Dáil Éireann díospóireacht -
Wednesday, 2 Jun 1993

Vol. 431 No. 7

Finance Bill, 1993: Report Stage (Resumed) and Final Stages.

Debate resumed on amendment No. 1:

In page 11, between lines 16 and 17, to insert the following:

"1.—No arrangement, compromise or settlement in respect of any liability for income tax or income levy, shall be made, where such arrangement, compromise or settlement would amount to an arbitrary or invidious discrimination between the taxpayer or class of taxpayer and taxpayers or classes of taxpayers who have complied with their obligations in respect of such taxes.".

—(Deputy Cox.)

Ms McManus

Before lunch I referred to an issue which is prevalent in my constituency, that is, homelessness. As recently as last night, the tax amnesty was presented as a solution to the problem of homelessness. It struck me as warped thinking that one matter could be seen as a solution to the other; rather, one is the cause of the other. On reading a letter in today's Irish Times this question was reinforced in my mind. The writer asked: “what sort of primeval mercantilist mentality induces a Cabinet to put out a story that `if only we could attract the money back home, it would create jobs'?”. That is a good question which needs to be answered.

The Government issued a statement in the last couple of hours in relation to the tax amnesty, from which I will quote because it is of relevance to this debate. It states:

The Government at its meeting this morning confirmed the decision taken on 25 May to provide for an incentive scheme in respect of certain categories of undisclosed tax liabilities.

This scheme, which will offer partial relief of the tax due as well as remission of interest and penalties, is intended to: provide those who failed to meet their obligations in the past with a final opportunity to regularise their tax affairs, in advance of the introduction of more stringent penalties for tax fraud; facilitate the use for purposes of general economic benefit of funds arising from tax evasion, whether held dormant in Ireland or abroad; secure the highest possible proportion of undisclosed liabilities from the period prior to April 1991, bearing in mind that such evasion is difficult to detect at this remove.

In considering the detailed provisions, which will be the subject of early legislation, the Government will endeavour to strike an appropriate balance between these immediate aims and wider considerations, notably maintaining the integrity of the tax system and protecting ongoing revenue-collection. To that end, it is the Government's intention to introduce stringent penalties, including imprisonment, directed at those who abuse or ignore the opportunity to become compliant for the future and at enhancing the effectiveness of tax-enforcement generally.

I do not know whether the issuing of this statement was an attempt by the Minister to hold back the tide of public anger — King Canute adopted a similar approach.

I congratulate the Minister on the delicacy of his language and the sensitivity of his prose. I might even recommend that his statement be referred to Roget's Thesaurus. That delicacy is maintained throughout the statement is a tribute to the Minister's use of language. There is no mention of amnesty in the statement; rather the Minister uses the term “incentive scheme”. If that term were included in a thesaurus, written after it probably would be: amnesty, gift, reward, present, licence. Another term used in the statement is “undisclosed tax liabilities”. Beside that term would be: tax cheating, tax dodging, daylight robbery, white collar crime. Also used is the term “general economic benefit”, beside which might be; land speculation, inflated property prices as in Mespil Road, golden circle and so on.

The Government will endeavour to strike an appropriate balance, maintaining the integrity of the tax system, but only after it has ripped apart the tax system. It intends to protect ongoing revenue collection. However instilled into every law-abiding tax paying citizen will be a deep-seated burning resentment at the injustice of the amnesty. As a result of that justifiable anger and resentment there will be further loss of integrity in terms of our tax collection system. People in the community expected and hoped after all the controversy for a tiger of a statement, but what they got is a kitten, gentle, soft and tame.

Miss Quill

And sly.

Ms McManus

I accept that amendment — gentle, soft, tame and sly. It has teeth, but they are the baby teeth of a household pet, not the full sized canines the public was waiting for. The whimper in the tail of the statement is the mention of imprisonment for tax fraud. I understand that there were already penalties of imprisonment for tax fraud, although I am open to correction on this matter.

If people defraud the State, fill in forms misleadingly or lie, the framework is already there to put them in prison. Awareness that people are cheating the system is not new. It is a matter that comes up in debate on every Finance Bill. Penalties have been put in place to deal with people who are ripping off the State. The fact that nobody is behind bars does not mean that we do not have the power to put them there. The matter has come up year after year since the great tax marches when thousands of PAYE workers took to the streets and demanded justice and equality.

This threat about imprisonment has been used as an indication of the Government's resolve. The threat has been made but it has never been followed up. The little boy who cried wolf did something similar. This time, even if the Government is serious about doing something nobody believes it because the evidence belies its words. The political will is missing to deal with this problem once and for all on the information already in the Government's hands. The thirst for justice is missing. If somebody robs £60,000 from a labour exchange, as happened in my home town of Bray recently, and if somebody defrauds the State of £60,000 in tax, the net result is the same but the result for that individual is markedly different.

Mr. Davern

An ex-member of the Deputy's party in the past.

(Interruptions.)

An Leas-Cheann Comhairle

The Deputy without interruption, please.

Ms McManus

It is interesting that no one sees the blindness on the part of the Government to the crime we are talking about. Why is crime tolerated when it is committed by men in three-piece suits with the proverbial red braces in air conditioned offices? Why is that crime tolerated by this Government while crime committed by young lads in denim jackets who are half starved in body and in spirit out in the street, is punished with jail? There is no problem, and no questions are asked. We just get those lads in as quick as we can. That is the double standard that the Government is responsible for, the double standard that only sees the poor person committing a crime but never sees the big fish who is ripping us all off. It is blind in the way my colleague here is blind to that form of crime. The people out there are not as blind. They are well aware that they are being ripped off.

I was considering today the whole question of putting people in jail. Being put in jail is not the end of the world. In Britain if one is caught for tax evasion one is put away. We have the most famous example of all in Lester Piggot who was imprisoned for a year for tax evasion. When he came out, he so impressed the trainer Vincent O'Brien that Lester Piggot returned to the saddle and has done very well. He won the Breeders Cup in New York and went on to win the English and Irish 2,000 guineas.

An Leas-Cheann Comhairle

We must keep to the subject. You are not the only culprit. This amendment has taken on the contours and the format of a Second Stage debate.

Ms McManus

I accept your criticism and I will certainly come back to the amendment.

Mr. B. Ahern

I was hoping the Chair would let her finish the point because Lester Piggot might be just about finishing.

Ms McManus

The Minister must suffer a little more. I can only say that he asked for it.

One question the Minister might consider as he sits there impaled in his seat, is why he does not act now with the penalties he has as his disposal. What is holding him back? There was a question as to whether there was any information or assessment as to the amount of money that is out there. The Minister at the recent Select Committee on Finance and General Affairs said that there is no doubt that the moneys exist, that he had access to substantial information from both inside and outside the country about where the money is and that we must do something with it, but that that is a matter for another day. Why is it a matter for another day? If all the criminals and crooks in the land were advised that the State knew about the crimes they were committing, knew where they had the loot stashed and that doing something about it is a matter for another day, there would be an awful lot of happy criminals about. Rather than proceeding with this tax amnesty the Minister might set up a task force to go after the money he knows is there. I have no doubt that when he starts to probe around, more information will come to light. If he gives the resources to the Revenue Commissioners and ensures that they have access to the accounts of public institutions, the Minister will be in a very good position, in a fairly short space of time, to take credit for achieving what has never been achieved — the first step towards tax equity. People would be willing to operate within a tax system that was fair, and when people cheated they would be punished rather than rewarded. A lot of kudos would attach to the Minister if he adopted that approach rather than buckling under to the tax cheat and to the super rich. If he did battle rather than buckle we might make some progress. If the Minister defended the public interest, and the principles of justice and equity, he would have the support of the Opposition. I would support a Minister who went along that track or indeed a cabinet made up of Fianna Fáil and the Labour Party if they adopted an approach leading towards tax equity. None of us expects miracles, but we expect a certain integrity, a certain fighting spirit, in protecting those law abiding people who pay their taxes and who are increasingly wondering why they bother.

Mr. E. O'Keeffe

I am rather surprised at the attitude adopted by the Opposition on Report Stage of the Finance Bill. They have let this taxation issue take up all the time. They have been so concerned about taxation and the problem it poses for the people that they have found a way to disrupt the whole Report Stage of the Bill. I have never heard more exaggeration than I have heard today from the Opposition, mainly made up of the Progressive Democrats grouping and Fine Gael.

Listening to Deputy McManus, one would think we lived in the wild west. She can look across at Europe and see what is happening in France, England and all the economies, where they are having to change their outlook, and where capital is more important to them. She also referred to the homeless in Bray. All I would say is "God help the homeless in Bray". If her party got into power they would never see a house built. The way she wants to run this economy, houses for the people who most deserve them would not be built. Her claim is that she would fill the prisons and would return us to an eastern bloc style Government system that has been much criticised. She wants to get back into that whole area again.

Were it not for Deputy Davern, my colleague and good friend, who was a Minister for a short time and who definitely left his mark in the Department of Education, we would not be here this afternoon discussing the very important topic of an amnesty. It is necessary to recognise that there are funds in excess of £2 billion abroad. This proposed amnesty is a recognition of that problem. We should stop the moaning and groaning and have this money repatriated and invested here.

Many of our people work abroad. They may have made small investments abroad which may have accumulated real wealth but they are nervous about repatriating that money, there being no mechanism whereby they can do so. There was reference to little people. These are the little people about whom I am concerned. They are capital-oriented and they like to make investments which, in many cases, may be substantial.

It is regrettable that this debate has been turned into what I might describe as street politics, endeavouring to criticise the Labour Party. Everybody knows my views on the formation of this Government. It is grossly unfair to single out the Labour Party for the kind of criticism meted out throughout this debate. By and large the Labour Party is progressive in its thinking. They are not blinkered, as are the Opposition on this issue.

On Monday Deputy Yates was looking for a levy of 10 per cent, whereas his Leader was seeking 15 per cent on Tuesday. What are they thinking of? If they cannot make up their minds and adapt some coherent approach to policy in Opposition it is a very sad day for our people, in particular those they represent. We have had Deputy Yates here the entire afternoon and his Leader jumping out of his skin trying to criticise the amnesty and gain some political kudos.

Deputy Cullen stated on 3 February 1988:

I particularly commend the Minister on the introduction of the amnesty. It has been the most far seeing and imaginative amnesty introduced for many years. I sincerely hope it is what the Minister wishes and that it will benefit the Exchequer.

I wonder why the change of heart. What encouraged the Progressive Democrats to change?

Mr. Cox

This Government propose writing off liability to tax.

Mr. E. O'Keeffe

Deputy Cullen continued:

By getting this amnesty, if it works, out of the way, and with real selfassessment being rolled in following on that, we could bring the taxation system, particularly in the areas which cause concern, up to date. This could mean an effective return to the Exchequer. We would not be pretending every year that there are £600 million, £700 million or £800 million owed to taxes when most of it is assessed and notional, and does not have any real relevance.

They are the facts, so why has there been a change? Why are they seeking the high moral ground, looking for the cheap publicity? They want to woo the misfortunate taxpayer.

Deputy Michael McDowell has been writing in the papers. He should remember that he is a legislator elected by the people. He had the hard luck once to lose his seat but he is back again. He talks about the Supreme Court. Has he disowned this House? Is that precisely what he is endeavouring to do, encouraging people to go to the courts? It would be very serious for somebody of his background and academic ability to contend that the proposed amnesty is contrary to the Constitution. We are the people who make laws, who should protect the law. We should not encourage people to go to the courts.

The Revenue Commissioners' attitude to taxation has frightened people. People who accumulate wealth are those who must pay tax or will experience difficulty with the Revenue Commissioners. Many people are nervous of approaching them. If a query arose they would prefer to ignore it rather than face up to it. More recently the Revenue Commissioners appear to have adopted a more businesslike approach, which is to be welcomed.

I am aware that passports of constituents of mine have been taken from them. That is very extreme, since the Special Branch or Garda rarely, if ever, take one's passport. That is something that would frighten me. A change in attitude on the part of the Revenue Commissioners is to be welcomed. I believe that we will see a different taxation scene henceforth.

This suggested amnesty is welcomed by the community in general. By and large amnesties are based on compassion, on a desire to help. This amnesty will bring much-needed money into our economy. It is vital to our economy that business be developed. If we can generate more wealth there will be greater liquidity within our economy which will help further in reducing our interest rates, there being more money available for productive purposes. Yet there are people in this House who are trying to knock this proposal. Not one single constituent has phoned or written complaining about the proposed amnesty. Rather I have met people who have said that it is the intelligent and right thing to do. I fail to understand the attitude of the Opposition.

We have heard talk about scandals that took place here. Much of this talk was in public houses. These matters will cost this country many millions. An inquiry into one such scandal will cost us in excess of £50 million. The suppliers of stock to the company concerned and the purchasers of their finished product experienced little or no difficulty but somebody in between experienced many problems. With that kind of attitude in our society it will be difficult for our economy to grow.

On the repatriation of this money, whether it be £2 billion, £4 billion, or £1 billion, I fear that the Revenue Commissioners will have a list of names available to them and that those people will be subjected to greater audit and scrutiny than others. There will have to be some safeguards incorporated in the Bill that will come before this House to protect those people.

If we get these £2 billion, that will be a pittance vis-á-vis what we require for development. Our county roads need development and we have a housing programme we want to complete. There is a real shortage of capital. That was highlighted in the House recently when the Greencore shares were for sale and there were no Irish takers. It proved that we are a very small, limited economy, that we need money. We go to Europe, to Brussels and Strasbourg, begging continually. We are told we will receive £8 billion in Structural and Cohesion Funds. We have £2 billion of our own so what is the problem? Why are people so annoyed, so worried about this proposal? Why are they trying to make criminals of people who invest abroad or who earned that money abroad and invested it there? It is regrettable that such should be the case. I would encourage the Government in this far seeing proposal. I am glad that their Labour partners have identified themselves with it, knowing that it will improve our economy.

I compliment the Minister for Finance on his patience in recent weeks in the course of the Committee and Report Stages of this Finance Bill, which will be concluded at 6.45 p.m. this evening. The task of the Minister for Finance is difficult. I admire his patience, endurance and the way he has listened to us today.

Miss Quill

In relation to the last speakers' contribution may I say to the hapless Minister sitting over there that, with friends like him who needs enemies? Having said that, I would have to give credit to Deputy Ned O'Keeffe who, unlike most other members of his party, had the guts to come into the House, speak his mind and say what he had to say. That must count for something.

To paraphase Shakespeare's Hamlet, something is rotten in the State of Ireland. There is an old Chinese proverb that says “a decaying fish rots from the head down”. The majority of decent people know where the rot starts. That is why when given the opportunity last November they voted for change. They genuinely wanted to move away from the politics of the nod and the stroke and from a position where a small number of people were on the inside track, the golden circle. The ordinary people wanted to see this country run in accordance with the best principles of a modern democracy and public funds raised and disbursed in accordance with the principles set down democratically in this House. They wanted to turn their backs and walk away from something they did not want to be part of. They wanted change, but look at what has happened.

It is ironic that the Labour Party, which preached long and hard against the politics of the stroke, can consent to the amnesty that is being proposed. Indeed it has consented to many other proposals since the Government was formed. As I look across the floor of the House, as I do every morning on the Order of Business, I can only conclude that the Captain's Lady and Judy O'Grady are sisters under the skin. I listened to what members of the Labour Party had to say in this House this morning and read their comments in their local newspapers about this amnesty. They made the case, particularly on the local radio and through their local newspapers, that this money could be used to make proper provision for the mentally and physically handicapped. I hold that comment in contempt; it is a spurious and spacious argument.

For the mentally handicapped, their families and those who care for them it adds insult to injury, because they have been neglected for years. How are we going to make it up to them in this shoddy, shabby way? While other public services can be financed using funds raised through legitimate channels and in the proper manner, the mentally and physically handicapped will be given this "dirty money". Having regard to the manner in which it was made, stashed away and will be brought back, it would be nothing more and nothing less than "dirty money". If this tax had been collected from the people to whom this magnificent concession is being given in the same manner as tax is collected from PAYE taxpayers and if proper provision had been made for the Revenue Commissioners to collect this tax in the first instance, services for the physically and mentally handicapped would not be funded in the manner in which they are now funded.

The physically and mentally handicapped are not the only victims of our failure to reform the taxation system. This is what the Progressive Democrats have been trying to do since their inception and tried to do consistently when in Government. If our taxation system had been reformed and if proper resources had been provided for the Revenue Commissioners, this money would not have been taken out of the country in the first instance. It could have been used to make proper provision not alone for the mentally and physically handicapped but also for the many others who have been victimised.

When I speak of victims I am thinking of small children in the most overcrowded classrooms in the European Community and of overstressed teachers who are trying to educate these children in such conditions. I am also thinking of the elderly who are growing old, fragile, whose health is failing, who know that proper provision has not been made for them so that they can be cared for in the community. I further think of the thousands of people, many of whom are to be found in my own constituency, who are living in the most appalling conditions while awaiting the provision of local authority housing.

These are some of the victims of the practice which has been allowed to develop whereby tax dodgers can do what they wish and run rings around the tax collection system. Yet, these are the people for whom this amnesty has been designed. They are being granted special privileges, offered special conditions and given special concessions. Is that not a scandal? It was one thing to allow them take this money out of the country in the first instance, but it is a scandal that this amnesty is being extended to them. I am filled with rage. I have been a PAYE tax payer since I was 20. One of these days I am going to find out how much tax I have been required to pay since I first started work as a single woman — I am only one of thousands — and what benefits I am now entitled to.

Even as I speak parents in the PAYE sector are looking at their bright children who will start their leaving certificate examinations in four or five days time. They will bid for points in the hope that they will get a place in one of our third level colleges but in the knowledge that, if they do not, their job prospects will be seriously diminished. Parents are asking themselves the question: if their children get enough points, where will they get the money to pay their fees. Thousands of people in the PAYE sector have had to take out a second mortgage and large loans from the banks to meet educational expenses so that they could give their children the best start in life.

I am talking here about ordinary people; nurses, gardaí, teachers, civil servants, local authority workers, those who work in factories, on trains and buses up and down the country. These are the people who are the backbone of this country. They have paid their taxes in the belief that they would enable better provision of public services for people who are not in a position to pay their taxes. I am certain that these caring and patriotic people would gladly pay their tax if everybody else was required to pay in the same manner and at the same rate. At the end of the day all they want is justice and equity within the tax system.

The proposed amnesty is the greatest travesty of justice I remember since I started to pay tax as a PAYE worker. Deputy Ned O'Keeffe, whether deliberately or otherwise — I suspect otherwise because he is no fool — argues that this amnesty is the same as those previously granted, but nothing is further from the truth and Deputy O'Keeffe knows that. The fact that we have to offer an amnesty points to the failure of our system. The terms of the previous amnesty were based on some principle of justice, and the persons who availed of it were already on the books of the Revenue Commissioners. The concessions offered were very small compared with the write-off that is being offered under the terms of this proposed amnesty. There is no comparison and to attempt to make comparison is a savage attack on the truth, and that will not wash.

I feel sorry for Members who seem to believe that their utterances in this House during this debate will be believed by the general public. That is to under-estimate the intelligence of the public and their capacity to understand what is happening under the terms of this proposed amnesty. Deputy O'Keeffe would want to bear that in mind. It pains me particularly since he happens to represent a part of the country that I represent. He is very foolish to try to under-estimate the intelligence of the people that live in that county and city. I would not try to do that. When the Deputy goes home to his constituency at the weekend — if he has not had phone calls to date — he will have phone calls because to be doing what is proposed is one thing but to be trying to justify it in his terms is another. That message will go out from the people of Cork.

I have spoken of the huge requirement that has been put on PAYE taxpayers since the foundation of the State. Does that requirement finish when the active working life is over? Not at all. We are hounded while we are working and when the time comes for us to retire we are hounded on the double. If you happen to believe in a philosophy that you save for the rainy day, make provision to be reasonably well looked after in your old age, or even to leave something to your children, the tax man comes after you, relentless to the end. The only day you get an exemption is when you are put in the box. It is a scandal that pensioners who have made huge contributions to the growth and development of the public services in this country through their PAYE tax contributions are hounded for tax in their declining years. Yet we try to justify an amnesty for people who could not care less about this country. We are now making concessions and making it all right to repatriate the money that will benefit them better by having it here. We are talking here of a puny 15 per cent.

This amnesty is a disgrace and if this is the road this Government is taking, we are going in one direction only down the road to a jungle of corruption. To give him credit, I do not think the Minister's heart is in this measure. It is not his style. I know it has neither the blessing of the Department of Finance nor of the Revenue Commissioners, the people who have been trying to keep the ship of State afloat for very long time. I appeal to the Minister to let his better judgment prevail, to follow his own good instincts, withdraw the amnesty and support the amendment that is being put here so clearly and so eloquently by Deputy Cox. I am asking the Minister to do that in the interests of preserving the integrity of the tax system and the democratic principles of this country. People like my father went out to fight for this country in the belief that people of my generation would be fit to govern themselves and keep in place proper democratic principles where every citizen in the State would be treated equally before the law. That was my understanding of what it means to be a Republic and that was his understanding of what it meant to be a Republic. That is not the understanding of the present partnership in Government because we are now officially creating a two-tier State with one law for those who are law abiding and another for those who flout the law, who could not care about the standard of public services, who do not worry as to whether we can meet our bills at the end of the financial year. I beg the Minister not to give the legitimacy of this House to such people. There is an old saying in Irish: "Is fada siar a théann iarsma an drochbhirt". Roughly translated that means: the bad deed, the wrong deed may cast long shadows after it. This deed will cast long shadows after it. Let us confront people who are not paying their taxes in the normal manner and within the normal rules and regulations of the Revenue Commissioners and throw out this amnesty. The Minister will not live to regret it.

Mr. Molloy

Cuireann sé iontas orm nach bhfuil níos mó Teachtaí sa Dáil agus an cheist thábhachtach seo á plé againn. B'fhéidir gurb é an fáth nach bhfuil Teachtaí ó Pháirtí an Lucht Oibre agus ó Fhianna Fáil i láthair ná gurb iad na páirtithe atá sa Rialtas i láthair na huaire agus nach bhfuil siad féin róshásta leis an méid atá á dhéanamh acu. B'fhéidir go bhfuil náire orthu. Cinnte, ní féidir liomsa teacht ar aon tuairim eile ach go bhfuil náire de shórt éigin orthu nuair nach bhfuil siad sásta a bheith anseo chun seasamh taobh thiar den mholadh seo, más é sin an rud a gcreideann siad ann. Ach is é an rud is mó a chuireann iontas orm ná go bhfuil an tAire Airgeadais é féin sásta an moladh seo a chur os comhair na Dála, os rud é nach raibh sé den tuairim seo bhliain ó shin nuair a bhí mo pháirtí agus mé féin sa Rialtas leis. Ba mhaith liom an cheist sin a chur air inniu: cad a tharla ó shin chun athrú intinne a theacht air féin agus a pháirtí faoi rudaí den sórt seo. An é go bhfuil athrú ar chinnireacht, go bhfuil athrú ar fhealsúnacht an pháirtí sin de bharr na n-athruithe a tháinig sa chinnireacht sin? Más fíor é, agus ní féidir liom teacht ar aon tuairim eile faoi, feictear dom go bhfuil Fianna Fáil ag meath i bhfad níos tapúla ná mar a cheapas féin.

Lest the Minister does not understand me, rather than having him read it afterwards, I am questioning him on what has happened in the past 12 months to bring about such a change of attitude, a change of mind, a change of philosophy on his part when both he and my party rejected a suggestion of this kind only 12 months ago when the 1992 budget was being prepared. I wonder what has changed on the other side? We have seen a change of Government, with the Labour Party going into Government with Fianna Fáil. I would be surprised if that was the reason this proposal is being brought forward. I do not imagine that it emanated from the Labour side of the Government and I am amazed and disgusted that the Labour Party are supporting it. I have not yet understood the logic of the Labour Party position on this issue. I am amazed at the sea change that has taken place in the Fianna Fáil approach to this matter.

As the Minister is aware, a proposal of this kind was rejected out of hand by the Minister and his officials when the 1992 budget was being prepared. It was also rejected by the former Taoiseach, Mr. Haughey. The only changes that have taken place are that the Progressive Democrats are no longer in Government and that the leadership of the Fianna Fáil Party has changed. That is the factor I would identify as the reason for this change. I have heard my colleagues say here on a number of occasions that they do not believe the Minister could have been the author of this proposal or that he personally could be very happy with it. From the previous stands adopted in preparing budgets in the past, we are aware this is not the Minister's personal position and that the very strong arguments always brought forward by the Revenue Commissioners and the Department of Finance officials against proposals of this kind are still valid today. Nothing has happened to make them valid in 1993 and invalid in 1992. The only thing we can identify as having changed is the leadership which has brought about a major change in the philosophy of the Fianna Fáil Party, much to that party's shame. That party is going down the slippery slope much faster than I had thought.

The Fianna Fáil philosophy always showed concern for ordinary, decent, hard working citizens who down through the years supported this State and tried as best they could to live within the laws and financial impositions of the State in order to maintain the structures and the services of the State. They have suffered the highest level of income tax in the Community. They have made these sacrifices and willingly handed over to the State a high percentage of their income. They now must look aghast and in astonishment at the Government's proposal. Those smarter people — generally wealthier people — who had the money to buy the brains could find ways in which to avoid paying their legal dues under our taxation code and to shift their money out of the country through devious illegal means. Those people are now to receive the blessing of the Government and are invited to bring their money back in here on the understanding that it is welcome.

The aura accompanying announcements from Fianna Fáil gave one the impression that they would all be at the airport, clapping, applauding and cheering these wonderful citizens who were going to bring their illegal funds back into this country and that they were to be thanked and praised for it. What about the poor pensioners who had to pay tax on their measly incomes? What about the people working on the factory floor? What about civil servants at every level throughout the country who have had no opportunity to dodge their tax obligations and who have it deducted at source? Are they to stand aside and applaud this move? The Civil Service is totally opposed to this proposal. Department of Finance and Revenue officials are opposed to this proposal and could not possibly have changed their minds since the Progressive Democrats left office. We do not need the advice of Finance or Revenue officials or any other moral authority in the country to tell us that this is wrong. We know it is wrong. It is leading this country into a very dangerous era where the integrity of the taxation system will be undermined for the future.

If the Minister introduces an amnesty in this fashion now he is encouraging people from here on in to find every possible means to avoid paying their tax and to shift their money out of the country and just wait until the next amnesty is introduced when they can safely bring their money back into the country. The Minister is proposing to go down that road for the spurious reasons given by his party and by the spokespersons who have come in here, mostly from the backbench. Where are the Government spokespersons? Where are the more senior, more mature, more experienced members of the Fianna Fáil Party? Backbenchers have been brought in to try to give the impression that this measure is acceptable to the Fianna Fáil organisation throughout the country. It certainly is not. The greatest dismay is being expressed by people who have given loyal support to the Fianna Fáil Party and Labour Party supporters are astonished at this debate. The introduction of the amnesty will bring about a major change in the attitude of the public to the whole Government structure and the integrity of the taxation system as we know it. It is not too late to withdraw this proposal, and it is essential that it be withdrawn.

I understand the Minister is allowed to speak only once on Report Stage and he has chosen to wait until everybody has made their contribution. I do not know if that is satisfactory. It is not necessary for him to wait to be the last speaker. He could come in at any stage during the debate and make his own contribution which we would see as being the Government contribution. In view of the fact that he is holding back until all others have spoken in the debate, it appears the Government are still intent on proceeding with this ill-conceived proposal. If that is so, it is an alarming development.

It is astonishing that, despite the opportunity that has been presented, by the action of my own party, to re-think this issue, the Government has not yet seen the folly of its ways nor had the courage to come forward and admit that it was making a serious mistake and was prepared to make a change in regard to what it was proposing.

I heard the ridiculous remarks of the Taoiseach at the airport yesterday morning. They are astonishing and they defy logic. As somebody who has spent 27 or 28 years here as an elected Member, I find it depressing that standards in public life and the standards of leadership in this country have deteriorated to such an extent that the leader of the country is promoting a proposal of this kind and seeking to justify it with simplistic arguments, saying it is better to have the money here rather than out there and that therefore we should do this thing. It is absolutely ridiculous and indicates a very shortsighted approach on the part of the Government.

I wonder if the Government understands the level of anger that exists among the ordinary people who have been crushed by the taxation system? The reform of that system was one of the objectives of the Progressive Democrats. In despair people pulled out of other parties and established a new party in this country. One of the objectives of the new political movement that was founded by Deputy Desmond O'Malley, which I and other people joined and that people voted for, was to take a stand against this kind of thing, to take a stand against the crippling levels of taxation that Governments were piling onto the backs of hard working people in this country and to try to create a better Ireland by easing that burden and creating an opportunity for investment and for the entrepreneurial initiative of the Irish people to be used to develop our own economy instead of forcing our brightest and our best to emigrate and build economies abroad, as they have so successfully done. It has been proven time and again that whenever Irish people with an education have gone abroad they have done exceptionally well. In the main they have been denied the opportunity to succeed at home because of the structures we have put in place and the crippling system we have established. Part of that system is the overburdening weight of taxation, which gives nobody a chance to invest, to develop, to expand and to use his own individual expertise in creating something in Ireland which one would be proud of and which would create work for others. We will continue to struggle and limp along if some major change does not take place. That was the motivation for people like myself who left Fianna Fáil, people who left Fine Gael and left Labour. We have people who left The Workers' Party and supported our party. That happened because of despair at anything ever changing in this country. We are a small party and we may be looked down upon by the larger parties, so long as they are larger than us, but those parties should not under-estimate the anger and feelings of a huge number of people. Their loyalty will not always remain unbroken and many of the loyal supporters who have traditionally given their votes to the bigger parties have been having second thoughts about the way in which they cast their votes. As time goes on people will look to how they might exercise their vote. The party opposite need not assume that it will always command that huge percentage of the support of the Irish people it traditionally got in the past. This kind of action will change Ireland. The people do not have the opportunity to bring about change except at election time, but if one or two parties with 100 Deputies in this House can be in Government for five years an enormous amount of damage can be done to the economy and the future can look very bleak.

We have a duty and responsibility to take a strong stand on issues we consider important. We are determined that this item will be highlighted in this House and will not be allowed to slip through, as everything has been slipping through here in the past, with cosy arrangements, with, unfortunately, Fine Gael sometimes agreeing with Fianna Fáil and letting things slip through, and with excessive use of the guillotine. When I was first elected it was the exception to see a guillotine motion and there was always an outcry if a Government attempted to bring in such a motion.

Nowadays the guillotine is regularly used to push through important legislation which is never teased out or discussed. That is not a praiseworthy development. It leads to general malaise.

It is not easy for a party our size to continually raise these issues because of the strain one comes under if nobody else is prepared to take a stand on behalf of the general public in regard to the various misdemeanours and scandals that have come to light in our society. However, somebody has to do it. Time will show that the people abhor this kind of action. This measure being proposed here is another instance of the kind of deterioration in standards that is taking place. If we now seek to condone and applaud those who have cheated the system in the past at the expense of those who have paid, it will undermine the whole taxation system and have long term effects. It will damage the whole Government system in the future. It will undermine people's confidence in the system and encourage those who up to now have struggled to meet the State's requirements to throw in the towel.

What we have achieved here and the sacrifices made in the past by the founders of this State, as outlined by Deputy Quill, will go for naught if we allow crooks and gangsters to come to the top and to be the norm in this country. The Minister can seek to doctor it up, but let him be under no illusion; that is exactly what the Minister is encouraging. It is pathetic to hear Deputies from the Labour Party talking about the need for money to provide services for all the various areas of activity, such as the health services and the social welfare services. Of course, there is a need and there is a shortage of funds but if we sink to the level of funding those essential services for our people through this means, it will damage the whole fabric of society and will have reverberations that will go on for many years and have a terrible effect.

We are opposed to the proposal in principle. We are opposed to the philosophy behind it. We believe the vast majority of the decent people in this country are totally opposed to this and that it will cause untold havoc in the years ahead.

It was sad this morning to listen to the chairman of the Labour Parliamentary Party who felt obliged, for some reason or other, to come here and seek to justify the stand that his party, in Government, had taken, a stand foisted on him because of the decision made by the few of his colleagues who were around the Cabinet table with the Fianna Fáil Ministers. Deputy Kemmy felt it incumbent on him to say that everybody was dodging tax anyway and that it really did not matter. He said that, of all people, politicians, who live in the real world, knew that this was so and that tax evaders were endemic in our society. I quote from what he said this morning. He said:

Politicians have their ears close to the ground. They live in the real world, they meet people on the streets and they know the reality of life more than many others.

He went on to say that those who are opposing this measure were offering bogus arguments. He said many people evade tax and that tax evasion in our society was widespread "from top to bottom". This is the philosophy of the Labour Party as expounded by Deputy Kemmy this morning. He went on:

It affects politicians, journalists, trade union employees and there is an unfortunate case in the media today in respect of this issue. Many people evade taxes in respect of their incomes. That is the position. Politicians are aware of this and they try to maximise their expenses in respect of travel and that is also well known.

That is an astonishing allegation made by a Member of this House as a justification of the Minister's proposal to grant an amnesty to tax dodgers. The chairman of the Labour Parliamentary Party is coming in here justifying this measure on the grounds that politicians — and if he is referring to politicans I assume he is referring to Members of this House — are trying to maximise their expenses in respect of their travel.

This is an allegation which points the finger at every Member of this House. I am one such Member. I was disturbed to hear him make that accusation in that fashion this morning and that the Chair — a Deputy of the House was Acting Chairman — did not ask him to withdraw the remark. If the Ceann Comhairle will permit me now, I would ask Deputy Kemmy, on reflection, to come back to this House at some date in the near future and withdraw that scandalous allegation he made against every Member of this House. I speak for myself, as Deputy Kemmy said he was speaking for himself. I want that remark withdrawn if it is pointing the finger at me as a Member of this House. I ask Deputy Kemmy to withdraw his remark in regard to all the Members of this House.

Deputy Kemmy went on to say that he would stand over and take any criticism from many Member because his own record was clear, that he is able to speak out on issues and is not part of a golden circle. He went on to say that journalists "are not in a position to point the finger at anybody." He said that journalists "are not paragons of virtue" and that they have been known to doctor their expenses." Deputy Kemmy's remarks regarding journalists are in the same vein as his remarks regarding politicans. The chairman of the Labour Parliamentary Party has suggested that politicians and journalists are making false claims for expenses to which they are not entitled and because that is condoned we should condone those who dodge payment of their tax. He asked that we should support this marvellous proposal from the Government and grant an amnesty to those who have cheated by taking money out of this country instead of paying tax on it here.

This is an extraordinary allegation made by a Member of this House against other Members. I have always admired Deputy Kemmy for his courage and I do not know what abberration came over him today in relation to these matters. I have no doubt of his personal integrity, but he is pointing the finger at everybody else. He is doing so as a justification for this proposal. I find that grossly offensive. I ask Deputy Kemmy to come to this House and withdraw that allegation at an early opportunity. I ask the Leader of his party, I ask the Minister and Taoiseach to stand up in this House and disassociate themselves from the statement made by Deputy Kemmy today. He said he has heard much hypocrisy during the last two days. Deputy Kemmy, the man who made this allegation against everybody in this House, says that the arguments being made by those opposing this amendment are hypocritical. In other words, he suggests that because we are all fiddling our travelling expenses we are hypocrites to argue against the Minister granting an amnesty to people who have fiddled tax payments and liabilities in the past. That is an absolutely disgraceful allegation. I hope the Ceann Comhairle, who has a special duty in regard to the integrity of the membership of this House, will reflect on the words of Deputy Kemmy and consider whether it is appropriate that the matter be brought before the Committee on Procedure and Privileges to have it examined. Things have been said in the past with less serious implications in respect of the personal integrity of Members and they were brought before it.

An Ceann Comhairle

The Deputy has dealt adequately with the matter. If he feels it is a matter for the Committee on Procedure and Privileges he has Members on that committee.

Mr. Molloy

I am well aware of that. My Members will consider this matter. I am conscious that I am speaking in the presence of the chairman of that committee. I am aware of your special role in this House, a Cheann Comhairle, which we are free to mention as you are the guardian of the integrity of all the Members of this House and you have done an outstanding——

An Ceann Comhairle

I am aware of my obligations, Deputy. I need no lecture from anyone in this House concerning my obligations, duties and responsibilities.

Mr. Molloy

I am not lecturing. I am merely pointing out that the Members of this House need to be defended on matters of this kind and that it is a serious matter.

If this amnesty is to go through I believe there is another aspect of it which may not have been mentioned. There would be a danger that it will have a long term effect on revenue collection. The Revenue Commissioners preparing estimates and preparatory work for budgets would not be able to give the Minister for Finance and the Government of the day any kind of accurate estimate as to what the Revenue take might be in any one year because of the official encouragement this amnesty will give to everybody to dodge and refuse to pay their tax. The people who do not have that opportunity are those who have their tax deducted at source, the PAYE sector. That is where the anger is coming from. That is why the Minister should reflect before he proceeds any further to push this issue to a vote.

The clear indication of what the Minister is proposing is that there will be one law for the bulk of citizens and a much more selective a la carte legal code for the wealthy elite in our society. There is no point in telling a PAYE worker that he too can avail of evasion in the future and that he too can look forward to the next amnesty with great optimism. How will he avail of this new opportunity of tax evasion? He does not have that opportunity because his tax is deducted at source. That is what has led to the very understandable sense of outrage and dismay on the part of ordinary people throughout the country, people who against all the odds of economic recession get on with the task of making a living and rearing families. Costs are high enough. People have enough to struggle against to put food on the table without us seeming to introduce this new code of ethics which undermines the whole integrity of the way public life has operated in this country up to now.

What is extraordinary about this proposal is that one of the parties in Government, the Labour Party, fought the election on the slogan "Vote for us we will put justice into economics and trust into politics". If this is the kind of justice that the Labour Party sees as being necessary to put into economics, it is very warped thinking. There is no logic to it. It is not equitable. It is not fair and it certainly is not just. It is unjust. It is very unjust to proceed with a proposal of this kind. As for putting trust into politics, that must have become the greatest laugh of the decade in view of what we are now witnessing. I do not know what resources the State want to give to the Revenue Commissioners. We know they have continuously sought extra resources in order to deal with the tax evasion that they become aware of through the general operation of their duties. There have been stories of people hiring private planes with suitcases full of notes and flying to Jersey Island, the Caymen Islands, Switzerland, Cyprus and other havens where they can stow away their cash. They slip away in the dark of the night in privately hired planes and take off from some airport where the customs will not open every case. These matters have been reported and it is only those in authority who are in a position to establish whether these facts are true. We heard about these stories in the past but it seems that very little action was taken in regard to them because I am not aware of any prosecutions that ensured of people who absconded illegally with funds from here in this fashion. Despite the fact that no prosecutions were taken and that no reports of success in this area or even an attempt to catch up with these people has been recorded, we have assurances from Minister after Minister and from Government backbenchers that millions — and perhaps billions — of pounds would be recouped. If all that money is to be recouped I would pose the question, how did it leave here in the first instance? That whole area has to be examined.

How can the Minister say with such confidence that huge sums of money have been taken illegally out of this country? If he knew that officially what action did he take in regard to it? If Customs and Excise knew that officially, what action were they taking in this regard? If the Revenue Commissioners knew about this what action were they taking? What was the public prosecutor doing? What were the Garda authorities doing? What were the law enforcement authorities of this State doing in this regard? We are now being told that stories concerning the people who took off with this money are not just hearsay, that they are true. A few hundred or a few thousand pounds become hundreds of thousands and tens of thousands become millions of pounds. We are being assured now by Ministers that the amounts of money are vast. That means that something is rotten in the State of Denmark and in the State of Ireland. It is something that would cause one to seriously worry about where we are going and what we are doing.

There is an obligation on the State to give an assurance to taxpayers that the burden of tax will be shared equitably by all sections here and that Finance Bills, when they are introduced, will adhere to that principle and Governments will not seek to breach that principle in any proposal they bring forward. My colleague, Deputy Michael McDowell, dealt earlier with the whole constitutional aspect of what is proposed, the equity in the tax system and whether that is being maintained in regard to these proposals.

It is not too late for the Minister to change this proposal. As somebody who has held him in high respect and worked closely with him over the past three and a half years we were in office, and previously in this House, I ask the Minister to seriously consider whether he should proceed with this proposal. My opinion is that the Minister's heart is not in this measure. He does not believe in the philosophy behind it. This is "funny money" and it obviously was a factor that was unfortunately taken into account when the final figures were being prepared for the budget this year. There were pressures due to the upset in the international currency market. Much doubt existed at the time the Minister had to finalise the figures. This proposal may have seemed to be an easy source of extra revenue to get over the hump where additional money would be required.

The Minister has already made a commitment in regard to resources to the Exchequer coming from the sale of State assets. That was an interesting proposal, a round figure of approximately £150 million has been put on it by the Government. That is interesting from my point of view and the point of view of my party when one considers the stand that the Minister's partners in Government took in regard to the sale of State assets during the election campaign and how quickly they have cast aside their philosophy and their ideology in that regard. It adds to the general confusion among the public in regard to what is happening in politics today. Who can they believe or trust? Do politicans ever mean what they say or do they make statements to suit the moment and do not really care whether those statements are true? That attitude adds to the malaise that is affecting this country and which is bringing people in public life more and more into dispute and will bring the whole country into disrepute.

As somebody who has spent the last week or ten days in a country which has suffered grieviously from this type of philosophy as seen in the extreme under a dictatorship and the genocidal activities of the Khmer Rouge under Pol Pot, I have seen the extreme of extremism. I am concerned that we will not continue to maintain our high levels of integrity and apply the highest standards to the decision making process in Government and to public life in this country. I would abhor any attempt to reduce those standards. That is where I see this measure leading. It does not take much time to be on the slippery slope before one finds that one is hurtling down a very dangerous route which will affect much of what people have worked to build up in this country.

My party spokesperson has put our case in great detail. My party in general has outlined our sincerely held fears regarding this matter and from my own knowledge of Government, I know that there cannot be wholehearted support for this proposal at a high level in the Civil Service because of the serious objections that were raised to these kind of suggestions in the past concerning their detrimental effect and in view of the Minister's previous stand in regard to suggestions of this kind and the stand of the former leader of the Fianna Fáil Party. But the philosophy and the ideology has changed under Albert Reynolds' leadership and the backbench sheep in the Fianna Fáil Party are prepared to march in and support whatever is put in front of them by their Front Bench who decide these issues behind closed doors.

Mr. Davern

If Deputy Molloy thinks I am a sheep——

Mr. Molloy

We all know Deputy Davern has been seeking to promote this type of measure for some time and it is not something for which he should be seeking to claim credit.

Mr. Davern

I do not need lectures from you, Deputy Molloy. Your previous life was different.

Mr. Molloy

I am not lecturing the Deputy. I am seeking to put a mirror in front of him to show what is really happening within his organisation.

Mr. Davern

Born again.

Mr. Molloy

If this is the road that the Deputy seeks to bring Ireland down it is a sad day and I hope the time remaining will be time for the Government to change its mind.

Mr. N. Ahern

Deputy Molloy earlier said the backbenchers would be brought in to talk on this issue. Let me assure him that I have not been brought in. The other side of the House seems intent on dragging out the debate so I am just helping them.

Yesterday a debate on amendment I started at about 4.45 p.m. and I waited for about 20 minutes to hear the Minister's response. However, after half an hour I realised the debate would go on at length. The Ceann Comhairle was a little harsh on the first two speakers — Deputies Cox and Rabbitte — telling them to keep to the point, but he seems to have become tired because a few speakers whom I heard on the monitor today wandered all over the place, as perhaps I am doing.

Deputy Quill earlier used the word "scandal". As a newcomer, I believe the scandal is that the last two days have been wasted. I was very impressed last week with the work of the Select Committee on Finance and General Affairs when dealing with the Committee Stage of the Finance Bill, particularly that of the main spokesman. Like other Members, I nipped in and out, attending the odd session. Yesterday and today was to be a continuation of that debate, dealing with amendments that were not dealt with last week. I am rather amazed at the way time is being spent here because there are 178 amendments listed and we are still on No. 1. Perhaps I am learning. I am not necessarily the judge of these matters.

I do not know who will gain from this amnesty and I cannot relate to these people in any way. I certainly cannot relate to the stories one hears and the examples given from the other side. I have always been on PAYE so I never had the chance to fiddle the system. I would like to think that if the opportunity arose I would resist it, but we are all potential fallers. However, the opportunity never arose for me so I cannot hold myself up as a shining light.

Earlier today Deputies Harney and McDowell said they had spoken to people last weekend who would gain from the amnesty or perhaps they were referring to advisers of these people. The Progressive Democrats represent people who might gain from this amnesty more so than do I or the party I represent. That party should go easy on these people because they might be stepping on the toes of their own supporters. We are all prisoners of our past. Much of what I heard since yesterday evening I disregard. Deputy Molloy spoke about pensioners, and one person's opinion is as good as that of another, but certainly before I became a Member of this House I would not have regarded the Progressive Democrats as the party that represents the needs of pensioners.

Mr. Cox

The Deputy knew little about us then.

Mr. Davern

There was little to know.

Mr. N. Ahern

I admit I have a lot to learn and I could be wrong, but we all have our perceptions and images, and I am not wrong all the time. I am interested in finding out who all these people are who will benefit from the amnesty — we will find out in the weeks and months to come. I have a simple philosophy, that we have no dealings with tax evaders, but people who have money stacked away abroad should be encouraged to bring it back. If a reasonable deal is made with them perhaps we can all benefit in future. Once the money is declared and these people are sucked into the system they will not be able to quickly opt out again.

I have been amazed at the tactics adopted here. If the debate had been wound up 22 hours ago and we heard the Minister's reply, other amendments could have been dealt with. Having been so impressed with last week's Committee, I am somewhat depressed at what has gone on since yesterday evening. It seems a scandalous waste of time, with many speakers trying to drag out the debate. Last week the Committee was really to the point and was impressive.

Like everyone else I am waiting to hear what the Minister has to say and what will be said over the next couple of weeks when the detail of this proposal is published. There is anger outside, but the extent of that anger has been hyped up. I do not think it will last as long as some people believe. For the last week the argument has been all one way, with nobody putting forward the good points whatever they may be. I hope that after the amnesty the Revenue Commissioners will be given extra resources to carry out their work. It has been said that if Revenue had been given extra resources over the years they would have caught many of these people anyway. In last year's Finance Bill the Revenue Commissioners were given extra powers but the Minister was criticised by vested groups outside and political parties inside the House who felt it was a disgrace that powers were being given to hassle people. Deputies are today contradicting many of the things they said 12 months ago. I hope that extra resources and powers will be given to the Revenue Commissioners so that they will follow the people who, as acknowledged earlier by the Progressive Democrats, may not choose to take it up.

Mr. J. Mitchell

I agree with the point made by Deputy Ahern in relation to the very long contributions being made on this amendment, in view of the fact that there are so many other amendments to be dealt with. I do not intend to make a prolonged contribution on this subject except to say that I am very concerned about it. I do not think the Government has teased out all the implications of the amnesty or understands what tangible benefit is to be achieved by it. I would like the Minister to tell us exactly what is the objective of the Government in proposing this amnesty. Why is it proposing that people who have cheated the system are to be rewarded by a rate of tax which is as little as one-third of the rate paid by taxpayers who have always paid their taxes? What is the rationale for that? Will there be some quantifiable, longlasting benefit to the economy from such generosity on the part of the Government towards people who, by definition, are tax evaders?

I suspect that there are two explanations for this proposal, neither of which relates to sound economics. The first explanation is a propensity within the Fianna Fáil Party, particularly since the sixties, to associate with the tax evader One of the major problems of the Fianna Fáil Party in the past 30 years is that it has identified with the person who wants to rig the planning permission, who wants to evade taxes, the law breaker and the wrongdoer. Fianna Fáil and such people are soulmates. That is what the electorate has identified in Fianna Fáil and it is why Fianna Fáil has successively failed to achieve an overall majority in the past six years. Here is another expresson of that affinity in this proposal to reward tax evaders, the soulmates of the Fianna Fáil Party.

An explanation, and the only possible explanation for the Labour Party agreeing to support this proposal, is a tendency in that party to believe that there are easy ways of getting our economy right, getting rid of our budget deficit and reducing our debt burden. There are no easy options. This proposal is yet another form of escapism, an effort to try to escape the realities of the arithmetic. The Government parties, not being able to realistically face up to issues, have sought some imaginary or fanciful basket of money. This is what we have here.

The Labour Party in Government — I can testify to this because I served in Government with it over a six year period — always fails to face up to the issue. They are afraid to take a stand on the hard issue. They are a "softly, softly" party. That policy has had disastrous long term consequences for our economy, our budget deficit, our national debt and, indeed, for employment. The Labour Party consists of weaklings when it comes to economic issues. Here is more evidence of Labour seeking out illusory soft options. There is not any other possible explanation for Labour supporting a proposal to compensate people who have broken the law by evading tax by the imposition of a very low rate of tax compared to the amount paid by compulsion each week by the PAYE sector. There is no other possible explanation for the Labour Party's position, and this is the sort of gombeenism with which Fianna Fáil naturally and instinctively identifies.

Because the pros and cons of this matter have not been seriously gone into by the Government, and it does not have the significant support of either the Revenue Commissioners or the Department of Finance, the Minister should delete this proposal from the Bill, even if it means having to introduce a second Finance Bill later in the year after the matter has been teased out in greater detail.

Mr. Davern

What strikes me is the political opportunism involved in using this amendment, when all the other provisions in the Bill should be discussed on Report Stage. This proposal will be discussed at a later stage after the Bill is enacted.

Every person agrees that Irish people have money invested outside the country. Not one Member who contributed to the debate denied that this money is invested abroad. What Members are objecting to is the money coming back into the country. In 1974 when the introduction of a wealth tax was mooted a great deal of money was deposited outside the country. The amount of money invested outside the country is, to some extent, a matter of speculation, but if that is the case we must consider how to encourage people to invest it here so that it can be used for the benefit of our people, particularly the unemployed. There are 300,000 people unemployed and if that money comes back into the country, it has to do some good for our economy.

I criticise some Members, and The Irish Times, who said there is no cash flow problem in our economy. I have heard Opposition Deputies, including Deputy O'Malley last night, say there is no cash flow problem. We have the lowest consumer spending in the European Community because nothing is moving. Property is not being bought because people have not got the money. This proposal relates to money invested outside the country pre-1974 by people who worked on five, six and seven month contracts in foreign, unattractive countries and did not bring the money back with them because of our tax system. We must consider also the position of people who inherited money from abroad. Those are the three main cases I have come across over recent years. People who inherited money would pay an enormous amount of tax under this system.

It is the hypocrisy among some of the political parties today that is sickening me. Last night Deputy O'Malley referred to both Deputy Kemmy and me in racing parlance, that between us we had fathered a jennet. His knowledge of racing is not good, and certainly his knowledge of horse breeding is not expert. It is hypocritical of him to condemn people in that most self-righteous manner that has become the altar mat of the Progressive Democrats, when he yesterday was castigated by the chairman of Arramara Teoranta, for asking that person to deal with a company that had been struck off the register. There was silence at that committee meeting yesterday when the chairman felt he had to reply in that fashion. This level of hypocrisy in this House gives me a pain. I have been a Member for almost 25 years and I listened to some of the contributions with aggravated pain. The Members I am complaining about are so self-righteous in their own position. They wanted more cuts in social welfare than any previous Government. This is hypocrisy.

I do not hear any demands by the Opposition for an inquiry into why a judge was not prosecuted after a member of the Garda Síochána had to be called when he tried to enter a bar illegally after hours. If a Member of this House was involved I suspect he would have been prosecuted, and the case given wide publicity.

Huge penalties will be imposed on people who ignore the once-off amnesty. I would advocate that they get jail sentences. One of the things we could do with the tax is use it as capital for buildings for the less well off people in our society and particularly for the mentally handicapped. I am involved in that area. I would love to see the money used in those areas as a once-off so that the PAYE taxpayer — I have been one since I was 17 years of age — would not have to pay for it in future years. If this money comes in it should be invested in the economy, because at present we are leaving it outside the economy so that other people and other economies can gain from it.

Some of the speakers on the Opposition benches are far removed from reality to think that the banks have been cute over the years and that they have foreign accounts registered under foreign addresses for Irish people living here now. Every politician knows that is happening. The high minded morality issues they are raising here are not an issue, because what we need in this country is capital investment. There are people who presume that this does not happen. Of course we need urgently to tighten up our tax system and improve it. Thousands of pounds are being spent through the IDA to create jobs. If we get this money in it should be used not only for the benefit of the economy but in particular for investment.

I have been persuaded, pushed and bullied by people on certain social issues. They say that this is the reality nowadays, the accepted thing, you have to vote for it whether you like it or not. But here reality leaves some of these people. I hope Deputy Cox is not getting hot under the collar on any issue.

Mr. Cox

Nor are any of my nerves too raw.

Mr. Davern

He has certainly changed colour. I hope it is not affecting him too badly.

I would like to commend Deputy Yates. Even though his party were totally opportunistic in going in a different direction, he had the foresight to see that this was right. He has the knowledge because he is on the ground and listening.

Mr. Yates

I saw the light in time though.

Mr. Davern

Deputy Yates did not. He did not see it in time to switch off the other light when it began to beam on the far side of the House.

Mr. Yates

I am not on the hook Deputy Davern is on.

Mr. Davern

I am not on any hook. I have never shrunk from anything I ever proposed or did in my life. I have nothing whatever in my political life to be ashamed of. In case anyone assumes I have savings accounts, I never had a savings account in my life, even after 25 years in politics. When Deputy Yates has been around that long he might appreciate it. Perhaps Deputy Cox might have such savings in Brussels or elsewhere. I would not be sure of that.

Mr. Cox

Deputy Davern should adhere to his muck-raking. He is good at it; it is his forte.

Mr. Davern

I thank Deputy Cox for that compliment. He is not bad at it himself. He is a bit like Murphy's dog — good to give it but cannot take it. Would Deputy Cox answer me on the Arramara Teo position?

Mr. Cox

I do not know what it is. I was not at the meeting.

Mr. Davern

It has been recorded in the records of the semi-State body only yesterday.

Mr. Cox

I will be happy to answer it.

An Leas-Cheann Comhairle

Please allow the Deputy to continue without interruption.

Mr. Davern

This is not a case of trying to reward those who have failed to pay their taxes or skimmed money off, but concerns particularly those who have earned or inherited money outside this country. That money is benefiting other economies, not our economy. There is a need for a cash flow and for investment in this country. Let us get that money in. In that way we can help the ordinary taxpayer by not having to look to them for capital moneys next year. This amnesty will mean that nobody ever again can have an account outside this country without the fear of stringent jail terms being imposed on them if they do not avail of this once-off opportunity to benefit not only those whom they have offended in the past but those from whom they will secure less taxation in the future.

Ms O'Donnell

I was interested in the last speaker's contribution. If he is saying that it is self-righteous and high-minded to want to protect the integrity of our taxation system, then I am happy to be high-minded and self-righteous.

One of the things that has become evident over the last 24 hours debate on this issue is that there is a certain truth in Irish life, and it is this. If you are a PAYE taxpayer, you will never be a wealthy person. With an ever-increasing population dependent on the taxpayer, it is all the more important for this State to put in place an equitable tax system. Part of the pedigree, of the political DNA, of my party, the Progressive Democrats, is that we have from the beginning sought to introduce tax reform to improve and make more equitable the tax system. We had some achievement in Government. Unfortunately, that has been rolled back since the formation of this Government, particularly with the imposition of the new 1 per cent income levy and the probate tax. Those taxes are not welcomed by a sector of the population who must pay for everything through the nose and who are gradually becoming discontented. That will be the pattern of politics over the next ten years. PAYE taxpayers will be so sick and tired of paying for everything and getting nothing in return that the nature of Irish politics will change.

We have heard already from Deputy Ahern that he found it extraordinary that the Progressive Democrats should be speaking out for the old age pensioner. I do not find anything extraordinary about that. My parents are old age pensioners. The parents of many of our Deputies are old age pensioners. I cannot see why we should have this reputation for being the hard-edged, hard-nosed party of fiscal rectitude with no human face at all. We hope to change that.

In supporting this amendment the Opposition parties have been given the opportunity in this House to debate this issue. The reason this parliamentary device has been quite legitimately used is because there was no other opportunity. This proposed tax amnesty was not contained in a manifesto; it was not in the budget; it was not in the Finance Bill. It was going to be wheeled through. That was unacceptable and it was legitimate to raise the issue in this way by positively putting it in as an amendment. I congratulate Deputy Cox on that.

One of the issues that has arisen in the course of this debate concerns the overall cynicism about politics. It is at a worryingly high level and has to be stemmed, because it goes to the root of democracy and of belief in the system of democracy. It has been said by other speakers that democracy is a very fragile thing. Deputy Molloy was one who mentioned it. If we undermine that sense of fair play, particularly in our taxation system, we are undermining the core of democracy which gives people a reason for going out to work in the mornings. The people who through their taxation bear the brunt of meeting the cost of public services must be encouraged to continue to pay their taxes. They have no choice. Most of us pay our taxes through direct debit. Undoubtedly taxpayers will feel an element of fatigue if they see that those who have dodged the tax system will now be given an amnesty and will have to pay only 15 per cent flat rate on the amount of money by which they have defrauded the State.

In the past I expressed concern in this House that sooner or later low to middle income families would find that they were a disadvantaged group in society. This point was highlighted recently in a debate I had with the Minister for Education when a policy decision to build a post-primary school in Knocklyon in my constituency was reversed. The reason given for this reversal was that capital for projects was to be diverted towards schools in disadvantaged areas. While that is worthy a balance has to be struck. The fact is that Knocklyon, which has the largest primary school in the country, has no post-primary school. Because that community is deemed to be comprised of middle income families by the present Minister for Education, it is not going to get a school. In other words, schools are going to be means-tested.

The Labour Party has to strike a balance. I have said before that during the general election campaign the Labour Party tried to broaden their appeal and successfully wooed middle-income families. They managed to do this by adopting a soft focus election manifesto. Indeed, if I recall correctly, it was not even called a manifesto because they felt this word conjured up images of socialism. They spoke about the need to bring justice back into politics and economics and about ethics. These words have been debased by the Labour Party before and since the election.

As has been mentioned, people are incensed by this particular issue. I have received letters written on Basildon Bond notepaper from unsophisticated people who work in kitchens and dining rooms and so on, and who possibly have never been in touch with their TDs before. They are writing to say:

I must object strongly to this tax amnesty. I have never written to my TD before. I paid my tax all my life and here these people are going to get away scot free. In the early seventies I purchased a small plot of land in County Sligo for £350. The Revenue Commissioners asked me to explain where I got the £350 and I was obliged, quite rightly, to show them my savings account. The same law should apply to all of us.

These are fair-minded people; they are not begrudgers. They pay their taxes; get up in the morning and go to work; pay their rent; subsidise their children's education in the hope that they will do well. All they want is equity and a sense of fair play in this democracy. They are not arguing for anything more than that. If that is high-mindedness and selfrighteousness, I am delighted to be self-righteous on this issue.

Pensioners caught in the tax net are paying high taxes on their pensions and will be paying the 1 per cent levy while single mothers get no tax relief for rent or for child minding services with the result that they would be better off if they stayed home and drew the single parent's allowance. This eats into their confidence in complying with the tax system. The central issue is that people who comply with the tax code and do everything they are obliged to do under the law should not be penalised under our tax system. They have a right to be angry when they see people who have dodged the tax system being facilitated. We are now going to discriminate in favour of those who have broken the law. This is not right and it is unacceptable.

I am not an economist but I am not sure that this amnesty, even if it was morally acceptable, will work. The thinking behind it is morally bankrupt and points to a poverty of thought in Irish politics. This low level thought process which goes into running our economy has kept many people who would normally have an interest in politics out of politics. The amnesty has not been thought through, was hastily conceived and badly presented to this House. I welcome the opportunity to express my opposition to it based on the representations I have received from ordinary members of the public who live in the Dubin South constituency. They are outraged at this proposed amnesty.

I am not playing party politics. I was accused earlier of wasting time but I am here to express the views of the little man and woman. Deputy McManus mentioned earlier that it is only little people who pay tax. That is true; but they are not small in number. However, the number is getting smaller all the time by virtue of the fact that they are being driven into the ground by a penal tax system. They believe that what they have to say does not count. I am perfectly happy, therefore, to be self-righteous and high-minded on this issue.

As we speak, the book about Deputy Spring and the Labour Party is being launched in a house near here. It is entitled Spring and the Labour Party by Stephen Collins. However, there is a paragraph missing which relates to the concept of the Labour Party supporting and endorsing a tax amnesty for tax cheats. Perhaps Tim Ryan in his forth coming book will deal with that sad scen ario in The Tale of the Labour Party.

Mr. B. O'Keeffe

I should say at the outset that I thought Deputy O'Donnell's contribution was well structured and no so high-minded. Like an after dinner speech, I would like to say "thank you" to a number of Deputies. This side of the House is grateful to Deputy Yates for his contribution. It was much appreciated. However, it was unfair not to inform John, but, unfortunately, nobody loves Johnny any more and, certainly, nobody tells him anything any more.

Mr. Cox

Is the Deputy referring to Deputy Bruton?

Mr. B. O'Keeffe

I also thank Deputy Quill who, unfortunately, is not present and who, in her apoplectic state, indicated that I should contribute to this debate for getting me out of my seat. I actually thought she had seen a vision. If she is chasing that vision over the River Lee I certainly want to be part of it.

One could adopt one of two approaches to this debate. One could take the pragmatic view or adopt the high moral tone adopted by many speakers on the Progressive Democrats benches and duplicated on the Fine Gael benches or be opportunistic like the speakers on the Democratic Left benches. I am sensible enough to realise that there are people who have qualms about this amnesty. It is fair to say that people in the PAYE sector, who have been paying taxes all their lives not by choice but because they have been forced to do so, will ask if it is fair that people who have laundered money should be charged 15 per cent.

I would take the pragmatic view because this money is available. We are talking here about sums in the region of £2 to £3 billion. The question that each and every Member of this House must ask himself is what should we do? Should we allow people to stash this money away in another country which will reap the benefits? It is fair to say that realism suggests that it is incumbent on any Government to look at ways in which money can be attracted back into the country and having done so, and having given people the opportunity to repatriate it on a once off basis say, "Halt. The door is now closed, this is the end of it and should it happen again the penalties will be extremely severe". The Government has put together a programme of action for the economy and it is incumbent on it to look at every avenue whereby it can obtain resources which are necessary to implement the programme.

I listened with great interest to the debate today, particularly to Deputy Gilmore, whom I thought made an excellent case for the amnesty. He recited a litany of all the things we should be doing in this economy, had we the resources. Who is to say what can be done with the money from a successful amnesty? There are 300,000 people unemployed and it behoves the Government to come up with bold and adventurous measures. The Government is quite right to take this opportunity if it sees it as being in the best interests of the 300,000 people who are unemployed.

If even £1 billion out of the £3 billion that is talked about is repatriated we are then talking about £150 million becoming available to the Exchequer. During the Debate on the Finance Bill Members said that the 1 per cent levy was anti-jobs. The levy will net something like £120 million. The amnesty offers the possibility that that levy could be wiped out at one fell swoop. This anti-jobs measure that the Opposition have been telling us about could be eradicated.

Mr. Yates

You will get the benefit of an amnesty for only one year.

Mr. B. O'Keeffe

The Government is quite right in bringing in this legislation. At the time of the last amnesty quite a number of people raised their voices against it but when it was successful the number of people who wanted to be associated with such a good idea was extraordinary. The amnesty gives rise to fundamental quesions. How did money leave the jurisdiction? Who was involved? Why were the regulations that are in place inadequate? Why could this not be nipped in the bud? Therefore, a total overview must be taken of the regulations that are in place.

At the end of the day the Minister has one chance to make sure that the people who will be given the opportunity to repatriate this money have only one opportunity to do so and should they decide to leave it outside the jurisdiction that they will be caught, and will suffer severe penalties. I would agree with Deputy Davern on this — jail is certainly a worthy sentence in that case.

I understand the misgivings about the amnesty but if this amnesty brings in the amount of money we are hoping it will bring in, it affords us the opportunity to generate additional activity in this economy, for which the unemployed will certainly thank the Government and the Minister.

Mr. J. Higgins

I will be very brief because I know everybody is anxious to hear the wisdom that emanated from the Cabinet meeting today and to know how real the bellicose noises on the various news bulletins in relation to prison sentences are. One thing I notice in relation to deterrents stitched into law, is that the penalty is a fine or a prison sentence. It will be very interesting to learn when the Minister shortly spells out the actual revised terms of the new amnesty, whether this will be an either or situation, that the Government is really serious, either collectively or individually as political parties, in finally deterring the outflow of finance and ill-gotten goods and gains from this country.

The principle of an amnesty is bad. The principle of too many amnesties is damaging. It undermines the credibility of the tax system. Frequent amnesties allow people to budget in the expectation that there will be another amnesty and that if they hold out long enough again, because of financial pressures, and the need to satisfy the spending Department, there will be another amnesty in order to claw back some badly needed revenue into the economy as an interim measure. It is quite obvious that at the eleventh hour the Government has now seen the light in terms of the degree of public odium to one law for the golden circle and another law for ordinary John citizen who is trying his best to pay his taxes, educate his children, have enough money to pay the doctor and meet the day-to-day running costs of the family. Therefore the whole principle is bad and I have pleasure in supporting the Progressive Democrats amendment.

From where did the pressure for this amnesty come? It did not figure in the Programme for Government. There is a section in the Programme for Government on taxation measures, the need for taxation of money abroad and so on. Yet there was absolutely no intimation of it five months ago when the Minister was one of the key plenipotentiaries in negotiating the Programme for Government. This proposal did not figure either in the broader landscape or in the much more narrowly focused landscape. It is quite obvious that something happened in the meantime and that the pressure came from some quarter.

One of the features of our culture is that an incestuous business community has developed. I am not tarring the entire business community. An elite business culture has grown up which is dominated by a select number of people, known as the "golden circle". These people, in many cases, are before the courts and tribunals now. It is ironic that the heads of building societies, the heads of stockbroking firms, the heads of some of the top 20 companies, are the subject of various tribunals and inquiries in relation to their business practices. In some cases these are the people who have been asked to relinquish their positions as nominated executives on semi-State bodies. It is ironic that a system operating at top level in business is that one can buy something for £6 million and sell it, within a matter of days for £9 million, without a single penny ever changing hands. There is something fundamentally wrong when that can happen. That is happening on an ongoing basis. There is also something fundamentally wrong when some of the top business people can be described as being nothing other than dressed up three card trick men. The people who involve themselves in these kinds of shady deals can buy their way out by employing expertise.

We have grown up in this country with a new coinage and phraseology that is very much epitomised by the phrase "working the system", in other words, it is legitimate. You find the loophole, you hire a lawyer, an accountant, an adviser, a manager and then you go for it. That is called "working the system". Then on the other hand there are ordinary hard grafting business people. For example somebody came to me about seven or eight weeks ago and said:

I'm pulling down the blinds. I'm turning off the lights and I'm calling it a day because I cannot survive. The reason I cannot survive is because my rates have trebled from £7 to £21 because I bought a little freezer, I put in fluorescent lights and I moved the shelving around. My rates have gone from £269 to over £800.

The other reason was that she was penalised and policed out of business. She said there are 14 State inspectors who can call to police her little shop. These are the rate collector, the revenue collector, the fire officer, the VAT inspector, the income tax inspector, the environmental health officer, the safety and welfare officer, the wages inspector, the fish inspector, a potato inspector, a vegetable inspector and an egg inspector, all of whom would earn, I suppose, between £20,000 and £25,000. That woman is now out of business. The State is no longer getting the revenue and she is being paid a widow's pension of £65 per week. Those are the kinds of crazy, punitive measures we have against somebody who is trying to eke out a living and keep the social fabric of life together in towns and villages.

I came across another case recently of somebody who happened to be away for a two-month period and missed paying his VAT. He has been penalised for £280 VAT. He was visited almost immediately by the revenue sheriff who told him that if he did not pay up immediately he would clear the shelf. I do not blame that individual for his reflex reaction when he defied the revenue sheriff's agent and said, "If you put a foot across that threshold I will take the head off your shoulders". On the one hand he sees shady dealing at top level and then the covert defence of those people by handing them the kind of lifeline that this amnesty represents. This is the kind of enterprise culture that the former Minister for Education, Deputy Séamus Brennan, has integrated as a fundamental part of the Green Paper on Education and which we are supposed to inculcate into school children, both at secondary and primary level.

Deputy Quill used a very colourful phrase — `the fish rotting from the head down' — when she described the stand of the Labour Party. I read a letter recently in the Irish Independent from a disenchanted Labour supporter, one of the Dublin 4 people, who thought he had at last discovered the great crusading saviour of Irish society in the person of the Tánaiste and Minister for Foreign Affairs, Deputy Spring. It is said that wilted lilies smell more foul than weeds — that is very much the case in relation to the Labour Party. Their performance has been abysmal. Deputy Kemmy and the other hod carrier on the Labour side, Deputy Ferris, who defending the posture of the Labour Party on various matters that go to the very core of what the Labour Party is about, test the very nerve of even the most resilient traditional Labour supporter, let alone the Johnny-come-latelies and the hitch hikers who jumped on the Labour bandwagon on the last occasion.

I am delighted to support this amendment. I appeal to the Minister to support this measure which goes to the heart of what Irish society is about.

One of the ironies of the Irish economy is the great mystery as to why, having got the nuts and bolts together, we are still not performing. We were told that we would find the promised land if we got our interest rates down. It was the Labour/Fine Gael Coalition of 1983-87 that began the slow grind of getting interest rates down and reducing our inflation rate from 21 per cent to 3 per cent. We have had a surplus in our balance of trade every year since 1984. Yet the economy is not performing. The reason is that the leaders in this country are controlled and manipulated by a group of wealthy people — the power brokers who are being allowed to abuse their position. Every type of loophole open to them has been exploited and the amnesty is being advocated because of closed eyes on the part of officialdom, to white collar crime over a period. If we are not careful, with 300,000 people out of work, at some stage the national nerve will snap and these people will take to the streets. They now have leadership, other than trade union leadership which they feel has reneged on them and betrayed them. I am convinced that that first march will put in the ha'penny place the initial civil rights march in the North. If one adds to that the PAYE sector who are carrying the can by paying 88 per cent of the tax burden, then we have the chemistry for social upheaval.

Mr. Lawlor

The positive aspects of the Finance Bill have obviously been shunted into a siding in a debate which has been dominated by the tax amnesty. Probably, consecutive Ministers for Finance during the past 20 years have foreseen the possibility that such an amnesty can take back, if the facilities are put in place, funds that went abroad for a whole variety of reasons. We should stop the political posturing and the hypocrisy of the past number of days. All I can think of in this respect is the number of urgent capital projects I want to see in my constituency. The only way they can be undertaken is by approval from various Government Departments.

If extra revenue is to be made available to the Exchequer as a result of the amnesty, we have to look objectively at the incompetent system that has allowed taxes to be avoided over a lengthy period. The justification — if there is such a thing — is the major transfer of resources into Exchequer funds from the previous amnesty. In that case a projected £30 million grew to close on £500 million. A substantial part of that amount was collectable in any case. Those who have avoided paying tax through legal or illegal tax schemes over a lengthy period now have funds off shore. When they come back they will have to pay a minimum of 15 per cent. DIRT tax will be payable on deposits and the funds will be available within the system. The wrongdoing in the avoidance of tax in the first place cannot be redressed other than by this mechanism. Many people have put funds in off shore accounts to try to regularise them. If the tax regime of previous years which allowed transfer of resources and tax avoidance is to be closed forever, there is justifiable merit in considering the proposal.

When Deputy Ivan Yates was asked to write his article in the Irish Press it was very clear that he thought there was some merit in considering this matter. If we get 50 per cent more than his projected 10 per cent I do not see how his attitude is other than political hypocrisy.

Deputy Michael McDowell called for all types of tax changes in an effort to gain a few political points when the Progressive Democrats shared Government with my party. Whatever was in the budget was thanks to the great foresight of Deputy Michael McDowell as chairman of the Progressive Democrats who was not a Member of the House at the time. The reality falls short of the hype. The competence of accountants and the legal framework allowed people to avoid paying tax, particularly capital gains tax, and to transfer funds offshore.

If that money were kept here and the total percentages due to the State paid, there would have been a higher take for the Exchequer, but the system has allowed this situation to develop. We could go the mediocre road and do nothing. We could decide not to go forward with the tax amnesty, but surely the Exchequer will benefit from this. The figures suggested are an estimate. I do not know how people arrive at conclusions as to the amount; we were so wide of the mark on the last occasion.

It may be a good, clever political formula to highlight the plight of those in the PAYE sector who are crippled by tax. Every Member is in the PAYE sector and that is often forgotten in discussions and interviews. The political system, it is now being said, appears to be providing some sort of safe haven for people who are not in the PAYE sector. All Members agree that everybody should pay the same. When ordinary tax payers had to make half-yearly returns a great deal of form filling was involved and information sought about dependants and so forth. The licensing trade was up in arms twelve months ago about the tightening up of the collection of taxes. Good, progressive and fair tax systems were gradually brought in to cover various other sectors such as the electrical goods sector and areas of the black economy associated with the building industry. If in efforts to bring about equity in the tax code, we can get some additional funds into the Exchequer, then this amnesty will stand the test.

Mr. Sargent

From the point of view of the Green Party, Comhaontas Glas, the tax amnesty is not a good idea. It indicates a bankruptcy of ideas from the Government side on economic questions. It indicates desperation more than policy and the people with money deposited abroad will probably be ridiculed for bringing it home and trying to come clean after years of cheating. I do not think it will be very attractive to them to bring the money home when they are earning good interest on it overseas.

I do not believe it will create jobs either. There is certainly a great deal of money in savings and financial institutions are trying to give money away by way of loans. I cannot see what difference there will be in terms of job creation if this money is brought back. It is more evocative of special flights coming into Dublin Airport at Christmas time with bags of money instead of emigrants or Walter Raleigh, like a pirate from overseas, coming back with the hoards from colonial countries, than of any kind of economic sense.

Why call this a final amnesty? Does that mean that the Government will resign if the scheme does not work out? The word "final" is quite meaningful there.

We need to do something, as Deputy Lawlor said and, rather than putting all our eggs into this particular bankrupt basket, we should be encouraging much more work-sharing. Many Members hold down two jobs or more and we should be setting an example in regard to creating more employment. The bus strike seems to indicate that public transport does not have the support of the Government but if it did, there is much employment potential in that area. Agriculture is becoming less labour intensive daily and we are losing jobs there. It is no solution to look outside the country for employment creation when many of the solutions can be found here.

Minister for Finance (Mr. B. Ahern)

I will endeavour, in the time available to me, to cover a fraction of the issues that have been raised over the past 26 hours.

First, I would like to make a point I made yesterday to your office, a Leas-Cheann Comhairle. Since the establishment of this House it has been the tradition for the Minister to speak only once on the Finance Bill. The order of the day is that the Opposition Finance spokespeople, who are usually the only people present, speak and then the Minister replies, as the proposer of the motion. That is the system that has operated since the twenties. Deputy O'Malley was correct on this point in relation to other Bills, but in relation to the Finance Bill the Minister has only one opportunity to speak. It would be meaningless if it were dealt with in any other way.

This amendment has been debated for 26 hours and it would be a waste of time that I do not have to argue about the fact that the debate went ahead. However, in so far as this amendment prohibits the Revenue Commissioners from remitting income tax, it is not relevant. At present the Revenue Commissioners have no such powers and they do not remit established income tax liabilities. Therefore what we have been talking about here for the last 26 hours is irrelevant to the present position. I patiently listened to all that was said. Under the present arrangements where compromise settlements are involved and where the tax liability is established, the powers to remit relate only to penalties on interest. The proposed amendment is not relevant in the context of the present Bill and it would have no effect whatsoever in relation to the current laws and practice. What the Deputy concerned obviously wanted — and succeeded in getting — was a debate on something that is proposed and in the context of our present position that was out of order. I would make the point — because it is important — that there is no provision in the Bill for an amnesty. Deputy Cox's amendment is totally new; it was not discussed on Second Stage——

Mr. Cox

The Minister's amnesty decision was totally new.

Mr. B. Ahern

——or Committee Stage. I have limited time, and I have listened to a great deal for the past 26 hours.

Deputy Yates tabled an amendment on Committee Stage which he did not move. He indicated that he did not intend to do so and that amendment was not discussed, nor was it referred to or permission asked to refer to it. Deputy Cox's amendment could not be said to relate to Deputy Yates' amendment because it is the direct opposite. Deputy Cox did not give any indication on Committee Stage of his intention to submit an amendment on an amnesty. I checked this the night before last with people who have been involved in dealing with Bills for many decades, and was told that if Deputies are allowed to introduce new amendments on Report Stage it will merely turn Report Stage into a Second Stage debate. The Chair successfully did that for the past 26 hours. We are not aware of any previous examples where Opposition amendments were accepted unannounced on Report Stage.

Mr. M. McDowell

The Minister is getting a raw deal from the Chair, is he not?

Mr. B. Ahern

Such a major departure from long standing practice would make the processing of legislation almost impossible in future. I would like to know — I have tried to find this out and failed — under what ruling this happened. The debate is over now so it does not matter but what we have had here for the past 26 hours was out of order unless it can be proved otherwise.

Mr. M. McDowell

It took the Minister a long time to come to that conclusion.

Mr. B. Ahern

I raised it yesterday and the night before last.

Mr. Cox

The amendment was submitted on Friday.

Mr. B. Ahern

We have had no decision from the Chair on that matter. I will leave it at that but I would like the position clarified because it is a new ruling in the context of rulings of the Chair in the past 30 or 40 years.

A number of proposals for what has been colloqually called a "hot money" amnesty have featured in media speculation for some years now. They have all been based on the premise that there is a large amount of money in evaded taxes and undeclared income salted away in accounts and assets abroad. I must stress that there are no reliable estimates available of the amount involved, despite those who say that it could be of the order of £1 billion or £2 billion. Those figures have been mentioned by the commentators and by some people who may have knowledge, but it is difficult to know. It is the nature of such funds that any figures must be speculative and we should be clear on that in this debate.

The main argument in favour of a new amnesty has been that, given appropriate incentives, a proportion of this money would be attracted back home. A variety of beneficial effects have been suggested and many of those have been debated at length in this debate. For example, the revenue take for the Exchequer, the improvement of external reserves, the release of moribund funds for productive use an improved flow of funds to the economy which could be used to assist PAYE taxpayers through many of the schemes in health, education and welfare and generally developing capital expenditure schemes. The last four speakers referred to capital expenditure schemes and how we could use the money from those schemes for hospitals, homes for the mentally handicapped and for many projects where the funding would be required on a once-off basis.

I will state the Government's objectives. The first is to secure some tax on funds which are not declared and whose evasion is likely to be difficult to detect at this stage. Second, to make possible the use of undeclared funds abroad or dormant at home — it is not possible to distinguish between those funds — for the general economic benefit and for assisting the PAYE compliant taxpayer generally. Third, to give a final chance to those who have failed to meet their obligations in the past to regularise their tax affairs. I refer to people who would have had an opportunity in 1988 to clear up their tax affairs but who did not avail of the option. Tax advisers and accountants have told us that in 1988 the last few weeks were hectic, that they spent all their time advising people to pay up the reduced rate of taxes, that we were not interested in chasing the undisclosed amounts. The Government will over the next week or so be considering a range of possible restrictions and exclusions from the scope of the incentive schemes——

Mr. Cox

Following the debate.

Mr. B. Ahern

——from the standpoint of the overall objectives of the measure. In regard to the comments made here today, it would not be appropriate to indicate what exclusions or restrictions may be finally decided, but I have listened carefully to those comments and will take them into account.

Mrs. Doyle

What will the tax rate be?

Mr. B. Ahern

I am a strong arguer. People quoted me today in regard to what I have said in and out of Government. They have heard me argue about matters in Government and others have heard me argue outside of Government. I strongly support compliant taxpayers. I believe we must do all we can to improve, develop and expand the tax system. However, I find it hard to listen to Deputies who berated me in this House last year when I tried to give the Revenue Commissioners additional powers. I was called a stark raving socialist by a Member who came in here in the last two days and that Member last year spoke against granting additional powers to the Revenue Commissioners. When we are talking about hypocrisy, that speaker, whom I will not mention, was the worst during the two days. It is not possible to have it both ways. You cannot be against giving the Revenue Commissioners powers, and also against public service pay bills. The same Member also moaned about public service pay costs. Pay costs relate to staff and staff are required to detect defaulters. There are 3.5 million people here, about one million are under 15, another sizeable proportion, perhaps 0.5 million or more, have very little money. That leaves somewhere around two million who would be taxable. There are approximately 15 million bank accounts here and that figure does not relate to offshore accounts. We should not delude ourselves that there are not great resources here and that we do not all know about them. I know from good sources within the Central Bank and elsewhere that in some towns and perhaps cities here the foreign accounts are greater than the domestic accounts. Members who have debated this matter for 26 hours and asked where is all this money and what this is all about, should think again.

(Interruptions.)

Mr. B. Ahern

I have listened to the debate for 26 hours and to as many speakers as the Opposition could find and I will not listen any more.

Leas-Cheann Comhairle

The Minister, without interruption.

Mr. B. Ahern

We now have a chance once and for all to stop deluding ourselves. I believe in a compliant system and a compliant society, but I doubt if many Members in this House believe in that. If they believe in providing the necessary resources to stop tax defaulters, non-compliance and illegality, then let us consider two things. Let us consider a tax amnesty for the so-called rich, though I must say that most of the letters I get are from small publicans. Members of the House a year ago said that small publicans were losing money, that they could not survive, that they would all be broke, even though they get 38 per cent gross tax, but we will not go into that now. The Leas-Cheann Chomhairle would know more about that than I do. Small shopkeepers, bookmakers, people who operate in back garages, people who were caught when the rates of tax were 65 per cent — none of these people is a multi-millionaire; I have not received a letter supporting this measure from any multi-millionaire. They are all small business people because they have——

(Interruptions.)

Mr. B. Ahern

Deputy McDowell realises that rich people would go to him.

Mr. Cox

What about the Telecom money?

(Interruptions.)

Mr. B. Ahern

They would get legal and tax advice from individuals and would transfer the money out. Then they would invest it and get back to back loans from the State. I know how the system works and so does the Deputy. I do not believe there is an amount of £2 billion in accounts in offshore islands. I have attempted over the last 12 months to find out the amount in so far as it is possible to do so, but it is difficult to get people to agree on figures. We have somewhere in the region of 15 million bank accounts and that is the issue.

Another point has been made here relating to a social welfare amnesty. I would be prepared to work on a scheme to consider around the same time a social welfare amnesty for people who are either fraudulently drawing on the system or people who have not paid their contributions. There is a case for those people. They are also operating outside the system. Social Welfare recipients or business people with big or small businesses, and who may have invested money inside or outside the country in undisclosed or hidden accounts, are involved. People have put forward various examples here. But those examples are only a fraction of what people on both sides invested in this have written to me about in recent weeks.

This amnesty will have to be introduced with stringent penalties. The position will be that people in our society who defrauded will go to jail. You cannot stand over a position where a young lad in town will get six months for some minor offence while other people can either get tax written off or in some other way get away with evading tax. The tax system must be cleaned up. We have never cleaned up the tax system. Most of the money we are talking about has gone out from 1974 to 1978 under successive Governments. It is not money that has gone out in the last 12 months or the last two years.

Mr. Cox

The golden carrot followed by the wooden stick.

Mr. B. Ahern

There are about 800,000 taxpayers with a tax liability. There are about 110,000 self-employed. Therefore, 88 per cent is irrelevant because it is on a totally different base and there is no point in discussing that.

There is another point I would like to answer. It was raised here before and I heard it answered here by Ray Mac-Sharry when he was in this House. The 1988 amnesty did not detect many people outside the system. In fact, I asked for the figure last night and 379 taxpayers were detected who had not been in the system. They were way behind in their payments but thousands of people on PAYE or PRSI were not detected. The amount of money collected from that measure was quite small in relation to the overall £500 million. Therefore, we should not say that most of the people detected in 1988 were outside the system. In fact, I do not think we detected any of them, the system was not designed for that purpose and it had no effect whatsoever.

Deputy Yates made the point that a system is designed for a particular purpose. The criterion is whether the system is good or bad. The 1988 scheme was designed for a particular purpose and it was successful. We have had schemes relating to stamp duties. They were designed for a particular system. We had an amnesty in 1932, 1963 and also in 1986. Richie Ryan introduced an amnesty in 1974. There have been five amnesties to date. We had the 1988 amnesty and others which were introduced for smaller taxes. There were five amnesties of the kind we have been debating here for the last 24 hours.

The Government has examined carefully all the complex arguments — and they are complex — and has decided there will be an incentive scheme directed at those with previously undisclosed tax liabilities. It will offer partial relief in respect of certain categories of undisclosed tax liabilities which arose prior to 6 April 1991. The scheme is intended as a final opportunity to those concerned to regularise their affairs and will have to be accompanied by the introduction of the penalties that I mentioned. These penalties will include jail sentences because as far as I know only two people reached that stage, one of whom perhaps wanted to serve some time because of constant arguments with the Revenue Commissioners.

In this scheme the Government will be concerned to minimise the possible adverse implications of any new amnesty for the Revenue Commissioners' ongoing enforcement and collection programme which has improved significantly since 1988. The idea is to get people into the scheme with their true rate of earnings and obtain the appropriate taxes from them while in the scheme. That is something we have never applied to all of those people who have a large proportion of these millions of pounds in bank accounts. The Government is also conscious of the need to protect against the danger that the introduction of a further major amnesty at this stage would lead to the disimprovement in compliance by normal scrupulous taxpayers. We must be careful that the scheme we devise does not make it attractive for compliant taxpayers to become non-compliant. We must examine that carefully. We have to reduce the scope for diverting current income to an amnesty. It is clearly essential to exclude tax relating to more recent years from the ambit of an amnesty and also liabilities which are being actively pursued by the Revenue Commissioners. They would have to be excluded and there could be many other exclusions also but that is an issue the Government is examining at present. The exclusions and the arguments put forward here are issues that we will consider.

The funds which are expected to flow from this scheme — and I hope we will get this money because otherwise it will continue to lie there for non-compliant taxpayers — will be used for many worthwhile schemes, approximately 20 or 30 of which have been indicated here, but the argument——

Mr. Cox

The Minister spent it about 30 times.

Mr. B. Ahern

——that the money cannot be spent twice does not apply to capital projects and it can also assist the 1 per cent, as many people would seem to wish. There are many more beneficial schemes also.

Mr. Cox

From one quick fix to another.

Mr. B. Ahern

I honestly believe that a Government's approach in creating an amnesty by a carrot and stick mechanism is an attempt to establish a tax compliant society here for once and for all because we do not have one, despite five previous amnesties.

Mr. Allen

Only for the PAYE man.

Mr. M. McDowell

Does the Minister honestly believe that?

An Leas-Cheann Comhairle

The Minister is endeavouring to reply to 29 contributions and he has only another minute remaining.

Mr. B. Ahern

The people who are heckling me are those who stayed here only for ten minutes and were gone for the rest of the debate.

Mr. Cox

Not true.

Mr. B. Ahern

I am not referring to Deputy Cox. He remained here and he should feel very proud that what he wanted to do was stop a number of very good amendments to very serious issues that many people in this country were very interested in not being discussed whatsoever.

Mr. Cox

I made a strong contribution on this issue last week and the Minister blocked it.

Mr. B. Ahern

Amendments dealing with the 1 per cent levy, the probate tax, the incentive schemes and all of the other measures were blocked.

(Interruptions.)

Mr. J. Higgins

May I raise a point of order after the vote?

An Leas-Cheann Comhairle

The Deputy must resume his seat. I am now obliged to put the question in accordance with an order of the Dáil this day.

Question proposed: "That the amendments set down by the Minister for Finance and not disposed of are hereby made to the Bill, that Fourth Stage is hereby completed and that the Bill is hereby passed."

The Dáil divided: Tá, 79; Níl, 45.

Tá

• Ahern, Bertie.
• Ahern, Dermot.
• Ahern, Michael.
• Ahern, Noel.
• Bell, Michael.
• Bhamjee, Moosajee.
• Briscoe, Ben.
• Broughan, Tommy.
• Browne, John (Wexford).
• Burke, Raphael P.
• Callely, Ivor.
• Collins, Gerard.
• Connolly, Ger.
• Costello, Joe.
• Cowen, Brian.
• Davern, Noel.
• Dempsey, Noel.
• de Valera, Síle.
• Doherty, Seán.
• Ellis, John.
• Ferris, Michael.
• Fitzgerald, Brian.
• Fitzgerald, Eithne.
• Fitzgerald, Liam.
• Flood, Chris.
• Foley, Denis.
• Foxe, Tom.
• Gallagher, Pat the Cope.
• Gallagher, Pat.
• Haughey, Seán.
• Higgins, Michael D.
• Howlin, Brendan.
• Hughes, Sáamus.
• Hyland, Liam.
• Jacob, Joe.
• Kavanagh, Liam.
• Kemmy, Jim.
• Kenny, Seán.
• Killeen, Tony.
• Kirk, Sáamus.
• Kitt, Michael P.
• Lawlor, Liam.
• Lenihan, Brian.
• Leonard, Jimmy.
• McCreevy, Charlie.
• McDaid, James.
• McDowell, Derek.
• Moffatt, Tom.
• Morley, P.J.
• Moynihan, Donal.
• Moynihan-Cronin, Breeda.
• Mulvihill, John.
• Nolan, M.J.
• Ó Cuív, Éamon.
• O'Dea, Willie.
• O'Donoghue, John.
• O'Hanlon, Rory.
• O'Keeffe, Batt.
• O'Keeffe, Ned.
• O'Rourke, Mary.
• O'Shea, Brian.
• O'Sullivan, Gerry.
• O'Sullivan, Toddy.
• Pattison, Sáamus.
• Penrose, William.
• Power, Seán.
• Quinn, Ruairí.
• Reynolds, Albert.
• Ryan, Eoin.
• Ryan, John.
• Ryan, Seán.
• Shortall, Róisín.
• Smith, Brendan.
• Smith, Michael.
• Taylor, Mervyn.
• Wallace, Dan.
• Wallace, Mary.
• Walsh, Eamon.
• Walsh, Joe.

Níl

• Ahearn, Theresa.
• Allen, Bernard.
• Barrett, Seán.
• Boylan, Andrew.
• Browne, John (Carlow-Kilkenny).
• Bruton, Richard.
• Crawford, Seymour.
• Creed, Michael.
• Currie, Austin.
• Deenihan, Jimmy.
• De Rossa, Proinsias.
• Doyle, Avril.
• Dukes, Alan M.
• Durkan, Bernard J.
• Finucane, Michael.
• Fitzgerald, Frances.
• Flanagan, Charles.
• Gilmore, Eamon.
• Gregory, Tony.
• Harney, Mary.
• Higgins, Jim.
• Hogan, Philip.
• Burke, Liam.
• Carey, Donal.
• Clohessy, Peadar.
• Connaughton, Paul.
• Connor, John.
• Cox, Pat.
• Kenny, Enda.
• Keogh, Helen.
• Lowry, Michael.
• McDowell, Michael.
• McGahon, Brendan.
• McGinley, Dinny.
• McGrath, Paul.
• McManus, Liz.
• Noonan, Michael (Limerick East).
• O'Donnell, Liz.
• O'Malley, Desmond J.
• Quill, Máirín.
• Rabbitte, Pat.
• Sargent, Trevor.
• Shatter, Alan.
• Timmins, Godfrey.
• Yates, Ivan.

Tellers: Tá, Deputies Dempsey and Ferris; Níl, Deputies E. Kenny and Keogh.

Question declared carried.