Tax Code.

I welcome the Minister of State, Deputy Martin Mansergh, to the House and congratulate him on his recent appointment. We are all delighted to see somebody who served time in this House being promoted from within the ranks.

The issue I wish to raise concerns tax rebates for people who park their cars at train stations to travel to work. We welcome the major improvements that have taken place at some stations around the country because this has led to a much easier commute for people. They no longer have to wade through muck at stations, but have proper parking facilities and can walk in comfort to the platform. There has been major improvement, but this must be paid for. We have seen charges introduced at stations like Ennis, Mallow and, in my area, Stamullen and people must now pay approximately €250 per year in car parking charges, on top of their train fares to and from Dublin daily.

These charges discourage people from using the car parks in order to take the train to work, particularly if they have an alternative means of travelling. Some people choose to drive all the way to Dublin. If they have parking at their place of work, they may choose to use that rather than pay the extra €250 per year in car parking charges.

The Government is trying to encourage the use of public transport. Projects such as these car parks can help to encourage people to commute by train, but we need to do more. Bearing in mind the ambitious targets we have to reduce emissions, we need to do what we can to ensure people use public transport. Would it be possible to include car parking charges in the tax rebate structure? Currently, people can apply to get tax back on their commuter travel tickets. Would the Minister be willing to consider including car parking charges at stations into that tax rebate structure?

I thank the Senator for his kind comments. I am glad to be back in the Seanad, this time in a speaking capacity. I have fond memories of my time here.

I am pleased to have the opportunity to address the Seanad on this matter, one on which I have some personal experience as I sometimes park my car at railway stations in either Dublin or Tipperary. Yesterday, I spoke in the Dáil on the broader subject during the debate on the Dublin transportation authority and referred specifically to park and ride facilities, which are necessary if full use is to be made of the extra public transport capacity being provided as part of Transport 21.

In the matter of provision of park and ride facilities, the Government has made available considerable resources. Iarnród Éireann has begun a network-wide programme of expanding existing or developing new car parks with the assistance of Exchequer funding to cater for record demand — up 45% since 1997 to 43 million passenger journeys in 2006. Its policy for new car parks is to introduce a pay and display facility, with nominal charges to cover running costs of the facility and ongoing maintenance. This represents the cheapest pay parking in the country, and is often significantly lower than that charged by local authorities for on-street parking, for parking at local authority facilities adjacent to rail stations, or the fee for Luas commuters. larnród Éireann intends over time that the majority of parking will be pay parking.

Guiding principles for the implementation of rail-based park and ride sites developed by the Dublin Transportation Office provide, inter alia, that rail users only should use park and ride spaces, and may have to pay to use them and that those who benefit from park and ride should contribute to the cost of providing and maintaining it. The charges being imposed by larnród Éireann to cover operational and security costs are to discourage non-rail users from taking spaces and to reserve spaces for those who have to use a car to access the station.

With regard to the tax reliefs available to encourage the use of public transport, the position is that in the context of budget 1999, an exemption from taxation as a benefit-in-kind was provided for certain commuter travel passes given to employees by employers. I was a member of the tax strategy group at the time. I remember the issue being discussed and as a keen supporter of public transport was very much in favour of it. The provision allows employers to incur the expense of providing an employee with a monthly or annual travel pass without the employee being liable for benefit-in-kind taxation. The public service supports and operates the scheme. I am aware of that because I purchased an annual ticket in 2002. As a former member of the Oireachtas Joint Committee on Finance and the Public Service, I have urged the Revenue Commissioners and others to ensure the provision is more widely publicised.

The exemption applies to passes issued by CIE, its subsidiaries and operators who have a licence under the Road Transport Act 1932, as well as Luas services. The exemption was further extended in 2005 to include passes for travel on commuter ferry services which operate within the State in respect of journeys which begin and end in the State.

The scheme also accepts the use of the "salary sacrifice" system, whereby an employee agrees to forego or sacrifice part of his or her salary on the basis that the employer provides a travel pass, subject to conditions imposed by Revenue to ensure that the scheme is being operated in a genuine manner. For example, employees are only eligible to participate in the scheme as long as their commuter tickets are applied for and provided by their employer. Employers and employees must sign a contract setting out the terms under which they will participate in the scheme. The policy objective underlying the existing arrangements is to encourage taxpayers to use public transport when travelling to and from work and thus contribute to the easing of traffic congestion and to the improvement of the environment.

This scheme has provided major benefits to employees and employers. The employee is not liable for tax, PRSI or health levy on the cost of the travel pass while the employer does not have to pay employer PRSI contributions on the cost of the pass. Employers can realise PRSI savings of up to 10.75% while employees can save up to 48% of travel costs as a result of tax, PRSI and health levy savings.

Overall, the scheme has proved very popular with both public and private sectors. The most recent figures, supplied by the main public transport providers, show the number of travel passes provided by the scheme has increased from 894 in 1999 to some 41,388 in 2007. The message is beginning to get through. These figures include both monthly and annual passes. The cost of the scheme, in terms of tax revenue and PRSI forgone, is approximately €10 million annually. Perhaps one would need to calculate against that the fact that increased use means less subvention.

The extension of the scheme to include the cost of parking facilities at train stations would involve additional loss of tax revenue and it is not clear that it would contribute significantly to a reduction in traffic congestion. It could possibly encourage increased and not strictly necessary use of parking spaces. The daily charge for the parking facility at stations has not acted as a serious disincentive to the use of those facilities. Free parking is provided by local authorities at some stations and the proposed change in tax would almost certainly lead to charges being introduced or increased. While all tax reliefs and exemptions are kept under review, especially in the context of the annual budgetary process, there are no plans to extend the scope of the scheme in the manner suggested. Tax reliefs can be worthwhile but they also reduce the tax base and can make other more general reforms of the tax system more difficult.

One would need to consider the dynamic effect of allowing tax relief and whether it would increase pressure on available parking spaces. To find a parking space at the Luas stations in Stillorgan and Sandyford one would need to be there at 8.30 a.m. At Limerick Junction or Thurles one may have some difficulty finding a parking space unless one goes very early. The Senator does not suggest parking places remain free and one of the merits of some charge is that it reduces what one might call unnecessary pressure on parking. Nevertheless, the points raised by the Senator will be borne in mind in the context of the annual budget and Finance Bill process.