality of challenging it and stating Ireland is stepping off and taking a completely different approach bears a huge risk of even greater unemployment.

Pardon, Deputy Morgan?

Through the Chair.

I am enjoying the lecture.

I am just giving my view and participating in a debate, with respect.

Through the Chair.

Today, I listened to the Minister for Finance. We had a view on the progressive measures included in the legislation on decreasing inheritance tax and decreasing the favourable terms for the wealthy to avoid tax through pension schemes and on section 23 reliefs. Many reliefs will be removed through this legislation, which is important. To be honest, we were concerned that the economic assessment of section 23 should not preclude the introduction of such taxes this year and I was pleased to hear the Minister of Finance in response to an earlier question indicate, from my understanding of his comments, that he intends to introduce an amendment to make this possible. This is important to the Green Party. It is a recognition that we must be progressive and look to the wealthy people in society to pay their fair contribution. This is an important development.

I listened to what was stated earlier about the international negotiations and we must negotiate. From my experience and previous position in government, there was no lack of willingness to consider some of the measures mentioned earlier in terms of sharing the costs of bank debt. The difficulty was that we ran up against those international constraints and the fact is that we operate with huge ECB support. That support is very beneficial and kept us going through a real crisis, but it would have been threatened had we taken a unilateral course of action that could have been very risky and difficult. We sought that support and negotiated for it. If Deputy Burton is in such a position and can do it, I will wish her well and will support it, as other Deputies stated. However, she should be careful about promising in advance what may not be easily achieved. Let us go to international negotiations and examine what is happening in Spain and other countries and work in the European Union for a favourable outcome and renegotiate any debt position. I would fully support this. We would do this in a far better stead and in a much better negotiating position if we pass the Finance Bill because it would show that we are serious, can get our budget together and are capable of getting out of the economic difficulties we are in at present. This would put us into the best negotiating position possible and this is why I ask Members to support the Finance Bill.

Ba mhaith liom mo chuid ama a roinnt leis na Teachtaí Finian McGrath agus Maureen O'Sullivan.

The introduction of the Bill is seen by the entire public as a farce given what has happened in recent days. The politics that created the current economic mess cannot bring us out of it. Those politics are the politics of both Fianna Fáil and Fine Gael — the politics of cronyism and inequality and the politics that believe in dismantling public services, cutting incomes, socialising debt, privatising profit and deflating the economy.

These politics and economics will not deliver jobs for the unemployed, which should be our primary focus. They will not see the current crisis being used as an opportunity to build something better and fairer. They will see the gap between poverty and privilege widen. This is not a Finance Bill. It is a depressing end-product of a Government whose political career spans some of the most disastrous economic policies ever witnessed not only in this State, but throughout the world.

Every decision the Government has made over the past three years has compounded the economic crisis. The introduction and extension of the banking guarantee, the nationalising of the corrupt Anglo Irish Bank, the NAMA decision, the recapitalisation of the main banks without nationalising them, entering into the EU-IMF package to bail out the banks of Europe and the decision to pursue a deflationary cutting approach to public finances as opposed to a stimulus are all wrong and have compounded the economic crisis we are in now.

The Government has failed to protect the vulnerable and, most importantly in terms of ensuring economic growth, it is penalising rather than rewarding working families. Even worse is that hundreds of thousands of working families whose effort drives the economy have all but been abandoned in this Bill. They have been condemned to enduring higher taxes and more stealth charges, all to fund the policies of failure.

The Finance Bill is complicated legislation which affects every person in the State by levying tax on our citizens. It introduces charges and levies not mentioned in the budget, including new powers for Revenue, earlier tax payment dates for taxpayers and curtailment of existing tax reliefs such as the relief on fees paid for third level education.

It may seem astonishing that we face such economic and social deficits after 15 years of boom but these are the consequences of pursuing a failed low tax, low spend model which sought short-term gains from the speculative activity of a small but powerful golden circle. Choices were made in the late 1990s and in the early 2000s by Fianna Fáil that diverted the economy away from industrial upgrading and new investment priorities onto a path of speculative booms, a weakening tax base and public finances that were dependent on boom-time growth rates. Now, before the last curtain falls, Fianna Fáil is rushing through a stale Finance Bill which enshrines the vested interests of the well-off, developers and speculators.

We in Sinn Féin, unlike Fianna Fáil, the Green Party, Fine Gael and Labour, realise that it is not possible to reduce the deficit by adding to the dole queues, it is not possible to stimulate the domestic economy by cutting incomes and it is not possible to claim to represent the best interests of people by facilitating the passage of this disastrous Finance Bill. The charade this week by Fine Gael and Labour highlights their contempt for the people of this State. The Government is in minority and a motion of no confidence would have been the straw to break the camel's back. We would have got the general election the people are desperately demanding. Why the sense of urgency to push through the Finance Bill when the so-called Opposition parties are so opposed to it? It would be funny if the consequences were not so devastating for ordinary people.

Since 2007, Fine Gael and Labour have been scorning the Green Party for its acquiescence with Fianna Fáil in some of the most economically and socially crippling decisions ever seen in this State. They singled out Green Party backbenchers for their unfettered support, but at least they were upfront. Fine Gael and Labour have cheated the people by agreeing to facilitate the passage of this Bill. It is clear from Labour Party comments today that the negotiations for the programme for government have already started with the Labour Party already abandoning its pre-budget proposal to introduce a higher rate of tax on higher income earners. That makes Fine Gael and Labour equally culpable for the savage measures in this budget.

No party disputed yesterday the need for the introduction of a finance Bill after the general election to address the outstanding issues on civil partnership. Why not wait until after the general election to introduce a new finance Bill, one based on an electoral mandate which would be a single Bill addressing all the pertinent issues? When the whole country is screaming for political reform and when the Government has no mandate and the people want to see it put out, it is absolutely disgusting that the larger Opposition parties are rowing in behind Fianna Fáil to kick the people one last time. The people of this State want change. They do not want Tweedledee substituted for Tweedledum. There is no longer room for this type of politics in Ireland because we simply cannot afford it. The Opposition parties are trying to play both sides, but yesterday they were outed for the political frauds they really are. TheOxford English Dictionary defines to oppose as “To contend, fight, or argue against; to be antagonistic or hostile to; to resist or obstruct (a thing, person, action, etc.)”. Fine Gael and Labour neither resisted nor obstructed.

We have also heard the usual scaremongering from the Opposition benches. If this Bill does not go through as soon as possible, it will upset the EU-IMF apple cart. Heaven forbid that we do not draw down the rest of that funding for the banks so that generations of people, born and unborn, will be subject to levels of debt unseen here for many years. Heaven forbid that all those bondholders who gambled on our banks do not get paid. Heaven forbid that we get to re-evaluate the funding requirements of the State and re-evaluate our priorities. Do we live in a market or do we live in a democracy? The Government that negotiated this deal has collapsed and the lead party has imploded. We should scrap the business of the House, scrap this Bill and call an immediate general election. Let the people have their say. We are their representatives, not the representatives of the markets.

The purpose of the tax system is to collect finances to run the State, including providing services such health, education, justice and social welfare. A good tax system is fair — it taxes those who can afford it most and asks for less from those who cannot afford it. Our tax system has been undermined as a result of changes introduced by successive governments leaving us in a position where the tax take is insufficient to fund basic public services. Fianna Fáil has steadily reduced direct taxation on the better off, while increasing flat taxes, which is regressive and impacts most on ordinary people. At a time when economic activity has hit the floor and when the domestic economy is reliant on consumption and spending, why is the Minister stymieing the spending power of the very households that can ease the recession? Cutting the incomes of those who spend everything takes money out of the real economy and creates a negative spiral which in turn leads to decreased consumer spending, lowered income and profits, leading to falling PAYE and VAT receipts, leading to more tax hikes and more job losses.

While the Government has been transfixed with reducing incomes at the bottom, what will not move down is the value of the debts incurred by households. With lower incomes but the same mortgages and consumer debts, many families will be forced to default and face home repossession. Sinn Féin believes in providing high quality, free at the point of delivery public services and these must be paid for.

This State does not have a spending problem in its structural finances; it has a tax-raising and retention problem. Many people made vast fortunes during the Celtic tiger era, much of which was under-taxed owing to the extent of tax breaks introduced by successive governments. One of the biggest spins being pedalled by the Government is that we must extend the tax system to those who do not pay any tax, which compounds the ignorance of the Irish tax structure. Let us set one record straight: Ireland relies disproportionately on indirect taxation and always has. In 2000, indirect taxes made up 43% of all tax revenue; in 2008 it made up 42%. Given that indirect taxation is more regressive, it is clear that the Irish taxation system is regressive. This indirect and unreliable taxation system created the bubble and when it burst, it had no capacity to lift us out of the crisis.

The introduction of a universal social charge in the budget and the lowering of the tax bands to bring more people into the tax net and more lower earners into the marginal higher tax rate of 41% has unfairly targeted the least well off for tax increases. The decision to abolish the income levy and health levy and create a universal charge is a step backwards, which will drag those earning as little as €80 into the tax net.

The tax changes in this Bill are across the board and fail to target those who have the ability to pay, which is a big mistake and one that will be damaging for the economy and for consumer spending. We have outlined many changes that could have been introduced, but unfortunately I do not have the time to go through them here. It is clear that the axe has fallen where it poses least risk to the electoral fortunes of Fianna Fáil. A callous decision has been made to protect those who vote for and finance Fianna Fáil. The Bill stipulates that the key property restrictions can only be applied after an impact assessment is undertaken. Not only that, but it also provides for an interval after this assessment, presumably to allow for any adjustments to be made which may arise from it. It is an outrage.

Tá an t-am caite.

I shall finish on this point. It is an outrage that the curtailment of property tax announced in this budget has been deferred while the measures that will have the biggest impact on the least well-off have not been given any consideration as to their economic impact and will have immediate effect. This Finance Bill is a disaster and a political fraud has been enacted by Fine Gael and the Labour Party to pretend they are opposed to the Bill. At the meeting they told me and the Minister very clearly they want to see the Finance Bill passed.

Deputy Finian McGrath has three minutes.

I thought there were four minutes for each speaker.

No, the Deputy has three minutes and there are three for Deputy O'Sullivan.

We had 12 minutes which, with eight, makes 20 minutes.

We will clarify it and move along.

If the minute is available then Deputy McGrath may avail of it.

I thank the Ceann Comhairle for the opportunity to speak in this important debate on the Finance Bill. Before I go into the details of the income levy, the universal social charge, income tax, corporation and capital gains tax it is important to state I am completely disillusioned, disgusted and appalled by recent events in Irish politics. I do not blame any one person for our economic crisis. There is a collective guilt among the Cabinet, some bankers, some developers and greedy sections of Irish society who have left politicians to fix up the mess. People tell me they are appalled by what has happened to the economy and the future development of the country. They demand reform and leadership from politicians. Our people are crying out for sensible solutions not petty political point scoring or insulting jibes thrown at other politicians.

I say to Deputy Shortall or any other politician it is a total insult to describe other Deputies as a "rag-bag".

Deputies

Hear, hear.

It is offensive and degrading and insults the vast majority of Independent Deputies, councillors and candidates who are trying to serve our people and our country. Deputy Shortall should withdraw those remarks and with a bit of luck she might have a good, credible, Independent candidate running against her in the coming election.

Section 3 of the Finance Bill provides for the introduction of the universal social charge effective from 1 January 2011. It is proposed to impose on an individualised basis a charge of 2% on income up to and including €10,036, a charge of 4% for income in excess of €10,036 but not greater than €16,000, and a charge of 7% thereafter. The charge will apply to all income in a similar manner to the Tax Acts but including certain income which is statutory exempt from income tax. The charge will be applied before granted relief for pension contributions. Payments from the Department of Social Protection and a number of other similar payments made by other Departments as well as similar payments from other State estates will be excluded. I welcome that.

In regard to the broader issue of the economy there is some hypocrisy on the part of some political parties in this House. When we talk about trying to get out of this economic mess, jobs must be an important priority. Let us look at those people who recently began to spend a great deal of money on posters and leaflets. I challenge those who import such materials at a cheap cost to support small local Irish businesses. Let us have some practical economic patriotism at this time.

As part of the resolution regarding jobs, I would love to see a quality public service and supports for our small businesses. That is a crucial and essential point in this debate. One can see the impact of the new universal social charge and the reduction in tax credits. I am very worried that deposits are moving out of Irish banks and we also need to deal with this. People are fearful and when that is the case they lose consumer confidence. It is important to say this in the debate.

I hear a great deal about talks and renegotiation. I ask those who present such arguments where is the beef and where are the details.

I welcome the anti-tax-evasion powers of Revenue and the extension of such powers, which are positive points in the Bill. However, I have major concerns about the Bill. I have listened to many views on it but cannot support the legislation. I urge every Member to think again.

Deputy Maureen O'Sullivan has three minutes.

I, too, was supposed to have four but we will see. I thank Sinn Féin for sharing time with Deputy McGrath and me. It is an acknowledgment of how the seven of us have worked together and co-operated in the Technical Group in which now——

——due to a technical point we are precluded from speaking as that group. Speaking as a member of the so-called rag-bag collection of Independents, I wish to refer to my predecessor, the late Tony Gregory, who was one of the finest Deputies this House has seen. He was a man of principle and integrity and was guided by principles of fairness and justice. He was consistently returned in local and national elections for some 30 years. I find it very insulting to hear that word used in his regard.

It also insults the electorate which chose to vote for an Independent candidate.

I voted against the budget before Christmas and, being consistent, will vote against the Finance Bill. I accept we need money because the consequences of not having it are too appalling to imagine but there are too many harsh conditions attached to the Bill by the IMF and the European Central Bank. It is the IMF whose actions contributed to the destruction of economies in Africa, Asia and South America and seriously damaged the lives of people by its policy conditions. Its role has been to oversee the transfer of wealth from ordinary people to corporate interests.

This Finance Bill will lock us into a specific economic model, removing aspects of economic decision making. I do not see in this Bill a commitment to holding on to our natural resources — the Corrib gas field and our forests. I do not see the wealthy being unduly affected but I see severe cuts for the poor. I do not see a complete elimination of bonuses, excessive salaries and expenses and am not convinced that all tax loopholes have been closed. Those with disabilities are still living in fear, suffering the effects of current cuts and still fearing further cuts. The universal social charge has been causing major difficulty. I acknowledge the change made for those on medical cards.

Where is the insurance for those struggling with mortgages when those with several properties, bought to avail of tax relief, are being looked after? Where are the provisions for tax exiles to pay their just contribution? More people are being drawn into poverty yet €68.8 billion went to senior bondholders and €1.4 billion to subordinated bondholders. Why are these gamblers and speculators being cushioned from losses? Did they share the good times when they were making massive profits?

There has been no mention by anybody as to whether our corporation tax is fair. Where are the commitments and aspects of heritage towards ensuring, for example, proper and fitting preservation of the battlefield site of the Easter Rising for its 100th anniversary, a defining moment in our history?

I have sat here for a year and a half and listened to objections to Bills being guillotined. This most significant Bill is being facilitated by the main political parties through a type of guillotine.

The people should have been given their say on this and not only in the forthcoming election when the Bill will have been passed. It is the harshest budget in the history of our State and severe austerity faces us in the coming three years, perhaps for longer. The Celtic tiger is well and truly dead, replaced now by unemployment, poverty and emigration. More than €20 billion of the pension fund — working people's money — is gone.

The Deputy must finish.

It is reckoned that the Corrib gas field alone is worth considerably more than €420 billion, and there is possibly more gas and oil off our coast. What did our Government do? It gave it away to Royal Dutch Shell. Taxpayers' money went into the banks and it would now appear there is more concern for the bankers, developers and bondholders than for the ordinary people of this country.

Deputy Mary O'Rourke has 20 minutes.

I do not know whether I want them all. Deputy O'Sullivan might have had five minutes of my time.

It is not a bad idea that the Bill is being truncated. On many occasions in which I and others spoke on such Bills we went on and on, waffled and woofed and did everything we could to delay matters. This has concentrated minds wonderfully.

It has also brought forward a measure for which I am particularly glad, namely, the change to the universal social contract. When the Minister announced in his Budget Speech the universal social contract it had a benign ring to it. "Universal" meant all over. "Social" was a nice word and "contract" another nice word. I read it but knew there was more to it than met the eye. I certainly found this out when the first week in January came around or whenever the first wage packets hit people. The charge hit people on low incomes in particular. Soon enough the thread came through to everybody in the shape of the medical card. If one had a medical card one had been exempted from the health levy but suddenly the universal social charge with all its benign — not benign implications hit everybody.

I am sure there was not one Deputy in the House, wherever we sit, who did not make strong representations for an amelioration of the universal social charge. I am glad the measure has been thus ameliorated, as has been laid out in the Minister's speech. He states that the charge was introduced for a specific reason and there are two amendments, with those in receipt of a medical card seeing the top rate of the contribution reduced from 7% to 4%, the same as for persons over 70. The new rate will apply at 2% on income up to and including €10,000 and 4% on income above that amount. This move is welcome and I am very glad to see it. I am quite sure everybody in this House will contact the people who have been lobbying in regard to the issue, telling them of the change in the measure.

This may be the last full debate in this Dáil as this stage of the Finance Bill will be followed by Committee and Remaining Stages before hearing recommendations from the Seanad. After that we will be gone as if we had never been here. This Dáil would have lasted four years by next May, so we are now a year and three months short of the maximum tenure allowed. That is not too bad a distance to have run.

On an occasion such as this, when speaking about a finance Bill and the end of a time within the Dáil, we hear of so many Deputies retiring or deciding not to go forward for election. Many such people have medical reasons for this and I sympathise with them; if doctors have outlined the implications of undertaking a rigorous election campaign followed by a further stint in Leinster House, they should follow that advice. Many such people have children and families and are quite right to take the steps they did.

We do not know why the majority of the other Members are retiring. I do not believe it is because they are afraid of the fray as people in public life should not be afraid like that. I love the fray and I have done a certain amount of canvassing.

The Deputy frightened Senator Cassidy anyway.

That was an aberration which should not have happened. It was my fault entirely and that of the Fianna Fáil headquarters, which did not allow me outside the bridge in Athlone. That was an amazing direction but I have come a long and hard road since. There is much debate on the radio and elsewhere concerning new ideas from some wonderful people, like Ms Elaine Byrne, for whom I have great admiration. She is a young woman in Trinity College and is among the people who give of their opinions about democracy.

Somehow these people envisage a democracy that is not about knocking on doors and asking for votes; it is airy-fairy and nebulous, hypothesising that there should be some other way of getting elected. There is no other way than looking for votes, which is the most basic and proper way of electioneering. I am not referring to Ms Byrne in particular as she is just an example. She wrote a very interesting article recently inThe Irish Times in which I believe her tongue was in her cheek. She argued in the article that political creativity, like sex, is best left to the young. It was hilarious. As somebody much older than her I hope her sex urge lasts until she is older; it would be too bad if there came an age when she would be told that she had to stop. My goodness, we would be living in Gestapo country in that case. That is why I believe her tongue was in her cheek.

The point of the article was that we need political creativity, which may have to be left to a bunch of young people. I do not know about the fuss concerning young people. There was great twittering from Ógra Fianna Fáil but I did not see anything happening or any members putting their names forward. I did not notice them enamoured of the political scene orvice versa. Ms Byrne described William Butler Yeats in the article, who in his sixties had a sex operation. She did not state that but mentioned that when he had the operation he got a great rush of new poetic creativity; she forgot to say he was in his sixties when he had the operation.

This is not an out-of-kilter debate but is quite relevant in light of all the talk and trite debate which has gone on about a new type of democracy. It seems people will not be elected but will be plucked from the wonderful world of business and commerce and be plonked into ministries. If that had been the way five years ago, Seán FitzPatrick could well have been Minister for Finance or head of some other body. That would be if he was not deemed by some to be past it and to have lost political creativity.

There is much talk about how one cannot be a legislator and attend to local issues. That is not true, although much hard work is required. I know Deputy Arthur Morgan very well and he has fulfilled his obligations as finance spokesperson for Sinn Féin to his great credit. From people I know, it is clear he has also attended to his constituency duties. I have no truck with those who decry clientelism, as it is mentioned in a denigrating fashion. People ask why Deputies should look after people's rights or take up a cause when they should be thumping a table, putting forward amendments and speaking to legislation. We should do this but there must be balance that takes in constituency work, dealing with people before coming to this Chamber to do the national business. In modesty, it is what I have tried to do for the past four years. It can and should be done in this fashion.

Why should politicians suddenly lose touch with local people when they come to Dáil Éireann? I saw a big headline in theIrish Independent where the reporter indicated that she did not want to see a politician at her funeral. She would not see it anyway but her nearest and dearest might. I go to a funeral if I know the person who has passed away very well and count myself among his or her friends. I do not go fumbling at a coffin outside but I go to mass five minutes before it commences and hear it in its entirety because I wish to do so. I may speak to whomever I wish to before going home. The idea of the declamatory article was that there should be no politician at a funeral; this means a Deputy would not be allowed to do local duties in tandem with national duties, as that is for awful plebs.

The argument is that we should be in the Oireachtas the whole time and not be any way older if involved in politics. One seems to have to be young to be creative. It seems that even when a person passes away who is a very dear friend, a politician should not attend the funeral. We have allowed ourselves to be trampled upon by these people with so-called ideas. Ideas my eye, I have plenty of ideas. That has nothing to do with my age as I will always have ideas. I am always curious and inquisitive. I want to find out what is happening, although not through tittle-tattle but rather through what is good and proper in public life.

Those of us who have survived a considerable period in public life should stand up for ourselves because we did not get here idly.

One always hears about dynastic politics. The same lady who does not want any Deputies to attend her funeral has written an article about dynastic politics. It is anti-democratic to propose that anyone who has or had a relative in the Dáil should be precluded from standing for election. It is also an insult to voters. We come through a convention, stand for election and are either accepted or rejected by voters. It does not matter what one's surname is, one may as well stay at home if voters do not like the cut of one's jib.

I read a completely inaccurate article which stated that I inherited my father's seat when he passed away. My father had been dead for 12 years when I stood for the Dáil. Where does that fact leave that story? Those who write these types of stories need to do their research. When I first knocked on doors in Athlone I was better known as one of the local secondary school teachers. Students would answer the door and run to their mammy to tell her the teacher was calling. The Minister, Deputy Pat Carey, will have had the same experience. I wish him well in performing the multitude of duties for which he has assumed responsibility. I do not know how he will manage.

One can only try.

I will have to try to remember which ministerial hat he is wearing when I approach him. He did good work in the community sector in Athlone. It is a pity he is not running in the town because its people have great time for him.

They have erected a monument to him.

I hope their appreciation of the Minister's work transfers to me.

My advice to those Deputies who propose to stand in the forthcoming general election is to be stout of heart. I am quite sure I will not be back to the House. If I do not make it, I will not join the group of past Members of the Oireachtas but stay at home, write a book, mind my grandchildren, go for walks, have tea with friends, play bridge, read books and generally have a nice time. I still intend to retain my seat as I have no intention of joining any group of past Members, however well intentioned it is. Nothing could be worse than going over the things we said and did or did not say and do. Do I have time to kill a few more cows?

The Deputy has more than five minutes left of her speaking time.

We were told that new political movements would start up. I note Senator Shane Ross will stand in the general election as an Independent. I wish him luck because he would be a breath of fresh air in the House. Deputy Brian Hayes and I are familiar with the Senator from our time in the Seanad.

I understand a second economics guru will stand for the Fine Gael Party in the general election. If he is elected, the party will be massively challenged in all sorts of ways. Apart from that, we have not seen a mass movement. I do not see Fintan O'Toole or David McWilliams on the hustings.

Deputy O'Rourke should not encourage them.

Perhaps they will emerge as candidates. If they do so, they will get a dose of reality. Why are these wonderful gurus standing in what one could describe as "posh" areas? None of them is standing north of the River Liffey or in a rural constituency. They should be given a taste of reality.

We were promised much. The Dáil should be reformed during the next Government. The House should work normal hours, perhaps from 9 a.m. to 7 p.m. Such a change would be more a technical adjustment than a reform. It would also be useful if Deputies were able to obtain from Ministers in the House the up-to-date position regarding developments in their constituencies, for example, announcements of company closures. The Executive must not continue to be the top cat in every respect and leave Deputies to toil away. Much greater interaction is required between the Executive and Legislature.

As leader of the House, the former Taoiseach, Mr. John Bruton, introduced the committee system on my first day in the House. On that occasion, I decided that if I did not speak on my first day, it would be a long time before I addressed the House because one is told to keep quiet for a while and be demure and modest. I chose to speak and, in doing so, welcomed the idea of establishing a committee system. Since that time, the committee system has gone haywire. Committees which want to be noticed invite Mr. A and Ms B before them and everyone involved — Mr. A, Ms B and certain members — then engages in grandstanding before the whole thing ends up in a bottle of smoke. Only seven or eight committees are needed, each of which must have a definite remit and a timeframe within which it should complete its work programme.

I am pleased the referendum on children did not take place. The Minister of State, Deputy Barry Andrews, will have the relevant legislation ready when he leaves office. The Joint Committee on the Constitutional Amendment on Children, of which I was the Chairman, was a committee that worked well. All our meetings were held in private and we received approximately 185 submissions. We met various groups, discussed the relevant issues and arrived at a consensus. I pay tribute to the clerk to the committee who is present in the Chamber. She kept us focused on the relevant issues. It is a pity this Dáil will not continue for another month or thereabouts to enable the Government to have the legislation ready and hold the referendum on the day of the general election.

I thank the Ceann Comhairle for indulging me by allowing me to engage in a few rants. I hope they were appropriate to the occasion.

I propose to share time with Deputy Brian Hayes.

I like to listen to Deputy O'Rourke speak on radio programmes when I am driving late at night. She is honest and open and speaks her mind. I also enjoyed her contribution and would like to respond to some of her comments. I concur with the Deputy on the issue of democracy and the need to have public representatives of all ages. When I entered the Dáil at the age of 24 years I should not have been on my own. One needs people of all ages here. Journalists who argue that Deputies should be either all young or all elderly are wrong. One needs a proper balance, as one does with a football team. When one has a team of all ages one gets results.

As to the argument that national politicians should not do local work, people must realise that Deputies fulfil their role at national level. Members probably work for 40 or 50 hours each week on national issues, as is the case with members of other parliaments. In our system, however, many Deputies decide to do ten, 20 or 30 additional hours of local work. That is their choice under the system we operate, which I expect will change eventually, and Deputies will at some point focus solely on national issues. As matters stand, however, they perform a national and local role. As I have repeatedly stated, until local services improve and constituents do not need Deputies to intervene on local matters, Deputies will continue to provide a local service through their constituency offices.

It is important that Members do their job. While certain Deputies do not do any work on national issues — that is their business and the business of those who vote for them — the majority across all parties try to work on national issues.

On the issue of politicians attending funerals, people who are in business will attend the funerals of their customers. A pub owner will do his or her best to go to the funeral of a customer because he will have known and become friendly with all his customers. If a family member or friend dies, one attends their funeral. While I accept that some Deputies make a point of attending all funerals in their locality, the majority attend only those they should attend because they knew, were friendly with or worked with the deceased. When they write articles, journalists need to allow for the fact that, while some TDs are different, the majority act in a principled manner. While there will always be a few that may abuse funeral services, religious or otherwise, the vast majority do not. Journalists should make that distinction when they write articles otherwise it gives politics a bad name.

We will oppose this measure and I wish to tackle Sinn Féin on a few issues. That party knows quite well what is going on here this week. We want to get this Government out of office as quickly as possible. What went on here last week was embarrassing for the country and for me personally as a TD. Everybody in politics has good and bad days. Some days one may not be proud of one's party but it is a serious matter to be embarrassed about the national Parliament, which is what occurred last week. What happened was embarrassing and it was reported internationally. Friends in various parts of the world reported back to us saying that we were a laughing stock and looked silly. That had to come to an end. If we had not agreed to deal with the Finance Bill this week it would have dragged on for two or three more weeks. It was quite clear that the Greens were going to support it from the Opposition benches. They would have dragged it on for two or three weeks, while people would have been shouting and roaring, as well as motions of no confidence being tabled. It would have been a shambles with Fianna Fáil TDs who could not vote for Deputy Brian Cowen as their party leader voting for him as Taoiseach. Meanwhile, the Greens who left Government would still vote for him as Taoiseach. The Oireachtas would look even worse in those circumstances, so it had to come to an end. We do not like the idea of facilitating a Finance Bill, but that does not mean that we will support every aspect of it.

The same amount of time will probably be spent on the Bill, however. That is because over two weeks with all the argy-bargy that would have gone on, the Bill would have been debated for less time than will be devoted to it under this system. It is in the national interest to get the Government to hell out of here because the recovery cannot start until we get a change of Government. We are doing right to get the Bill through the House as quickly as possible.

When Sinn Féin Members try to lecture us about politics, they might take some time out to lecture their own leader on the economy. I heard Mr. Gerry Adams on the radio this morning but he does not have a clue when it comes to this country's finances. He showed it in 2007, when I thought it was a once-off mistake, but when I heard him this morning it was clear that he does not have a clue. He does not understand what he is talking about and he is misleading people. He is trying to do anger better than everybody else so that he will get votes, but anger in itself is not good enough. One must have proper policies and an understanding of the situation. I heard him say all we had to do with the €18 billion deficit was to take €4.5 billion out every year until the problem was solved, but that is not how it works. I am sure that Mr. Adams's colleagues know that. The €4.5 billion that comes out this year must also come out next year and every other year, but more money is required on top of that to reach the figure of €18 billion or €19 billion. It is not a question of repeating the €4.5 billion figure four times, and Deputy Morgan knows that. I listened to Mr. Adams this morning and could not believe what he said.

It is wrong for Deputy Doherty to suggest that my party is the same as Fianna Fáil because we are very different. Fine Gael has voted similarly with Sinn Féin on most of the banking issues, so we are very alike in our preference for burning bond holders, or certainly for negotiation. Sinn Féin should therefore not try to link us with Fianna Fail and say we are the same because we are not. Deputy Doherty knows that, so he would be better off lecturing his own leader. Deputy Doherty also mentioned equality. My party is all for equality of opportunity, which is one of our core values. We have fought very hard on that and always will. That is one of the main reasons we opposed the budget and this Finance Bill because they do nothing to advance the cause of equality. While one may never achieve full equality, one should always strive to reach that goal as best one can in the circumstances. This Bill could have gone further towards assisting equality and alleviate the pain felt by the most vulnerable, but it did not. It heaped more trouble on them, which is why we are opposing it. As with the budget, the Bill before us totally lacks a job creation strategy. I am sure that Sinn Féin and Labour will oppose it for the same reasons. One may go through the entire Bill but one cannot find anything that will assist in creating jobs.

In his speech, the Minister said the Bill will continue the process of stabilising our public finances, providing appropriate support to businesses and assisting the Revenue Commissioners. I do not know what the Minister means by "appropriate support to businesses". What does he consider to be appropriate? There is very little support for business in this legislation and certainly nothing in addition to what was already there. Small and medium indigenous enterprises have not received any help in this country. There have been small changes in PRSI to create some employment which is not even being taken up because it is too complicated. In addition, the idea was not sold properly to the business sector. I question what the Government is trying to do with this budget and that is why we will not support it.

On the radio earlier today, the Minister said there was no other option than his national recovery plan. He is wrong in that respect, however, because there are plenty of options. Fine Gael has proposed a different vision, which is based on a strategy of growth and job creation, not on cutbacks. Mr. Gerry Adams and others say that the bailout money is only for banks and that there is no real problem with public expenditure. That is also incorrect. Some €50 billion of the IMF fund is to run the country for the next three years. I am not happy with that but that is what it is for. To run the country for the next three or four years, while we try to reduce the deficit, we will be short €50 billion to €60 billion. That is due to bad Government and the mismanagement of public expenditure which has gone out of control without results or real reform. Thanks to Deputy Bertie Ahern, expenditure in most Departments went up by well over 150% from 2001 to 2008. Public expenditure rose in 2001 before the general election and again in 2006 before another general election, but there were no real long-term, lasting benefits to the country. In fact, it gave false hope to many people facing wage cuts, tax rises and increased borrowings. They were led up the garden path with false promises and unsustainable public expenditure commitments.

Sadly, the IMF funding is required. We in Fine Gael hope to get into government as quickly as we can to renegotiate that and make changes to it. We will target a couple of areas, including the interest rate which we cannot afford. No matter who is in government, in two or three years' time, this country will be faced with an interest bill of €11 billion. We will have to renegotiate that because the country cannot afford it, not to mind repaying the principal. In addition, many of the constraints in the document to provide savings are negotiable. The Minister, Deputy Brian Lenihan, should stop claiming that they are not negotiable because they are. The approach to making savings will be renegotiated.

In his budget speech and again today, the Minister purposely avoided clarifying the savings in the Croke Park agreement. When I visited the Department of Finance, together with my colleagues Deputies Brian Hayes and Michael Noonan, we asked the Minister what savings had been made as a result of that agreement. There have been none so far, yet we are told there will have to be massive savings this year under the IMF deal. I have seen no such plan. I asked the Minister if he had appointed new accountants and managers to drive these changes, but he has not. Nothing has changed, yet we are told that savings will be made as a result of the Croke Park agreement to deliver on the IMF deal. I cannot see it and it will be left to the new Government to try to put plans in place to drive such savings.

Fine Gael does not think the Croke Park agreement is a great deal, but we will try to use it to determine whether it can drive the reforms we want to achieve. Some speakers said that Fine Gael wants to slash public service numbers, but we do not. We want to take out 30,000 people over the next couple of years and believe that can be done voluntarily through negotiations. We do not approach things by sacking left, right and centre. We will do it logically, going through every little detail to see where savings can be made, as well as switching or moving staff, and doing a deal with staff members to leave the service. There are ways of doing that without taking a "bull in a china shop" approach or through forced redundancies.

I am disgusted with the Minister, who has renegued on his promise to tackle bankers' bonuses. When we proposed a 99% tax on such bonus payments, the Minister bowed to pressure and promised to introduce a 90% tax rate, but he has not done so. He had hidden away and yet again protected his own buddies. He is wrong and he has failed. He has repeatedly misled the House and has had to correct matters subsequently. Alternatively, he has changed his mind, done a U-turn and gone off in a different direction. I am fed up with it and so is the country.

Another contentious issue is the taxation status on student fees. It is wrong that people who will be faced with annual registration fees of €2,000 cannot claim tax relief on that sum. Other people may be paying €5,000 or €6,000 to attend a private college, because they cannot get a grant or a place in a public college, yet their tax relief will also be affected. That is wrong at a time of mass unemployment. People need to be encouraged to go back to education. We will introduce amendments to tackle it because it is wrong.

The last point I would like the Minister to consider overnight relates to personal retirement savings accounts. According to my reading of the Bill and the information I have been given, if one's employer contributes to one's personal retirement savings account, that contribution will now be subject to the universal charge and PRSI. That will mean an employee has to pay an additional 11% through various charges on the employers' contribution. At a time when we are trying to encourage people to invest in proper pensions, through the personal retirement savings account system, that is wrong. We need to ensure one is in a position to increase one's pension provision to provide for one's future and that of one's family. Perhaps the Minister has done this by mistake. The Minister has often reminded me to refer to him rather than to his officials. It is his responsibility. He has managed to do this. It needs to be corrected. We will tackle it by tabling amendments tomorrow.

It is sensible that the House has agreed to conclude the debate on the Finance Bill 2011 in both Houses of the Oireachtas by Saturday. Regardless of one's views on the Bill, it is a sign of the new reality in the House that a measure of agreement was reached between the biggest parties on both sides of the House yesterday evening. Prior to that, we had been told incessantly by the Minister that this could not be done by Friday and that it would lead to all kinds of difficulties. The House will be aware that when the Minister for Finance made his Budget Statement on 7 December last, the Government decided not to accept a proposal made by the leader of my party, Deputy Kenny, which would have allowed a finance Bill to be passed before Christmas. If there was a clear will for this legislation to be passed, that should have happened. In general, it is right that each year's finance Bill is implemented by both Houses before the end of the first quarter of the year. The deal agreed with the EU and the IMF explicitly states that the conclusion of the budgetary process should happen by the end of the first quarter of the year. The various parties may disagree on the budget, but we have a sovereign obligation to meet that commitment.

I listened to the president of Sinn Féin on the radio this morning. He was greatly confused when speaking about the negotiations with the EU and the IMF. At the start of the interview, he clearly said he would take a unilateral position on the question of debt. By the end of the interview, he was greatly muddled and said he would negotiate with the IMF and the EU. Given that their party colleagues in Northern Ireland have accepted a clear programme of austerity as a major part of the partnership government there, I find it hypocritical that the Sinn Féin Deputies in this House seem unable to consider the potential for adjustments in public expenditure in order to do what is required in this State over the next few years. The austerity programme in Northern Ireland, which will be pursued over the next four years, involves substantial cuts in public expenditure across a range of departments there. With the greatest degree of respect for Deputy Morgan, I do not think the public will buy that kind of hypocrisy over the course of the next month. It is not credible. One can have one position in Northern Ireland and another position here.

They are totally different positions. Deputy Hayes knows that.

Sinn Féin is arguing that it is hamstrung in Northern Ireland——

——because of the fact that the British treasury gives Northern Ireland an envelope of money for a 12-month period

That is the argument.

If Sinn Féin is so opposed to the position being taken by the British treasury, why does it not depart from government in Northern Ireland? If it is so opposed on a point of principle to being caged into a financial equation in Northern Ireland, why does it not withdraw from the government there? Why does it not take up a position on the opposition benches and leave the ministries and the mercs behind?

There are no mercs in the North.

With respect, I listened to the Deputy in silence. The logical outworking of the Sinn Féin position is that if it opposes the cuts in Northern Ireland, it should take up a position on the opposition benches and hand over to the other parties there, rather than play-acting in the way its leader did this morning. As I understand it, the MP for Belfast West has had no difficulty with taking £200,000 a year from the British taxpayer over many years.

This country is facing enormous reputational damage as a result of the actions of the Minister of State, Deputy Roche, and everyone else who supported the Government over the past decade. The Minister of State will be aware that our reputation as a country is on the floor across Europe, as a result of the manner in which we have handled our economy. I suspect that when he goes to bilateral meetings with his EU colleagues, he does his best with the difficult cards he has been dealt. The President of the European Commission, Mr. Barroso, was absolutely right when he referred to the domestic reasons for the problem we face. Is it not the case that the Watson and Regling report on the banking sector and the financial collapse pointed to clear international evidence that 75% of the problem we face can be attributed to domestic factors and do not relate to the difficult international conditions that are obvious in our economy? We have to correct that.

The first step towards national recovery is the election of a new Dáil. The right of the people to express their views has not been upheld. We have a new banking regulator and a new Governor of the Central Bank, but we do not have a new Government. The Irish people are the last group of people to be consulted on this issue. They will have their say soon. It is crucial for us to have an honest debate on the future of this country before that happens. My party will not make extravagant promises that cannot be stood up. We have accepted the parameters for the obvious adjustments that will have to occur over the next four years. We have agreed that an adjustment of €15 billion is absolutely essential. We have said the new Government will have to meet the requirement that a 3% deficit target be reached by 2015. The ways and means of achieving the national growth for which we are ambitious will have to be teased out during the election campaign. Our approach is different from that of the party opposite and other parties.

The various parties in this House will pursue different policies during the campaign. The Labour Party differs from Fine Gael in its views on the right balance between tax and expenditure. I respect that. The people will have their say during the course of the debate over the next month or so and will elect a new Dáil on the basis of their choices. Nobody should be under the illusion that we can choose a soft option or use a magic wand to immediately get us out of the difficulty in which we have been placed by the party opposite over the past decade or so. The Irish people are economically literate. They understand clearly the difficult choices that lie ahead. They know this country, including the Houses of the Oireachtas, has to be transformed from top to bottom. They appreciate that radical transformation of public administration and the public sector is inevitable. The party opposite failed drastically to deliver such change over the past 14 years.

Is that agreed? Agreed.

This is undoubtedly one of the most critical Finance Bills we have ever seen, or that has ever been introduced in this House. This legislation will give effect to budget 2011, which is the first instalment and the legal base for the four-year national recovery plan. It is a critical element of the implementation of the financial package that has been agreed by our EU partners and the IMF. It is critical that this Finance Bill, more than any other such Bill that has been discussed in this House since I was first elected in 1987, be fully teased out and examined. It should not be subject to some kind of truncated consideration. Over the next five days we will engage in a shameful charade in this House. The Finance Bill, more than any other Bill, requires detailed examination and should not be rushed. If we want to make Dáil and Seanad Éireann relevant to the lives of the people of this nation, we should not do what we are doing. We should give the Bill a complete and thorough examination. Ironically, last week in this very Chamber we discussed the issue of Dáil reform, and one of the points made by people on all sides in politics and in Irish life who had served in this Chamber over the years was that we had dealt with important legislation shamefully. They said that legislation had been dealt with on the nod and without detailed scrutiny or examination. Members should mark my words: in the years ahead, the charade of this Finance Bill will become known as a low point in political debate. I support this Bill and I want to see it passed, but I would like to see it passed after a full and thorough examination.

On the Government side, we want the Bill passed because it is necessary to launch the rebuilding of our nation. It is necessary to give effect to the four-year national plan, to give hope to the hundreds of thousands of people who are unemployed, to balance the public finances and to put Ireland back on the road to recovery. I accept that some Members of the House take a different view of the Bill and of the focus of Government policy, and I respect that. However, there can be no respect for the manner in which we are dealing with the most important Bill in the history of the State. Why are we dealing with it in this way? We all know there is to be an election by 11 March. It is not important whether we have it on 11 March, 11 February or 25 February; what is important is that we fully tease out where we all stand on these political issues. This Bill is being handled in a way which can only cause us to question the approach to politics being adopted by two of the major political parties in the State. I put it to the House that the real motivation for this way of dealing with the Bill is that these two parties do not want a full, frank and clear analysis of their policies. We will end up sleepwalking into a general election, and the two parties most likely to form a Government will not have to put before the House their alternative views of the Finance Bill.

I give a certain degree of credit to Fine Gael. I have read its documents with great care, and their key analyses are not all that different from those of Fianna Fáil. However, the stance of the Labour Party is cynical in the extreme. I agree with Deputy Kenny's comment in the House this morning that one of the most important constitutional burdens placed on the Members of Dáil Éireann is the agreement of the Finance Bill. I also agree with Deputy Brian Hayes, who said only four minutes ago that the Finance Bill should, in the normal order of things, be agreed before the end of the first quarter of the year. That is not a bad position to adopt.

There can be no surprise about the anxiety of the Labour Party to get through this charade as quickly as it possibly can. It does not want a full exposition of the fundamental differences between its analysis and our analysis but also, more importantly, its analysis and that of the Fine Gael Party. The Labour Party, above all, wishes to make absolutely certain that the Irish people never have the opportunity to engage in a mature debate on the fundamental differences between the two parties most likely to form the next Government.

What do they disagree on? Deputy Hayes touched on some of the points of disagreement, including the size of the adjustment that needs to be made, the level of taxation that should be imposed, the spending cuts required, the eventual size of the public sector and the Croke Park agreement. They also fundamentally disagree on the IMF-EU bailout. I will outline some of the issues on which those two parties are at odds and on which I, as a taxpayer as well as a public representative, would like to see a response. Our friends in the media have totally ignored this. They have focused, rightly, on a detailed and incisive analysis of Government but they have given a blind pass to our friends in the Labour Party.

Fine Gael says — as mentioned by the Deputies opposite — that a cut of €6 billion in public expenditure is required. In fact, Deputy Noonan said this when speaking toThe Irish Times on 10 November 2010. I agree with his analysis; that is the order of the adjustment we need in our public finances. Let us call it a cut. What did the Labour Party say a few days later? It said we need an adjustment of €4.5 billion. Two parties going into Government cannot diverge by 25% on this issue. That is a fundamental point. Every taxpayer and citizen has a right to know this. In fact, Deputy Gilmore said on 3 December that a €6 billion adjustment was unacceptable. How will he square that with Fine Gael?

Another issue of some importance is the amount of tax we must raise. Fine Gael has made it clear — again, I commend it on its clarity, although I do not agree with its analysis — that the adjustment must be made up of one part tax increases to three parts cuts in expenditure. Deputy Michael Noonan said on 28 October that every euro imposed in tax rises must be matched by €3 worth of spending cuts. He could not have been clearer. I do not agree with him on the extent of the cuts but he must be given credit for his clarity. What does Deputy Gilmore say? He says that the balance between taxation and spending cuts should be roughly 50-50. How will these two parties bridge the gap? Oddly, I agree with Sinn Féin: the reason the parties do not want to discuss this at length is that they do not want the issue to be aired between now and the general election.

On the issue of income tax rates, again, Fine Gael could not be more clear. In its pre-budget submission it stated that it would not raise either the 20% standard rate or the 41% top rate of income tax. I may not agree with this, but at least it has the benefit of clarity. What does the Labour Party say? It wants to impose a third rate of 48% on joint incomes of more than €200,000 or single incomes over €100,000. It also wants a reduction in the personal tax credit of €250, which will hit people on the minimum wage — the very people its members agonise about here. How will the Labour Party adjust its position to match that of Fine Gael?

What about the question of bringing those on the minimum wage into the tax net? Fine Gael was at least clear from the outset that it supported such things as the Croke Park agreement. In its budget perspective, the party stated: "Fine Gael in Government will support a recovery in employment levels by keeping minimum wage earners out of the tax net in 2011", and goes on to talk about what will happen beyond that. However, let us consider the proposals published by the Labour Party. It wants to reduce the personal tax credit by €250, which will affect people on the minimum wage. This will not be discussed on the airwaves or in the media. Fine Gael shares the view of the Government and of Fianna Fáil that we need a four-year timeframe to balance the public finances. It has made that clear, and I commend it because multi-annual budgeting is common sense. It is a view I take. However, the Labour Party has introduced a plan only for 2011, God forbid it goes any further.

There are other differences between the two parties, including their stances on the Croke Park agreement. Where do they stand on the number of positions to be cut from the public service? Again, Fine Gael has been clear, specifying a figure of 30,000, but the Labour Party's figure is half of that. It goes on and on. The parties are at odds over third level fees, banking, the EU and IMF, and the bank guarantee. It is critical when we deal with the Finance Act each year that we debate all the fundamental issues that will make this country recover. We are not doing it on this occasion because the political exigencies of the time so dictate, and that is a disservice to the country.

We could have waited a week or ten days further. I should not have minded working 24 hours a day for the next ten days, but we need to do a much more incisive job than we are doing, and this marks a new low in the manner in which we have handled debate in this House. There is a fundamental problem. We believe there is a right way forward. We disagree with other political parties and that will be put before the people. Above all else the people have the right to know the truth and they will not know it because of the manner in which this debate has been truncated.

We will be delighted that the Finance Bill is passed because we are in favour of it. However, this is not the correct way for Dáil Éireann to do its business. We should tease the issues out and we are not doing this.

I welcome an opportunity to make a brief contribution to this important debate, and I thank my friend and colleague, the Minister of State, Deputy Dick Roche, for giving me some of his time. He still has friends in Tallaght, so if he is in contact with them over the next few weeks, perhaps he might give me a mention.

My son, Niall, who follows these matters, tells me Google is saying Charlie O'Connor has contributed to 110 debates in the past year, which is supposed to be above average. I get the sense that this is a very important debate, and I am anxious to make my small contribution. The news on RTE and TV3 tonight indicates that this might be the second last day we are all here. Whether that is true I do not know, but in the event, I am glad I have been given the opportunity to support this legislation. Whatever happens after that,que serra, serra. The news has also been dominated in recent days by references to departing colleagues. I have been privileged to know many of them from different parties over the years, and I wish them well.

Deputy Noel Ahern made an interesting statement today about Fianna Fáil Deputies in difficult circumstances who might blink as regards their running mates. I make it clear that Charlie O'Connor has no intention of blinking. I have been a public representative at local level since 1991. I was privileged to become a Dáil Deputy, succeeding my friend and colleague, Deputy Chris Flood, in 2002. Whatever the people of Dublin South-West think of me is all right. I have worked hard on their behalf, and have tried to represent their interests and concerns. Their judgment is all right with me, and I shall face the next 31 days with confidence, a good spirit and enthusiasm and will accept the judgment when it comes.

On what the Minister of State, Deputy Roche said, and other colleagues — I know Sinn Féin has a different view — it is important that the Finance Bill go through. I am not afraid to say from the Fianna Fáil benches that I am not entirely happy with every aspect of this legislation. In fact, there are things in this Bill that would undermine values that I have upheld in my public life and certainly during my Dáil career. However, one takes responsibility in politics and I have no intention of seeking publicity by suggesting, "Perhaps I will, perhaps I won't". It is very important to enact this Bill. There is a responsibility now for the Opposition to listen to what is being said, and it is important for the Bill to go through the Oireachtas in a proper manner this week, after a good debate. The date of election is no longer a mystery. There might be a variation of a couple of days, but we now effectively have an agreement on when it will take place. Even the Opposition made the point, very clearly, that the Finance Bill is important. I shall not be any happier than those Deputies who have indicated they will vote against the Bill. I appeal to them to have sense, and do what is right for the country, since senior Opposition Deputies have made it clear, both in private and public, that the Finance Bill should be adopted.

The Government, in fairness, has stressed that the Finance Bill is the right way to go. We all know that the country faces not only a banking crisis, but a fiscal one as well. I have mentioned my constituency several times in the time I have been here. I represent Dublin South-West. Deputy Doherty should know that I was talking to my Donegal-born parish priest this morning and he was very anxious that I should say that. I represent the people of Bohernabreena, Brittas, Greenhills, Templeogue, Firhouse and Tallaght, and I have gone out of my way to listen to what people say to me. I was not elected to hide, and neither have I hid. I certainly did not hide in the last difficult days, although I crossed the Liffey last night to chair a convention in Dublin Central, the first in 40 years not to choose Bertie Ahern. Perhaps that is something I can put on my CV.

Why did the Deputy not put down his name for the leadership?

I felt I was too young and that we needed a more mature person. I have no difficulty in that regard. I should acknowledge, incidentally, the many calls I have received throughout my constituency from people who have a view about who the leader should be.

They want the Deputy to run.

It is important, but I said last week I will not get distracted by these issues. I went on record last week on the confidence motion on the Taoiseach, Deputy Brian Cowen, to the effect that it was a distraction. My colleagues on the Fine Gael benches have had experience of this, but I also hoped there would not be a divisive leadership contest. I believe that Fianna Fáil today, 30 days from the general election, will unite behind one leader.

For whom will the Deputy voting?

Surely he will vote for the Dublin man.

Give us an exclusive.

I will not give an exclusive because I said the other day I wanted to assess the situation, consider all the candidates and listen to my supporters and community.

Could we come back to the Finance Bill?

This is all about the Finance Bill, a Cheann Comhairle. I am less experienced than some of my colleagues, and I have always tried to follow what they do. I am following their example, so if I am out of line, I apologise.

The Finance Bill is important legislation. If it is the last initiative of this Dáil, it should be dealt with properly. I hope this will happen and people will make important points. The Minister for Finance has conceded today with regard to what was said to him at the Fianna Fáil parliamentary party last week in relation to universal charges, medical card holders and so on, and I know colleagues right throughout the House had issues in that regard. I am glad he listened to us and that the Government made a decision. It is not just colleagues on the Independent benches who have issues they want articulated. However, if one is a member of a party, the place to do this is in the parliamentary party room. I have always been happy to do that, without fear, and I shall continue to do so.

In case I do not have another opportunity to speak in the Thirtieth Dáil, I wish the Ceann Comhairle well and thank him for the opportunity to have chaired a number of Dáil sessions, which I have been very proud to do. I wish him well and know that at the moment he is probably the only Deputy to be guaranteed a seat in the next Dáil.

I refer to a number of points in the context of the self-employed, small business person. This, particularly in the indigenous sector, will be the element in bringing back the economy. There is nothing in the Finance Bill about job creation and job retention. Section 18 deals with bringing forward the filing of tax returns for the self-employed, payment of preliminary tax for 2011 and the balance of tax for 2010. This moves from 31 October to 30 September when it is filed manually and from 14 November to 14 October when filed online, which a majority of people do. This will put enormous strain on the small business person. I was a self-employed chartered accountant for many years. I dealt with these people. This measure is directly affecting cash flow. I assume it is being taken because of the third quarter and the IMF plan. One cannot squeeze the life out of the small business sector, which provides jobs up and down the country. There are 800,000 people employed in the small and medium-sized enterprise sector. The businesses cannot get credit from the banks and they are under pressure in terms of getting paid. Credit has dried up and people are withholding payment as a form of credit. In terms of practicality and work being done, by bringing returns and payment back to 30 September, it clashes with company returns, which must be submitted within nine months of the accounting year end. For most companies, the year end is 31 December. Accountants will have to file company returns and then file personal returns and returns for the self-employed at the same time. There will be chaos.

From my perspective, the issue is credit flow for the SME sector. It will put many of them out of business. The measure is shortsighted and shows a lack of understanding of how business works. The old saying is that cash is king. Squeezing the SME sector to get money into the public coffers means the SME sector will find it difficult to pay wages and will find it difficult to repay banks. It is shortsighted in the extreme and I feel strongly about this point. If we do not look after the small business sector we will not come out of the recession. The small man has been caught by this Government in recent years. I came out of the SME sector. The same applies to the person in the PAYE sector, the pensioner, the carer, the disabled and the widow. Why does the small man always end up paying? People in the SME sector will end up taking less home than staff are being paid because they are working in local communities. I see this in County Limerick and in the city. Such businesses are crippled at every level. In some cases rates are higher than rent. This should be reversed. It is penal and draconian and will not work.

There is a major amount of discussion on job creation. All Members find the same situation. When I knock on doors, I meet mothers, fathers, sons and daughters. In many cases, the sons and daughters are out of work and are sitting at home. They cannot get on to courses and cannot get a job. Many of them have emigrated. One man I met had been to Australia for a year. He could not go back because it would cost €8,000 to get a visa. He is going to Canada for a year. He asked me what there was for him here. He asked me whether there was a European globalisation fund for construction workers. He had worked as a bricklayer. I checked out the point. Last June, the Tánaiste announced she would make an application under the European globalisation fund for construction workers. Lo and behold, the application has not been sent in yet. The fund amounts to €63 million, of which €40 million comes from Europe. It would affect 9,300 people involved in the construction sector, the very people who have lost their jobs. Most of them have probably emigrated by now. The Government does not have a clue and does not understand the basic rules of commerce. If staff in the Department of Education and Skills are overworked, there should be flexibility so that the work is transferred elsewhere.

The final point concerns the European stability fund and the rate of interest we are being charged. We are paying 3% above the cost of borrowing the money, which should not be happening. People have raised the question of moral hazard and whether, if a deal is given to Ireland, other countries will avail of that rather than going to the bond markets. That theory does not stand up. Ireland is a small country. There is now some realisation in Europe that interest rates will come down despite the protestations to the contrary of the Minister for Finance, Deputy Brian Lenihan. There must be a Europe-wide agreement on sharing with bondholders. This must happen. The Germans and the French must realise that the banks invested in risky products with Irish banks and they must share the burden. If there is a Europe-wide mechanism for sharing the burden with bondholders, international markets will consider that the Irish State is not taking on the penal burden of the banks. The interest rate will drop. If the cost of borrowing drops on the international markets, it will drop over a quicker period and we can go back to the IMF and the European Commission and seek money for three years rather than seven and a half years. That will automatically bring down the cost of borrowing because the term is shorter. One of the reasons for the lower rate of interest for Greece is that the term was shorter.

There is a fundamental problem with the banks. The amount of money we have put into banks is equal to our national debt, approximately €90 billion. It is like approaching someone with a 100% mortgage in an estate and suggesting paying the neighbour's mortgage as well, even if the person will never own the neighbour's house. It cannot be done. There must be a write-down and there must be sharing between the banks and institutions provided funding. There is need for a negotiation. I hope people will decide to put Fine Gael into government and that will happen.

The small business person must be looked after. The Government must revisit the decision to bring forward payment of tax. This will put many small firms out of business and many jobs will be lost. That cannot be allowed to happen.

This is almost certainly my last opportunity to speak in the national Parliament. It has been a great privilege and experience to represent the people of Cavan-Monaghan. I thank the Ceann Comhairle, his colleagues and the staff who have been so helpful over the years, particularly when I first came here, in guiding us through the workings of the House.

When this Government came into office in the summer of 1997, it found that the former Fine Gael-led Government, under the then Taoiseach, the former Deputy John Bruton, had left a budget in surplus and an economy with employment increasing at the rate of 1,000 per week. The Minister of State, Deputy Dick Roche, was extremely worried about the differences that exist between the Fine Gael Party and the Labour Party and how they will be reconciled if we get the votes to form a government. I would remind him that prior to the last election one of Fianna Fáil's strongest stances was that a vote for Fine Gael was a vote for the Green Party and that we would be forced to implement Green Party structures. We saw how Fianna Fáil rolled over on that stance.

This year's budget and the Finance Bill do nothing to improve or encourage employment. Rather they recognise the fact that we are now being run by the IMF, which has given us access to the funding we need to pay for the public services the State provides to our citizens for the next three years. The budget, like last year's budget, has hit the low paid, the blind, the widowed and the disabled particularly hard. However, I welcome the U-turn by the Minister, Deputy Brian Lenihan, on applying the universal social charge to those with medical cards and I thank my Fine Gael colleagues for their work towards this end.

There is nothing in the Bill for small and medium-sized businesses, which, if they were to employ one extra person, would result in reducing the number of unemployed by 80,000. I support what the previous speaker, Deputy O'Donnell, said about the damage being done to that sector.

The Minister, Deputy Brian Lenihan, further admitted today that his Government had allowed us to lose our competitive edge relative to that of our main trading partners. As he admitted, his Government took its eye off the ball. Unfortunately, our people now have to pay for that lack of leadership.

I met a young man while canvassing in Carrickmacross last Saturday and when I asked him to consider voting for the Fine Gael Party, he said he could not because he had to go to Australia the following day. Many of our brightest and best have had no option but to leave this country to find a means to live but, hopefully, in the next few years under a different Government we can improve the situation and provide an incentive for such people to return to rebuild our State and our future.

Clearly, the universal social charge and other taxes are necessary to meet the demands of our country and our new masters, the IMF and those in Europe. I believe that a Fine Gael-led Government can go forward with confidence to rebuild our country with the help of our partners in the European People's Party where many of the senior European leaders would be on our side.

Another measure I want to refer to is the section 23 relief, which was part of the Government's building boom solution during the past number of years. It was interesting that on budget day the Minister, Deputy Brian Lenihan, proposed serious restrictions to this scheme but he has now decided to change his decision until there is a full evaluation of it. Clearly, the Minister got it wrong again and he is now kicking to touch. It is impossible to understand how one could advise somebody to sign up for a long-term contract with a clear understanding that tax relief would be paid for the mortgage or whatever was involved and suddenly without warning the whole scheme would be pulled apart. We have talked for years about this scheme and questioned how it could be justified. Serious legal and unjust issues need to be addressed in that respect.

On a final note, I welcome the decision of the former Minister, Deputy Harney, to resign. I just wish she had done it many years ago.

Like Deputy Crawford, this will possibly be my last time to speak in the Dáil. Having been in these Houses for 33 years as a Member of the Seanad and the Dáil, I have seen it all. I want to thank everybody. We got huge co-operation from the staff of the Houses, the ushers and everybody concerned. It was a pleasure to work here and it was a fine working environment. I recall my maiden speech was about trying to save the sugar factory in Tuam, but that did not work either.

While this may not be directly related to the Bill, I have a few hard words to say about what has happened in this country. Irrespective of what side of the fence one is on, I believe most people would agree that we are now in a place in which we should not be. I only hope that whatever Government is in office in the future will turn matters around in such a way that people will regain at least a small bit of confidence and that they will believe there is a place for them in this country, which they do not believe now. That is the awful impact of what has happened.

I am not directing this criticism at the Minister, Deputy Pat Carey, whom I have always found to be a decent man and one who was easy to deal with. Whoever was responsible at whatever level for the IMF intervening, the minute the IMF official stood on Irish soil, it put a cloud over Ireland, irrespective of where we were ranked in the world, for years to come. This brings me on to another serious matter. We got money from the IMF and the EU at a rate of interest that we simply cannot repay. Bearing in mind that €5 billion in interest payments alone will be paid this year and such interest payments are likely to increase to €8 billion in three years' time, no small country like ours could meet that level of repayments. The Minister, Deputy Brian Lenihan, and the Taoiseach gave the impression when the negotiations with the IMF were ongoing that this was by far the best deal we could get. Having regard to the 5.8% interest rate that was set, we got an interest rate of 1% for repaying money we got from the ECB previously. It is against that background that there is a touch of the illegal moneylender to the high interest rate that has been set. Irrespective of what money one borrows at what interest rate, if one does not have the repayment capacity, the burden of repayment will be too much and people will bend under the pressure.

My fervent hope is that the new Government, in conjunction with the governments of other member states of the EU, economists and politicians across Europe, would come to a realisation that a small country like ours, in the throes of the misery this burden of interest payments has brought down on us, simply cannot repay the money borrowed at the interest rate set and that it will have to be substantially reduced. If it was, I could foresee a reasonable future for us.

I was extremely disappointed that the budget did not provide for any real job creation measures, irrespective of from where the money would come. If we got people back to work, it would give them a degree of self-confidence. Even if they were not to get that much more than they would receive in social welfare benefit, it would greatly enhance their self-esteem. The Government did not provide for that in the budget for whatever reason. The new Government will have to do something in that respect.

There are many other matters on which I would like to speak, including the universal social charge. It looked good on paper but its implementation has hit the people at the bottom of the ladder extremely hard.

A measure that was mentioned on budget night is not a quirky one even though it is an odd one. The budget provides, for some strange reason, that a third child is overly penalised in terms of child benefit.

I am a third child.

Deputy Crawford is the third child in his family.

And a fine big child the Deputy was. A double whammy is suffered when the third children in a family happen to be twins. A mother asked me the other day what had we against a third child and against twins who are third children. They are losing out hand over fist. It is a small matter but I ask that it be examined because this represents the implementation of a silly proposal that should not have been put in place.

When listening to Deputy Connaughton, who stated how many years he was a Member of the House, I noted I have not been a Member for anything like 33 years. Having looked around before Deputies Wall and O'Connor entered, I noted what a motley crew was present. Perhaps everyone else is too busy doing other things and the dead sheep are being press-ganged just to keep the House going. I should refer to the baby of the House, Deputy Doherty, whose presence provides a contrast. Be that as it may.

The Finance Bill is very important every year, and it is more important than ever this year. We have international commitments as part of our borrowing programme and, consequently, we need to pass the Bill quickly. It could be passed now or when the new Government takes office. In the latter case, however, it would have to be passed very quickly because we could run out of time.

I hope the parties that will constitute the new Government are not spending all their time getting ready for the election, that they realise what is likely to happen and are engaging in preliminary talks on how they might create a programme for Government. If we do not pass this Bill in the next couple of days, the parties forming a Government after the election would not want to spend too long talking; otherwise we might get into difficulties.

In addition to playing politics in the House, we should think of our international commitments and those we made in respect of our funding programmes. The IMF-EU deal is important, but I disagree with Deputy Connaughton's view that a cloud came over us on the day it was made. The deal secured our funding. The National Treasury Management Agency was borrowing on the markets every month until late last year. With regard to current expenditure, we are overspending by nearly €20 billion per year. While I hope there will be an improvement this year on foot of the budget and the Finance Bill, the funding is essential. The deal is only a facility and we will not pay interest until such time as we draw down the funding. It means the National Treasury Management Agency will not have to borrow on a monthly basis. If rates improve on the markets, we will not have to use the facility. We can always go to the markets if a cheaper rate is available therefrom.

It is well and good referring to a rate of 5.8%, as Deputy Connaughton did. Perhaps we have been getting money at a rate of 1%. The commercial banks, through the Central Bank, have already received approximately €130 billion at a rate of 1%. If a money lender or whoever Deputy Connaughton spoke about gave one €130 billion, it would be reasonable for it to charge a little more if one did not pull up one's socks enough, on the grounds that a message would need to be delivered.

There has been much talk of renegotiation and statements that we are paying too much. The Taoiseach referred to these in the past week or two and said what we are paying under the deal is the best price. It is good to see that preliminary talks have begun since the ECOFIN meeting last week, as a consequence of which all 27 member states may set up new rules under which countries can get help through the fund. Greece did not get money from the fund and had a separate arrangement whereby it received loans from all the member states. There was approval in principle for the facility used by Ireland. Ireland is the first country to borrow from it. One must borrow according to the rules, regulations and measures that are in place. If we can renegotiate the deal and obtain a lower rate, not only for Ireland but for all other member states in need of funding in the future, so be it.

I envisage that, in three or four months, the new Government will be saying it is great on the basis that it is delivering the bacon and getting a cheaper rate after its predecessor having signed up to a rate of 5.8%. If a cheaper rate is obtained — let us all hope this happens — it will be because the programme to revise the borrowing structures will provide for a better system in the coming months. We must all take responsibility and stop playing politics. If we want the Bill to be passed, we need to pass it correctly. It is a little amusing for Members to state their parties are in favour of the €6 billion correction but against this, that and the other on the basis that one should proceed in another manner. While this is great Opposition stuff, one must adopt a new way of thinking sooner or later.

We showed the Government our way but it did not want to look at it.

Funny money jobs.

Funny money jobs do not get one——

The Department costed our proposal, yet the Deputy is calling it "funny money".

The Deputies should speak through the chair, please.

The Deputy wants a bit of a row, a bit of action.

The Deputy should remain silent to allow Deputy Noel Ahern to conclude.

My point is that we need to be responsible and pass the Bill.

I listened to other speakers, particularly Deputy Burton. Her leader said some weeks ago, "We are ready for an election." The Taoiseach said that was great but asked him if he was ready for government. There is a slight difference between the two. It is often said that Members on this side of the House are great in government and that Members on the other side are great in opposition. Since we are about to change sides, Members will need to prepare and put themselves into the frame of mind of those on the other side of the House. One's remarks today may be thrown back at one in a couple of weeks and may not look too pretty.

I worry about the capacity of the next Government to change role and to take on a different part on the stage, as if one were in the Abbey or some such theatre. There are difficulties. There is no point in complaining about the Government at this stage because, very shortly, others will be in government. My party has been in power for most of the past 23 years. This is a long time. We were in power with the Labour Party after one election and there was a period, after our having a row with that party, in which it, Fine Gael and Democratic Left were in power.

Certain statements that are made from time to time are a bit rich. Some days ago Deputy Rabbitte stated on the radio that Fianna Fáil has brought the country from boom to bust. This is nonsense, of course, although the Deputy often speaks a fair bit of sense. His comment was scandalously wrong and unfair. He was trying to refer to the period 1994 to 1997 during which Fine Gael, the Labour Party and Democratic Left were in power. This period was not long enough in which to do much good and, thankfully, not long enough in which to do any harm. The last time Fine Gael and the Labour Party were really in power after an election was in the period 1982 to 1987. At the end of that period, when Fianna Fáil came back into power, the country was really banjaxed, ruined and paralysed. Many of the economic statistics pertaining to that period were far worse than those that obtain now. It is a bit rich trying to come out with——

What is not true?

They were not worse then than they are now.

Please, through the Chair, Deputies.

I will read them out to Deputy Durkan in a few minutes. It is a bit rich trying to claim credit for a situation that had greatly improved by the mid-1990s when Fine Gael was not in government for long enough to make any significant——

What about the Deputy's brother and his €40,000 speeches?

Fianna Fáil kept going for another six months. The public would not have been——

It is all right, a Leas-Chathaoirligh. Let them.

The Deputy should not encourage them.

I will say sorry to the Chair, but not to the Deputy.

I reject the notion often thrown across the floor of the House that we brought the country from boom to bust. It is nonsense. In the past 20 years, the country has come from a low base and there have been great developments.

Tell that to those who got their pay cheques in the past few weeks.

Please, Deputy Durkan will have his opportunity.

We will come around to that. There have been outstanding improvements in terms of infrastructural development, services, quality and standards of living and the number of people at work. That last used to be 1.1 million before it increased to 2 million. We have rolled back, but only a little. The main core of the past 20 years' progress remains. As soon as we get out of our current difficulties, we will be able to take a higher step on the ladder.

Reverting to the Finance Bill and some of the issues on which the Minister spoke, many experts have stated in the past year or two that too many people are outside the tax net. Some 45% of income earners are paying no tax. While this is a fact, I am concerned that we not move too quickly to correct the situation. We must remember how it came about. The Government, through social partnership with unions and employers, brought about arrangements and deals. Instead of employers needing to give pay increases, the Government did its bit and reduced taxes so that products and services would be delivered or produced at reasonable prices. The idea was to be competitive.

The universal social charge has been introduced. I welcome the amendments that are to be made to it, although someone telephoned me to ask why the €80 million reduction in respect of people with medical cards, while welcome, was to be made up by increasing the charge on self-employed persons earning more than €100,000. I received a text asking why only the self-employed were seeing an increase and why the extra 3% was not being applied on the employed and company directors. Perhaps it is. We should seek clarification when Second Stage is being concluded tomorrow. Everyone speaks for himself or herself and people seek to project their points of view, but the self-employed seem to believe they are being unjustly targeted.

The economy has stabilised after one or two bad years and the export figures for the later months of last year are looking good. I hope they will lead to a better situation. There has been some good news on the industrial side. For example, Intel made a key decision to increase investment and refurbish some of its older facilities in Leixlip. In recent days, the US Chamber of Commerce issued a statement to the effect that Ireland was ripe for a strong economic recovery. After all of the bad international press, positive press is welcome. People agree that we have a flexible workforce, we are getting our cost structures in place and we are becoming more competitive. Two years ago or so, we were losing many multinational companies because of the downturn. If they are now recognising that we have got our act in order and that Ireland is a good place in which to do business, it is welcome. We must continue in this vein and encourage further foreign direct investment, an area in which we have been doing well in recent years. I welcome the changes in the universal social charge, as they sound more equitable.

I am pleased to see the changes to stamp duty. A fortnight ago, a constituent attending my clinic complained to me. As he was a first-time buyer who had not signed his contract by budget day, he was being caught for stamp duty when he would not have been previously. However, the measure is undoubtedly welcome. In many respects, life has moved on. For years, all of the sympathy of the House was for first-time buyers. That person is no longer the most disadvantaged. The current problem is getting a loan to buy a house. If one can do that, one is on the pig's back. The person who needs encouragement and has received it through this measure, which will combine the rates down to 1%, is the person who bought an apartment or house when property cost more. However, many apartment owners who have since married are looking for family homes and would once have got new mortgages and then done well on the sale of their apartments. They are now in negative equity, leaving a big step up. They need encouragement and help. This stamp duty measure is targeted at those who need assistance, not at our traditional focus, namely, first-time buyers.

Regarding section 23 reliefs in the budget, we have all verbally bashed property owners and developers in recent years and believed that certain people were managing to write off all of their incomes against these measures. I initiatlly welcomed the section 23 provisions in the budget but later, relatively normal people attended my clinic or sent me e-mails to tell me that they were landlords of two or three properties. It used to be the notion that these tax measures were being milked by large developers, which may very well have been the case, but many normal people in normal jobs like ourselves who had accumulated a couple of properties also believed the measures in the budget were unfair. It is strange to see how a measure one believes is directed at the well-to-do affects someone else entirely when it is rolled out in the real world. While I will not call it a second look, I welcome the study of the proposed changes and the attempt to analyse their real effects to ensure that, where jobs are concerned, no negative side effects emerge further down the line. One could go through many other measures. Since my time is almost up, I will leave it at that.

Did I hear that another measure was excluded, namely, the Government's introduction of a maximum salary for public servants? It was mentioned in the Minister's Budget Statement. I had a bit of paper on this measure somewhere, as I believed it was going to be included in the legislation. However, I do not see it in the Bill. When the Minister is debating Committee Stage tomorrow, perhaps he might reassure the House that, while the measure has not been included, it has not been forgotten. I hope the new Government will implement it.

As other speakers have done, I thank those who have sat in the Chair at different stages, for their courtesy and kindness to me over a very long period. I have been here in this Chamber for 25 years, with nine years in the Seanad and since I first stood for election 42 years ago. I am indebted not just for the courtesy of Members of this House, the staff and ushers and others, but also on occasion, for their kindness as well. Gabhaim buíochas ó chroí leo agus le mo chomhghleacaithe thar na blianta.

I want to take advantage of the wide range of speeches that have preceded me, including those on Dáil reform. Nevertheless, I wish to concentrate on what makes up some of the contextual background to what we are discussing. I wish the next Government well. It is a Government I hope to look at from a distance. I have already said I am very grateful for the kindness and courtesy of my colleagues in this House over the years and I hope not to be saying goodbye to them. If I succeed in getting the Labour Party nomination for the presidency, I look forward to meeting them all in their constituencies in a less formal setting.

When I first stood for election in 1969 I was very conscious of something that is important to me. I was leaving an academic world in which I had spent a great deal of time and on which I had expended a great deal of anxiety in order to secure entry. People from backgrounds such as mine did not go to university, did not qualify in other universities and certainly did not teach in universities. I left that world to participate in public life which was part of the tradition of my family. I wish people from all walks of life took part in politics and in public life. It is very important to act in the public space with whatever, as Connolly would put it, gifts of hand or brain one has, and to deliver it for one's fellow citizens. I was conscious in 1969, however, of the great failure of a country that then called itself a republic. I believe no real republic has been created in Ireland. The failure has been of three kinds. There has been a failure in making political power republican, a failure in making republican any kind of administrative power and a failure with regard to communicative power. Without being technical about each of these, I think those who wanted Ireland to be independent would have envisaged a country in which there would be far greater distribution of power, that it would not be confined solely to the exercise of parliamentary democracy.

Parliamentary democracy is incredibly important. For many years, people in Ireland struggled to have their own parliament and struggled to participate in it. But there is more to political power than voting once every four or five years; there is the exercise of power in every dimension of life. If a real republic had been founded, we should have been spending decades extending and deepening political power. To the credit of the Labour Party, that has been its intention and aspiration, however achieved, since it was founded in 1912. With regard to administrative power, it is quite appalling there was no real change from the time the Treasury dominated in the olden days in the hand-over to the Department of Finance. As a political scientist I find it quite extraordinary that so much attention has focused on changing the electoral system and so little on the structure of Cabinet power. There is no constitutional basis for the hegemony of the Department of Finance; it was a practice that flowed seamlessly from the British Treasury and adopted without question. If one wanted to effect radical change, one would break the connection between the monopoly enjoyed by the Government of the day and Parliament. One would allow, for example, the establishment of a committee system with the right to initiate and change legislation. If one wanted to go further as in the Scandinavian model, it would be to allow committees to have limited budgetary powers, thus ensuring people who came into politics would have a career in politics separate from being on the Front Bench if in opposition or being in Cabinet if in government. These are real reforms but they are empty and missing from the discourse. I have the impression that even though the Labour Party has produced 140 proposals which I strongly support, including in particular its proposals on citizenship, I find, generally, there is an element of fright in what those elected are suggesting as if they are offering themselves for reform, as if that was the major problem. That is not the problem.

I will give my opinion on where I think this is going, having spent my lifetime, not just in elected politics but also in academic politics and the social sciences, another area of great failure. I say this as a founding member of the Irish Sociological Association and the Irish Political Science Association. One need only watch television and listen to radio to know what is happening internationally. A significant price is already being paid for the broken connection between the aspirations of the people of this planet and those who take decisions on their behalf. The distinguished political scientist, Jürgen Habermas, has suggested that people can be invited to be bound by rules and by decisions in which they have had a chance consciously to participate. In one part of the world after another, we have the assumption that rational parliaments will be able to solve global problems such as the food crisis, the environmental crisis, the energy crisis or whatever. At the same time, very serious people are suggesting that parliament is what is irrational and that markets are rational when in fact all of the evidence shows it is the flow of international market capital which is completely unaccountable and is irrational. There is not one jot of evidence since the crash in the 1920s in the United States, as both Professor Samuels senior and junior have stated, that the markets are rational. There is strong evidence for the speculative consequences of markets.

On the other hand, people have put all their trust in parliaments and all over the world, parliament is losing. In the European Union, for instance, we are in the gravest danger of sinking back to a common market rather than a Europe beyond wars which might have been a Europe of all the citizens. The citizen deficit in Europe is its most serious failure. That is why those who want to defend their banks, be they French Presidents or German Chancellors, are defending their francs rather than the possibilities of Europe. They have put us in such danger as regards the European project.

There was a great opportunity missed to build a real inclusive republic in Ireland which would have reformed the relationship of Cabinet to the Dáil structures, that would have had a democratic, local government, that would have allowed opportunities for participation. There has been a political failure to establish a republic. There has been an administrative failure whereby administrative structures are hierarchical and patriarchal. I listen to those speaking about the clash between being a legislator and a representative and the consequences of clientelism about which I wrote in the 1970s. This is because of an authoritarian administrative system that never saw the citizen in the French republican sense of being an equal. It was because the relationship of the citizen with the State system was devalued. There is a communicative power where there is no connection between the vulnerability, the struggle and the agony of ordinary people at this time and the description of what is news, of what is happening in the world which they inhabit. They do not have equal access to the story, rather it is for those who work in the sector. I was Minister with responsibility for broadcast communications. This is not an Irish phenomenon. Across Europe and the western world, people will say that they must be cynical about presenting what the viewing or listening public will accept as the news of the day. This kind of artificial connection between what is moral and what is ethical is incredibly dangerous. It is widening an excluded underclass in Ireland. It is creating people who will move quickly to conflict because there are no mediating institutions in Europe. In one country after another across Africa and Asia, as people overthrow dictatorships they place their trust first in representative institutions and then, if they are let down, they are into a straight conflict with what are regarded as the forces of law and order. The result is war and the waste of human and other resources in the terrible tasks of war.

I say this not to depress anybody but simply to state that since I was a child in County Clare I have had a belief in the power of education and in the power of ideas. However, I believe an enormously high price has been paid for a kind of anti-intellectualism and authoritarianism in Irish culture. Therefore, I believe we need to draw one conclusion. We need not suggest that that which has failed us should or can be repaired. This is why the Labour Party is incredibly important in leading a government. We need to go back and recover the promise of a real republic that would be built on citizenship and that would reject as outrageous in a republic the kind of radical individualism epitomised in that ugly statement of Michael McDowell's that inequality is needed for the stability of society. It ranks with the mad Margaret Thatcher view that there is no such thing as society. It stands there as such a notion. People should have seen immediately how incongruous it was to speak like this with the language of radical individualism.

Instead of speaking about the republic that might be created people spoke about getting a bit of the action. Suddenly it was no longer important to have just one house for shelter or to have another for pension purposes, in case a family split up or somebody retired. One needed a string of houses and thus our property bubble was created within a bubble of speculative capitalism that had flowed from an attack on the Glass-Steagall Act in the United States which had introduced regulations following the great crash. President Clinton gave in after several years of lobbying by those who stated it was necessary to get rid of all of the regulations so that the instruments needed by the market could be pushed out to absorb what was regarded as an endless flow of credit. What was this? It was an irrational form of capitalism and thus one of the projects now is the idea of whether capitalism can save itself again.

I believe that as Ireland moves into a time when we can celebrate the founding of my party, the great lockout and 1916 we need to think about an entirely different kind of society. I am immensely practical about this. I can suggest, I have spoken and I have written elsewhere and will continue to do so that what one would do — if one wanted to deliver what I am describing in terms of political participation, administrative fairness and the equality of the right to communicate — would be to speak about a floor of citizenship below which people would not be allowed to fall. One would make secure children from the time of birth to very old people who wonder whether they will have to leave their homes to die, as they frequently do within 18 months of being sent to a nursing home. One would make it possible that children share the same class and for that period of their lives at least would be able to be equal with regard to education. In addition to this, people would have decent housing.

This was the agenda when Sean O'Casey wrote about disparity. James Connolly took the Irish Citizen Army with its egalitarian agenda and placed it side by side with nationalism. The lesson we learned from this was when the egalitarian socialist agenda was placed side by side with the nationalist agenda it would be the socialist agenda which would lose. This was in the dialogue immediately before the meeting of the first Dáil when Michael Collins told the IRB it need not bother with this because they were just going through with it.

Those of us in favour of a version of Ireland where no one will fall below the floor must say it not only to ourselves but also to Europe. In addition, a highly participative inclusive republic was the one in the vision of those who made the case for Irish independence at the end of the 19th century and the beginning of the 20th century. It was this which was stolen from the people after the foundation of the State when the conservatives marched into all the principal professorships including education and philosophy. UCD became a stable for conservatism and suddenly one had the continuation of an administrative nightmare and the robbing of the people of the delivery of the republic with regard to their ordinary lives.

Frequently, people such as Slavoj Zizek have said to me that if things are as I describe them then what is needed is a form of terror that would sweep everything away and to start all over again. A terrible price would be paid for this so therefore one must put one's faith in representative democracy and having done so one wants it to work. If one wants it to work one must be open to making the type of institutional changes that I mean. How could this be carried? There is need for a discourse in which we are able to speak about the vulnerabilities that matter and where there is not a huge gulf between what we say in here and what is happening on the street.

People wonder why poverty has to reproduce itself in the same family from one generation to another or from one area to another and wonder why there is a difference between the quality of schools in one place and the quality of those in another. God did not make it like that. Nature did not make it like that. The people in the so-called Irish Republic made it like that and they maintained it like that. I remember in County Clare when one could point to the two or three people in the Labour Party because they lived in a galvanised house. People would explain that they were Labour in the same way as they would say they were on the margins of society, and they were. Therefore, with regard to thinking the Finance Bill is necessary for this that or the other, I hope the new Government realises that the model which is broken should not be repaired and that there is a discourse now which is wider and which is not only in Ireland but in Europe, where citizens are wondering what institutions might best express that which we wish to share with each other, where the concept of interdependency is accepted and where it would be regarded as obscene to state that radical individualism is what is important and what must drive us. All that radical individualism with its privileged view of professions and its side of the mouth politics with regard to benefit and privilege is what must be rejected.

This has a practical expression in Europe. If we create here a radical inclusive republic we will place it in a social Europe which accepts the interdependency of peoples rather than the aspirations of the elite property owning classes and individual countries. We would then be able to be a region in the global sense that offered guarantees about labour, security and peace. It would be a powerful moral voice in the world with regard to having alternatives to war and allowing people their own paths to development which would be very attractive.

With regard to the Bill the question the people ask, which the new Government must address, is why. The new Government must speak endlessly about jobs. This is the point for people who lose their jobs or are told they must be made unemployed. Everyone here is very reasonable and I ask people to be at least accurate about one thing I remember in this House, which is the night in September 2008 when Labour Party was left alone. The vote was 124 votes to 18 votes. We were the 18. We voted and sustained debate through two nights with regard to an unlimited guarantee that joined the debts of our speculative banks to the deficit issues of the economy. This is what we are facing tonight. I am sorry that as young a Deputy as Deputy Doherty would take it upon himself to suggest that the Labour Party was participating in any cabal. After all it was he who said on 1 October 2008 in the Seanad:

This legislation is about more than the banks. It is about offering security to ordinary citizens and to investors in Irish businesses which in turn means jobs. As the media speculated, other states may well follow this move by our State...my party welcomes this decisive move . . . I support this Bill.

With respect, it was a disaster.

I also say this now looking forward: I hope the discourse we will have now will speak about inclusion. This Bill contains some good measures, but there are also ridiculous ones. I will give one example of what I meant by the phrases, political power, administrative power and whatever. In my long time in here people agitated, for example, for the equality legislation that was introduced by my colleague, Mervyn Taylor. People imagined that when we had got the equality legislation we had arrived at a particular point, but the political science would have indicated that political power was useless without administrative power. It was only when the equality legislation was followed through with the Equality Authority and Combat Poverty Agency that it was possible to administer the benefit that had been won politically. That is the meaning of administrative power and is why we lost the Combat Poverty Agency and the Equality Agency to the right and had all the cuts. That is what citizens in a republic want; they want more political power and want administrative power. They want to communicate their vulnerability and want to be able to respond to each other's independency. The very last thing they want is more of that terrible saying that has brought us to this point now. That is why I am proud to be president of the Labour Party. If we have failed from time to time, what is never in doubt is that we were speaking about a real republic that has yet to be built in this State.

It is difficult to follow that. There is no one as genuine in his or her contribution as Deputy Higgins, on which I congratulate him. I also congratulate him on a lifetime of contribution to Dáil Éireann.

In welcoming the Bill——

Is the Deputy sharing time?

I am sharing time with Deputy Dooley from Clare.

Is that agreed? Agreed.

At no previous time was there ever so much talk in the public domain about when, how and why the Finance Bill would be carried.

Before I get into the Finance Bill, all commentators have been suggesting that politics in Ireland needs to be utterly changed and that the system for electing Members of Dáil Éireann is somewhat flawed. It is claimed that we operate a clientelist system that is totally at variance with proper governance. Ryan Tubridy's book,JFK in Ireland: Four Days that Changed a President, referred to John F. Kennedy arriving in Galway and after the American Legion provided a guard of honour, the last man in the line handed the president an envelope with a query about his American Legion pension, with which the president went on to deal. If it is good enough for the president of the United States to have people making representations to him, it is all about democracy.

An article was written on the last election for Pope in which Pope Benedict XVI was really the only nominee to succeed Pope John Paul II. He stood at the door and shook the hands and clapped the backs of each of the cardinals going into the conclave, which shows the importance of personal contact in that regard. If it is good enough to elect the Pope, we should be proud of the system we have here. With our electoral system we are very close to the people. While some might argue that other democracies are different, a former speaker of the US House of Representatives once said that all politics is local. We must ensure we represent the people who sent us to the Dáil, Seanad, local authorities or other bodies. Our system certainly keeps people firmly in tune and as we have seen if they have not been firmly in tune with it they do not regain the confidence of the people.

As we debate this Finance Bill — certainly the last Bill that will be discussed in the Thirtieth Dáil — we are at a very serious juncture in Irish political life and in the economy. We have seen the crash that has happened and the last time there was such an international crash was in 1929, which was followed by the Great Depression and people standing in the breadline. Some economic books would argue that only the build up to war in 1937 and 1938 with the demand for steel lifted the American economy after seven, eight or nine years of great poverty. We could argue that we are not experiencing the same level of poverty, but we need to support the people who are squeezed — those who have lost their jobs and those with enormous indebtedness regarding their homes and perhaps other speculative borrowing. Irrespective of what is happening with banking and so forth, the people who are really hurting are those who are losing their jobs and those whose incomes have been cut to try to maintain jobs.

We can argue the points of where we are and who was responsible, but the bottom line is that we need to face the realities of the economy and the realities of the difficulties people are experiencing. We need to ensure the measures in this Finance Bill and in the future are implemented in a measured way and are in the best of interests of everybody in society. In the period from 1926 to 1928 and right up to the crash there was an idea that the amount of wealth being generated would continue forever and the same applied in this country. When the property market was slowing down from the early part of 2006 and into the early part of the summer of that year, there were moves afoot suggesting that what we needed to keep the housing market going was to reform stamp duty. Throughout 2006 a plethora of media outlets — which are now claiming we got the policy wrong — claimed the Government was stalling the construction industry through a draconian stamp duty regime. We now know it was much more serious than it was in regard to stamp duty.

As a society, we need to be sound on a number of issues in future. As we move closer to Europe and see the benefits Europe can bring us as a peripheral island and we can see the limits of it, we also must ensure we do our own business correctly and not feed continually from Europe. We have seen the benefits in indigenous industries such as agriculture which are proving very strong in exports at this time. There are fundamental lessons we need to learn. A new financial regulatory system has been put in place in the past one and a half years. Everybody told us we had too much regulation involving too much red tape, which needs to be reviewed but regardless of what happens down the line there is a fundamental point regarding regulation in financial services.

People who have gone through this crash will experience these issues as will those who will be here in 25 or 30 years. They will be able to relate back to this period because it will be very fresh in people's minds, along with the difficulties experienced.

In the late 1970s after our entry to the Common Market in 1973, an enormous sum of money was available, in particular to the agricultural industry. People involved in agriculture bought neighbouring agricultural lands at exorbitant prices and it took a generation of farmers to work off the debt that was created. The Government of Garret FitzGerald that followed brought in a debt relief system to try to help those people out in regard to the money they had borrowed. That happened less than 30 years ago.

The fundamental point we must learn in regard to this Finance Bill and the future is to ensure that arising from the desperate lessons learned by Irish society from the crash of 2008, the huge difficulties experienced by families across the country, especially those with high mortgages and young children, or those who have lost their jobs, we should never allow any lapse in the draconian regulations which are now being put in place. We must ensure this is documented in every Department of State. Whatever benefits may be seen in the short term, in 25 or 30 years' time we must reflect back on this period and never again allow the madness that went on in financial institutions.

I am delighted to contribute these few words to the debate on the Finance Bill which is one of the most important and fundamental of its kind to come before the Houses of the Oireachtas. I thank the Leas-Cheann Comhairle for the opportunity to contribute to the debate.

Deputy Timmy Dooley has ten minutes.

I welcome the opportunity to contribute on the final piece of legislation in this Dáil term. I hope some of us will be back with an opportunity to discuss other legislation in this House. I wish all colleagues on all sides of the House who are contesting the next election the very best of luck.

It was a rare privilege for me to be in the Chamber when my good friend and countyman, Deputy Michael D. Higgins, gave his final oration to the House. I have listened to him on many occasions, from when I was a young individual interested in politics, albeit of a different colour. Nonetheless I always recognised and respected the Deputy's clarity of thought and mind, his deeply held convictions and the way in which he has championed so many good causes around the world, not only in Ireland or in his native County Clare, Galway or the west of Ireland.

It is often said that all politics is local, and that it is necessary to focus on the potholes and streetlights and street corners. That is surely very much part of political life but it is interesting that Deputy Higgins has spoken of the necessity to change the dynamic within politics. That needs to be addressed. He is and has been a great champion of equality and is someone who has reached out to those who are less well off not alone in this society, but throughout the world. This country owes him an enormous debt of gratitude for his work in that regard. I wish him well in his retirement from this House. I do not wish to suggest it will be the end of his career in public life because I know he has interests elsewhere. I have no doubt he has the capacity to take on any role he sees appropriate or fit. I extend my sincere best wishes to him and his family for what lies ahead.

I thank Deputy Dooley.

With regard to this legislation it is clear we are facing a very difficult time as we have done from the start since we were elected in 2008. Those of us who came into the House at that time found ourselves dealing with issues that had begun to emerge in late 2006 and very quickly we were into a discussion about economic issues. There was a time when the economy was discussed only in the business pages ofThe Irish Times, perhaps in some journals or in the Financial Times or other media. However, from mid or end 2007 onwards, economic matters were on the front of every publication regardless of its readership or its import in general economic terms. Clearly, that has had a major impact on the lives of so many people in this country.

The most important point those of us on this side of the House must recognise is that mistakes were made. From 2002 to 2005 or 2006, it is clear that the economic policy that was developed and became the general ethos across Europe, namely, increased public spending and reduced taxation, was a model that was not sustainable. In this country the fact that we were going through our own property bubble and had become overly dependent on the transactional taxes within the property sector made the situation significantly worse.

I accept that responsibility as a parliamentarian and do not wish to be party political in regard to the last piece of legislation going through the House. However, it is worth recognising that in any budget speech one cares to research, comments by the Opposition, our opponents on the other side, clearly identified the weaknesses in the policy we put forward. However, it was not a weakness to suggest what we were doing was wrong in the way we now believe it was. The weakness was that we were not spending enough and were taxing too much. On many occasions there were speeches, Adjournment debates and parliamentary questions relating to the level of regulation and unnecessary red tape and bureaucracy that existed. In accepting responsibility or that mistakes were made, it would be welcome if all sides of the House accepted their involvement in the general lexicon, discussion and debate that existed.

Deputy Durkan and I will differ——

——for sure on specifics but it is important that we look at the broader framework——

I will have to deal with that.

Deputy Dooley only, please.

——and at the area which we all accept in this last period.

Clearly, the necessity to resolve our banking crisis must continue apace. The ongoing suggestion that somehow we can burn the bondholders will disappear, I hope, when we get beyond the election. I understand there are people who are trying to seek to gain political advantage by taking the debate to the lowest common denominator but we must get beyond that and will do so on the other side of the election. It will be incumbent on whoever is in charge of the next Administration to continue with a set of policies and measures that ensures we have an effective banking sector. This is not to protect or somehow enhance the privileged who sat within the banking environment or within that ethos. It is to assist the person on the street, the small business holder or the farmer, the people I and every Member of this House meet on a daily basis. It is the small and medium-sized enterprises and the farming sector that will get the 460,000 unemployed people back to work in this country. It is true multinationals play a very significant part and the increase in exports is extremely important in order to bring about a renewed sense of identity for this country and a renewed sense of employment. Ultimately, however, the bulk of employment will come from small businesses doing what they always did — providing services to the people of this country. We cannot lose sight of that.

I also wish to recognise the four year plan of which this budget is very much an integral part. A most significant amount of funding has been set aside for the educational building programme, some €1.85 billion over four years. There is no harm in introducing a little bit of a local dimension. Yesterday's announcements set in train three very important school projects in my constituency, with a new school on a greenfield site for St. Joseph's secondary school in Tulla, something that has been sought after for many years. I was happy that the school management, including the current principal, Ms Margaret O'Brien, together with the former principal, Mr. Jimmy Cooney, and the respective boards of management entered a partnership with me and others such as Councillors Pat Hayes and Joe Cooney to bring about a situation in which the Department of Education and Skills was in a position to work through a new school programme. That is an important point.

In addition, the national school in Sixmilebridge will see a very significant redevelopment, with a major extension and refurbishment works that will resolve a long overdue problem. The new Ennis national school had made major headlines in national newspapers for seven or eight years but has been given permission to go to tender, which is a significant investment in educational infrastructure. That is a right for our children and, as importantly, the teachers who have a difficult job teaching in that environment.

There are many other elements which this Government, with participation from the Opposition, has been successful in bringing to fruition over the better years when money was available. Such elements included child care, the very impressive road network and investment in agriculture and tourism. These are the important areas which will assist us in the redevelopment of our economy. The building blocks and foundations exist upon which to build a renewed economic model that will, importantly, provide employment for our people.

Two important changes have been signalled by the Minister in the Finance Bill, which I welcome. I had been in contact in with the Minister about them, although I do not take sole responsibility for the changes as I am sure many other Deputies spoke to the Minister about them too. One relates to the universal social charge and its application to those individuals who currently hold a medical card. It was identified at an early stage that it was important for people on the medical card to be given a special dispensation and the Bill will now only apply the 2% and 4% threshold rates, which is important. The 7% rate as originally identified will not be applied.

It is important that this is not about relinquishing the saving, which is to be found elsewhere. I understand that the amendment recognises that the self-employed people earning over €100,000 will make up the difference. It is right and progressive that those who can afford it will pay while those on lower incomes are protected.

I am also pleased that the Minister has accepted many of the submissions on section 23 relief, with the measure proposed in the budget being postponed for a year and subject to an impact review. I indicated to the Minister that this would have a significant impact on tourism facilities and I am aware of a number of small hotels, guest accommodations on golf courses and some time share facilities which require this relief in order to maintain facilities and attract tourism. We are all aware that the urban renewal scheme was exceptionally good and we encouraged people to invest in areas of towns and villages which had fallen to rack and ruin. Some of these house are unoccupied currently but it is a pleasure to drive through some of these places and see the level of investment which has gone into them. It is right that a significant impact review be carried out to ensure that those who have invested are not bankrupted by the decision to invest in what was a Government programme.

I wish to share time with Deputy Jimmy Deenihan. I am sure he is somewhere in the building and will come to rescue me at some stage. It would be remiss of me not to comment on the speech from our colleague of many years standing, Deputy Michael D. Higgins. As always, he excelled in the area and it was a joy to be along with him during his travels through parliamentary life in this House, which some of us had the pleasure of sharing with him for most if not all that time. He is a fitting example of the true parliamentarian who can use the parliamentary system and the power of speech to achieve a great deal more than many others can achieve by other methods. He also does it with much less cost. We must all wish Deputy Higgins well in his further endeavours, which I hope will continue in the public life. I hope he will remember us as we travel around and that we will, after this joust, meet and greet with him again.

On the other matter before the House, I must take issue with my colleague, the Vice Chairman of the Oireachtas Joint Committee on European Affairs, Deputy Timmy Dooley. I do not accept any responsibility and neither do all of us in the House accept responsibility for the financial position in which the people of the country find themselves. The Deputy cites instances where people on Adjournment debates and at various times in years before the 2007 election called for expenditure on schools, hospitals and other places. What else would they do having been given the impression that the money was there? The phrase was used regularly that the country was awash with money.

A perception was created that there was money to burn, which was what the Government was doing. That is where the Opposition got the impression there was money to burn and it could be seen all the time. What has happened over a long period is outlandish and outrageous. Experts have come to an agreed conclusion that what was going on from 2002 to 2007 was wrong and I cannot understand why people did not call a halt to it. There was a handful of people who tried to but were despised as being uncharitable, unpatriotic and unfit to be Members of these Houses of Parliament. It is extraordinary that people were afraid to ask questions. We had to couch parliamentary questions in such a way as not to offend those who claimed that any mention of the war, for want of a better description, would cause immediate implosion. It was coming anyway and the longer the process went on, the more serious it became.

I take no pleasure in saying this to colleagues across the floor at this stage. I have no doubt that some of them did not see this coming but I cannot understand why on a regular basis we were fed a diet of hope, support and encouragement to carry on as we were, as everything was all right and the fundamentals were correct. The fundamentals had not been correct for at least ten years and I cannot understand why the experts, support staff and advisers in the Government did not shout "Stop".

I have a theory about this. There were many advisers paid for by the taxpayer in elevated positions, reassuring the Administration that it could proceed as its course of action was right. In the old days in royal courts throughout Europe there were always people in support of the monarchy, such as jesters, advisers and soothsayers. An unfortunate jester might be brought out when the monarch was in bad form and be harshly treated if a jest was in bad taste.

Things have not changed much.

Yes, and that is exactly what is happening. Unfortunately, it is the people who were treated like jesters in this case. They have got the back of the hand to the head and been told to get down below. We have heard the tales of people who have received a cut in wages and child benefit. The cuts take in several areas but there was no cut in mortgages; such payments are likely to increase because of raised interest rates. Sadly, every household in the country is affected in various ways, which is shocking.

The one lesson to be learned is that this should never happen again. Such events have not happened since the 1920s but it should never happen again. We hear much about reform of the institutions, with calls for changing the old ways. A retired but prominent French politician, reacting to similar calls, retorted by arguing that established old ways worked for several generations in banking and finance. What are referred to as old-fashioned economics worked nonetheless, and the people did not get bitten or squeezed. People survived because of lessons from the 1920s. Unfortunately, new ways were found and the old ways were forgotten. New methods did not work, so this politician's comments were true. What we had was a newfangled game of economics which gave people the impression that they could continue to enjoy the same lifestyle without responsibility. The Government created this perception. I feel sorry for those who led that Administration and the manner in which they influenced people. We must now pay back everything.

Ireland was fortunate to have received a loan accommodation from our colleagues in the International Monetary Fund and European Union. I hate to think of what would have happened if the IMF and EU had scoffed at us. For some years, these bodies believed the Irish economy was running wild and they could not understand what was happening here. We should not be surprised, therefore, that people look askance at this country and ask what happened to our economy. We were running it on borrowed time.

Unfortunately, the impact of the recession will be much more serious than anticipated. We do not know how various Deputies will act tomorrow but it is possible the Finance Bill will not pass. Such an eventuality would send an unfortunate, unwanted and unwarranted signal to people outside the jurisdiction. If we, as Members of Parliament, do not immediately accept our responsibilities, the pain will be extended further than the four years of the current plan. Devices will explode in the faces of our people — I speak metaphorically — over the next four years, placing further burdens on their backs.

I am sorry I do not have sufficient time to develop this subject. I hope we have learned a salutary lesson. Let us ensure that such a lesson will not be visited on a hapless people again.

I am pleased to have an opportunity, however brief, to speak to the Finance Bill. This is the final debate of this Dáil. I have been a Member of the House for the past 28 years and have always tried to participate in the annual debate on the finance Bill. As other speakers noted, this is the most important legislation that comes before the House. It should be debated energetically and Deputies should participate in it. Our parliamentary system could be reformed to some extent to enable more Deputies to participate in the debate.

Anyone who has been on the hustings in recent weeks will have realised that people are very angry with the Government and politicians in general. There is a perception abroad that we are all paid too much. People are maddened and riled by the severance pay available to politicians. Ministers who have served for a long time in the House are leaving politics with large gratuities of more than €300,000. From the point of view of the body politic, this Chamber, irrespective of which party or parties are in power, will have a major job to do just to restore the credibility of the political system.

I have never received as many observations and e-mails from abroad asking what is happening in Ireland. They have come from New York and Sydney and from people in the Irish technology network in the Silicon Valley who are doing their best to bring industry to Ireland. They have brought CEOs such as Craig Barrett to Dublin, Belfast and Limerick in the past three years and must now watch as the people they are trying to help destroy what they are trying to promote. This is a serious contradiction and the next Government will face a major challenge in trying to restore our domestic finances and credibility, which has been severely damaged all over the world. This country is being lampooned and caricatured in the world's media. We have seen examples of colleagues in this House being unfairly caricatured abroad. We face a major challenge in restoring the economy and the country's pride and image. If we continue inflicting the damage being inflicted at present, it is only a matter of time before those who are trying to help us become weary.

I ask the officials present to bring to the Minister's attention a specific provision of the Bill, namely, section 25 which provides for the abolition of the tax exemption provided for in section 234 of the Taxes Consolidation Act 1997 for royalty and other income arising to an Irish resident, individual or company in respect of a qualifying patent. The provision in the 1997 Act is encouraging creativity at a time when we are trying to foster innovation and invention. As the United Kingdom takes steps to introduce a similar tax exemption, the Government proposes to eliminate the Irish tax exemption for patent income.

We are trying to create a smart economy and encourage people to enter research and invent new products. The proposed abolition of the tax exemption on incomes from patents will have a serious detrimental effect on efforts to encourage young people to be inventive. It will result in Ireland losing some of its youngest and brightest inventors to the United Kingdom and other countries. Malta, for example, introduced highly attractive provisions in its tax legislation last May, while Belgium provides an 80% allowance on patent royalties.

All over Europe, Governments are examining the issue of invention and research. We had the age of invention during the industrial revolution in England in the mid-19th century. We also had a technological revolution. We need a different type of industrial revolution, one that encourages people to think for themselves and invent. I am encouraged by the large number of young people who are producing new ideas. If they are discouraged by this measure, the legislation will have been counter-productive.

In 2007, Goodbody Economic Consultants produced a report on the Irish tax exemption for income from patents. It pointed out that the Irish research and development tax credit scheme is less generous than that of some of our European competitors and suggested the scheme be improved. I appeal to the Minister to modify the proposal. It could, for instance, scale back the level of relief to 50%. It should not be eliminated but left on the Statute Book in an amended form. If this country is to be rescued it will have to be done by people's ingenuity and intelligence. It is not just the company that gains in this respect but also the inventor. Because of corporation tax, the company would not have a lot to gain from the tax exemption, but individuals within the company are the ones who will drive exports in order to gain more from this provision. I will rest my case there.

Debate adjourned.