Finance Bill 2004: Second Stage.

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

This Finance Bill implements the tax changes announced in the budget and provides for a range of other measures. In particular, the Bill includes measures that will continue to foster an environment which will stimulate investment and provide more jobs. The budget and this Finance Bill lay the foundation for an early return of significant economic growth. All the indicators point that way at home and abroad. Our finances are in good hands, as the EU agreed yesterday at ECOFIN when it gave us a clean bill of health under the Stability and Growth Pact. The economy too is in safe hands and will continue to be so under this Government.

The Bill runs to 91 sections and four Schedules. I propose to outline the main provisions in the time available to me. The Committee Stage will provide an opportunity to debate the Bill in detail. I look forward to hearing the views of Deputies.

Part I of the Bill, which runs from section 1 to 42, deals with income tax, corporation tax and capital gains tax. In my period in office the income tax burden has reduced significantly. Since 1997, average tax rates have fallen for all categories of taxpayer, including those on lower incomes. After budget 2004, for a person on the average industrial wage, the average tax rate will be ten percentage points lower than it was in 1997. An increasing proportion of those on the income tax record, over 35% of all income earners, pay no tax at all. The number of such income earners increased by over 75% from 380,000 in 1997-98 to 669,000 after budget 2004.

After budget 2004, the percentage of the income tax yield coming from those earning at or under the average industrial wage is estimated to be 6% as compared with over 14% in 1997. That in a nutshell is the answer to some Deputies' recently discovered concerns for those on the average industrial wage. We have helped those on both low and middle incomes during our periods in Government by an enormous amount, unparalleled by any other recent Government of whatever political complexion.

Now is a period to consolidate the gains we have made. Available resources have been concentrated on continuing progress towards removing those on the minimum wage from the tax net. When the statutory minimum wage came into effect in April 2000, less than 64% of the minimum wage was exempt from tax. Section 3 increases the entry point to taxation of a PAYE worker by €240 per year to 90% of the increased new minimum wage annualised. Thus, for a single PAYE person, the first €12,800 per annum, or €246 per week, of earnings will be tax free. All PAYE workers will benefit from this increase of €240 in the employee tax credit.

Section 2 increases further the exemption limits from income tax for persons aged 65 and over to €15,500 single and €31,000 married. Since I became Minister for Finance the income tax exemption limits for the elderly have increased by more than 135%. In that period more than 81,000 income earners aged 65 or over have been removed from the tax net.

Section 4 increases the standard-rated allowance for trade union subscriptions from €130 to €200. Section 6 puts beyond doubt that income arising from the investment of personal injury awards made by the Personal Injuries Assessment Board for permanently incapacitated persons will be exempt from income tax in the same way as if the awards had been made by a court. This applies where the income in question forms the sole or main income of the individual.

Section 7 exempts from income tax compensatory awards where an individual's rights under employment-related legislation have been infringed, for example, in the case of discrimination, harassment or victimisation. Up to now, the position has been that such awards have been subject to income tax.

In the Finance Act 2003, I provided for the direct application of PAYE to taxable benefits-in-kind. Taken together with the changes in the Social Welfare Act 2003, this has ensured the application of PAYE and PRSI, including the training and health contribution levies, to these benefits from January this year. Some further legislative provisions are required now to bed down the new regime and these are provided for in sections 8 and 9. They include an exemption for mobile phones as well as for computers and high-speed Internet connections provided by an employer to an employee in their home for business use. An exemption in respect of certain company vans parked at home by employees is also provided for. This takes account of representations made to me by both employers and employees, and I was happy to respond favourably.

Section 9 also extends the existing BIK tax exemption for employer-provided travel passes to include Luas services, which are due to commence this year, while section 10 confirms the budget day announcement that the specified rate used to calculate the benefit-in-kind charge on certain preferential rate mortgage loans will be reduced from 4.5% to 3.5%.

Section 11 extends the existing standard-rated tax relief in respect of health insurance policies which cover non-routine dental treatment to policies issued by insurers providing dental insurance only. The budget announcement of an income tax exemption for income received by Gaeltacht households under the summer college student scheme is provided for in section 12.

Section 13 provides for an updating of the qualification requirements in respect of the 100% stock relief for young trained farmers to reflect changes in the underlying academic courses. It also provides that, in general, it is the achievement of certain standards that is mandatory rather than just attendance at courses. Similar provisions are included in sections 68 and 69 in respect of stamp duty relief for young trained farmers.

Under section 14 the income tax exemption to encourage farm leasing is being improved by increasing the annual amount of leasing income exempted from tax and reducing the age limit for qualifying lessors. These improvements in the relief will encourage the higher utilisation of our agricultural land, which will become all the more important in view of the changes in the Common Agricultural Policy.

Section 16 facilitates occupational pension schemes in their investment activities by providing that any such schemes which borrow for investment reasons can be approved pension schemes for tax purposes.

Section 17 gives a capital gains tax exemption to certain individuals on the disposal of assets where the individuals already have an income tax exemption on the income derived from those assets, for example, persons in receipt of court compensation arising from incapacity where the gains and income from those assets are their principal source of income and gains. This will facilitate the use of a wider range of investments by these individuals.

The business expansion scheme and seed capital scheme reliefs are good schemes as long as they remain focused and targeted. Having reviewed the schemes in the lead-up to the budget, I am satisfied they continue to serve their purpose as now focused and section 18 provides for an extension to these schemes for a further three years until 31 December 2006. It also provides an increase in the maximum amount a company can raise under both schemes, from €750,000 to €1 million as announced.

The increase in the limit and extension in time from 5 February 2004 to 31 December 2006 and certain other changes to the schemes will be subject to a commencement order to allow for clarification of potential EU state aid issues raised by the European Commission. Other changes include an increase in the non-PAYE income limit for investor eligibility for the seed capital scheme and the phasing out by end-2004 of the application of the seed capital scheme to trading activities in an exchange facility established in the Custom House Docks area in Dublin.

Separate to the commencement order, an initial extension of the scheme to 4 February 2004 is provided for and sections 18 and 19 provide for transitional measures, including for arrangements and investments made before 4 February 2004.

Section 20 provides for a register of principal contractors for the purposes of relevant contracts tax, the tax which principal contractors are obliged to deduct at a rate of 35% from payments made to certain sub-contractors in the construction, meat processing and forestry sectors.

I have stated previously that it is essential that tax avoidance schemes and loopholes are tackled vigorously. In a press release last March I made clear my intention to close a loophole which had come to my attention. It related to the relief available to individuals in respect of interest paid on money borrowed for the purposes of acquiring an equity stake in, or lending money to, a company where the moneys are used to acquire certain premises. This is provided for in section 22.

Section 23 amends the scheme of capital allowances for qualifying residential units associated with registered nursing homes. The minimum number of qualifying residential units is being reduced from 20 to ten. The condition for buildings to be two-storey at maximum is being amended to allow that the units may be in a building of any number of floors where a fire safety certificate is issued.

Section 24 redrafts one of the eligibility conditions for investors in private hospitals to bring it into line with other reliefs by removing an unintended effect of disqualifying all investors in a project where one is ineligible.

Sections 25, 26 and 27 provide for an extension of various tax reliefs as outlined in the budget and set out transitional provisions where appropriate, as well as clarifying the conditions associated with the reliefs, for example, where planning issues arise.

I have always held the view that targeted, well designed tax incentive schemes can be a useful instrument in achieving desirable public policy objectives. Indeed, many places in Ireland have enjoyed a regeneration directly arising from area-based tax reliefs. The value of such schemes must be balanced against the important objective of ensuring a wide tax base if we are to maintain low rates. Accordingly, these reliefs are being phased out. However, arising from concerns expressed by various individuals and groups, including various local authorities, I felt that, on balance, there was a rationale for allowing a longer wind-down of the various tax reliefs referred to in these sections. This will allow for a more orderly completion of projects where delays had arisen for various reasons.

Section 28 confirms my budget announcement that the termination date for film relief is being extended from 31 December 2004 to 31 December 2008 and the cap on the amount that can be raised under the section in respect of any one film is being increased from €10.5 million to €15 million per film. Changes to address instances of abuse are provided for in the section and these include the revision of the certification procedures, provisions to deal with over-complicated financial structures and enhanced requirements in respect of record keeping by film production companies. Deputies will be aware of the intense lobbying from the film industry aimed at convincing all parties that film relief should be retained, and my decision was broadly welcomed across the political spectrum. Those who greeted this decision from political parties other than my own should bear in mind that its continuation will mean that higher earners can reduce their tax bill through investment in qualifying films. European Commission approval will be needed for the continuation of the scheme and the increase in the overall investment.

Ireland has excelled in attracting foreign investment in recent years, with some of the world's leading companies choosing to locate here. However, we cannot rest on our laurels and we must always be vigilant in ensuring that Ireland remains competitive in this regard. The Bill provides measures that enhance the prospect of attracting further high quality investment projects to Ireland leading to additional future employment opportunities.

Sections 31, 34 and 42 are designed to encourage multinational corporations to locate their regional headquarters and holding companies in Ireland. The Bill provides for an exemption from tax on gains for holding companies on the disposal of a shareholding in a subsidiary, whether Irish or foreign, and makes a number of related changes to the scope of our provisions for relief against foreign tax in respect of dividend income paid to parent companies. Specifically, sections 31 and 34 amend the provisions on relief for foreign taxation in the case of dividends paid by a subsidiary to a parent company.

To qualify for relief for foreign taxation in the case of dividend income under a unilateral credit relief provision where no double taxation treaty applies, the shareholding involved must, up to now, have been at least 25% of the subsidiary company. This is being reduced to 5%. Relief is also being made available for foreign tax imposed on company tiers lower than the immediate subsidiary. Section 34 will implement Ireland's obligations under the EU parent and subsidiary directive. Section 31 will also allow companies to average the credit tax for foreign tax across dividend streams on shareholdings of 5% or more for the purpose of calculating the relief. The section also extends the credit mechanism to certain sub-national taxes imposed in tax treaty countries where those taxes are not covered by the relevant tax treaty. This issue arises in particular in the case of the US and Canada where non-federal taxes are not covered by the relevant tax treaty.

The capital gains tax exemption provided in section 42 will only apply where the shareholding held by the holding company is a minimum of 10% of the subsidiary concerned and at least €15 million in value, or where the shareholding held is a minimum of 5% of the subsidiary concerned and at least €50 million in value. It is also a requirement that the subsidiary is primarily a trading company or, taken together, the holding company and its subsidiaries are primarily a trading group. It is also a condition that the minimum shareholding has been held for a continuous period of 12 months in the three years prior to the disposal.

These measures will encourage foreign direct investment by facilitating multinational companies with operations in a number of different countries to set up holding companies in Ireland. The objective is to bring regional headquarters companies to Ireland, which would include corporate functions such as control of regional operations, group treasury, and centralised administration.

The programme for Government includes commitments to build the capability of firms to carry out and manage research and development in Ireland and work to ensure that Ireland develops a world-class research capacity. Following on from my announcement in the budget, section 33 provides for a 20% tax credit for companies for qualifying incremental expenditure on research and development.

There is a need for the economy to make a decisive transition from high volume, lower value enterprise to high value, high innovation, knowledge intensive enterprise, and research and development activities can encourage such enterprise. In addition, increased research and development activities can help embed an existing firm's activities in Ireland as well as develop additional high quality employment. Deputies might be interested to note that tax incentives are widely used to stimulate research and development in other advanced economies. Their effectiveness in doing so has been established by a series of empirical studies, especially among large firms in high-tech sectors, and this is where the need in Ireland for greater research intensity is most pronounced. As with all tax reliefs it is important that the measure be focused. Accordingly the measure is targeted at encouraging additional research and development by basing the scheme on incremental expenditure rather than permanent additional tax deductions for all research and development activities.

Full details of the scheme, including a core definition of research and development activities, are set out in section 33 and detailed guidelines will be issued by my colleague, the Minister for Enterprise, Trade and Employment, on what activities will constitute research and development activities for the purpose of the credit. Companies will be able to deduct 20% of the incremental spend on research and development from their corporation tax bill in addition to its normal deduction as an expense. Incremental spend will be calculated by reference to a base year. For expenditure in 2004, 2005 and 2006, incremental spend will be calculated by reference to expenditure in 2003. In 2007 the base year will be 2004: in 2008, 2005 will be the base and so on. Capital investment on construction and refurbishment of building will be treated separately, with a 20% credit made available irrespective of its incremental nature.

Section 35 is aimed at assisting the leasing sector of our financial industry and it provides that lessors engaged in finance leasing may elect to pay tax on income from the finance leasing of short-life assets on the basis of accounting income rather than income based on income tax rules. The option will be subject to a number of conditions detailed in the Bill. Section 39 extends the qualifying period for the scheme of tax relief for corporate investment in certain renewable energy projects from 31 December 2004 to 31 December 2006.

An EU directive dealing with the taxation of interest and royalties was agreed in 2003. The purpose of this directive is to eliminate withholding taxes on cross-border interest and royalty payments between associated companies and branches in different member states. The directive was transposed by way of statutory instrument in late 2003 and its provisions are being repeated in section 41 and Schedule 1 with a number of minor technical additions.

Part 2 deals with excise duties. Sections 45 and 48 confirm, respectively, the budget increases of 25 cent including VAT in the excise duty on a packet of 20 cigarettes and 5 cent per litre including VAT in respect of petrol and diesel. As indicated in my budget, changes to indirect taxes were limited this year and have contributed to our goal of reducing inflation.

Section 46 enables certain quantitative restrictions on cigarettes and tobacco to be retained in respect of travellers from the new EU member states after 1 May next. In effect, the regime applying to travellers from other existing member states will not be applied to cigarettes or tobacco acquired by travellers from the new member states in question during the transitional arrangements for accession states.

Sections 49 and 50 provide for a qualified exemption from the excise duty on biofuels for use in certain approved pilot projects, including those undertaken to test the technical viability of using biofuel as a motor fuel.

Part 3 deals with VAT. Sections 55, 56 and 58 provide for the EU directive on the VAT treatment of cross-border supplies of gas and electricity to be transposed into Irish VAT law. Increased liberalisation of the electricity and gas markets and increased cross-border trade between member states required a change in the rules to clarify that supplies of gas and electricity were taxable in the member state of final consumption, avoiding the need for a supplier to register in every member state which he or she supplies.

Section 57 confirms that, where a house and site are sold together, the VAT treatment is that both the house arid the site are subject to VAT. An interpretation of the VAT Act 1972 has been used to attempt to exempt the sale of developed sites, where a site and new house or apartment are being sold together. The Bill provides that, where a developed site is sold in such circumstances, it is subject to VAT.

Sections 59 and 61 confirm the budget night financial resolution to increase the farmers' flat rate addition for VAT purposes from 4.3% to 4.4% with effect from 1 January 2004. There is a corresponding increase to 4.4% for the sale of livestock by VAT registered farmers.

Section 63 clarifies that, where a trader in Ireland supplies goods or services to a trader abroad in a situation where the recipient in the other member state is liable for VAT on a reverse charge basis, then the Irish trader must issue a VAT invoice. This will not impose any extra burden on traders and reflects existing commercial practice. Sections 64 and 65 contain a number of technical amendments to clarify the VAT treatment of fund management and administration services provided to Irish and foreign investment funds.

The stamp duty provisions are contained in Part 4. The stamp duty exemption for owner-occupiers of new houses and apartments has up to now been dependent on a floor area certificate from the Department of the Environment, Heritage and Local Government indicating that the building is not greater than 125 square metres. However, this particular certification process is linked with the now abolished new house grants and will cease on 2 April 2004. Consequently, section 71 provides for a new floor area compliance certificate for such houses and apartments, which will also certify that the property conforms to approved building standards. The certificate will be issued by the Department of the Environment, Heritage and Local Government for the purpose of the stamp duty exemption.

Section 73 replaces the current section of the Stamp Duties Consolidation Act 1999 which provided for a stamp duty exemption for certain international trademarks. I announced in the budget that I would introduce a stamp duty exemption for transfers of various types of intellectual property. This new wider and more comprehensive section provides for an exemption from stamp duty on the sale, transfer or other disposition of intellectual property. Intellectual property includes any patent, trademark, copyright, registered design, design right, invention, domain name, supplementary protection certificate or plant breeders' rights. This measure is aimed at making Ireland a more attractive place for the location of such intellectual property.

Section 76 provides for an extension of capital acquisitions tax business relief to the situation where two or more companies hold shares in family-owned businesses. The current legislative provision only covers situations where there is one holding company.

Sections 77 and 80 provide for an extension of the legislative framework that underpins tax information exchange agreements with certain jurisdictions to include gift and inheritance tax. An amendment is also being made to the relevant legislation to apply the existing Revenue powers to encompass the foreign equivalent of estate, inheritance and gift tax.

Section 83 amends the scheme of tax relief for donations of heritage items to cultural institutions of the State. The minimum value of an item or collection which can qualify is being increased from €100,000 to €150,000 with the additional requirement that, in the case of a collection, at least one item in the collection must have a minimum value of €50.000. In addition, there are detailed changes in the rules governing the selection of heritage items. These changes are designed to facilitate the work of the selection committee which comprises representatives of the cultural institutions and bodies concerned.

Subject to certain conditions, the Revenue Commissioners already have the power to apply to the High Court for an order requiring a financial institution to make records available for inspection or to furnish information relevant to the tax liability of a taxpayer, including a group or class of person whose individual identities are not known to Revenue. Section 84 extends this power so that it can apply in respect of information and records held by certain foreign financial entities which are under the control of a domestic financial institution. This is a recommendation made in the Revenue powers group report which is being proceeded with now because of the current Revenue initiative in regard to offshore accounts. I published the report of the Revenue powers group on 4 February 2004 with a view to allowing time for all interested parties to discuss and debate the issues raised by the group. I will consider the various recommendations made in the report in the context of next year's Finance Bill.

Section 87 and Schedule 4 confirm the transposition into Irish law of the EU savings directive on the taxation of savings income in the form of interest payments. The aim of the directive is to enable savings income in the form of interest payments made in one EU member state to individuals resident for tax purposes in another EU member state to be taxed in accordance with the laws of the latter member state.

Section 88 provides for the carrying over from one year to another of unspent Exchequer capital allocations up to a limit of 10% of each year's total capital allocation under the rolling five year multi-annual envelopes for Departments announced in the budget. The Government is committed to keeping capital investment at 5% of gross national product over the period 2004 to 2008. Under the capital envelopes, a total of €33.6 billion will be available for capital investment to support the economy's future growth potential. The ability to carry forward from one year to another unspent Exchequer capital is an important element of multi-annual budgeting for capital purposes and for the management of capital programmes.

As Minister for Finance, I have managed in successive budgets and Finance Bills to create a low tax rate environment, a policy which has boosted investment and created jobs. Probably the most telling statistic is that, over the past six years, the numbers at work have increased by more than 300,000. Unemployment today remains at historically low levels. Whatever one's ideology in this House, it must be accepted that the onus is on us, as policymakers, to create conditions that reduce unemployment. However, while much has been achieved in this respect, we cannot take future prosperity for granted. This Bill includes significant measures that ensure further investment for Ireland and jobs for its people.

I hope the House has benefited from the outline I gave of the provisions in the Bill. I look forward to the debate on it and commend the Bill to the House.

I agree with the Minister that there is an onus on all Members to focus on the preservation and growth of long-term, sustainable jobs in this community. That legacy is now at risk and all the indications are that we are losing competitiveness in significant areas. There are serious problems in regard to infrastructure, our technology lead has been lost and, in the area of telecommunications where we had been considered leaders, we have lost that lead following the botched handling of the telecommunications network by the Government.

What is missing from this Finance Bill and the Minister's finance strategy is the means by which we are to address the serious challenges ahead. I would have liked to see the Minister dwell more on those real challenges, about which I know he is preaching to the rest of Europe on the basis of the Lisbon agenda. We need to learn quickly some of those lessons ourselves because serious problems are coming up the track.

This Finance Bill is very much for the insiders in society and does nothing for ordinary workers and their families. It extends and tweaks a series of generous tax breaks for the well-off without any justification being offered for these changes. There is an uncomfortable feeling which remains after reading this Bill that many of these changes are designed for well-placed people who have had the ear of Ministers over the past year. There is nothing in the Bill for ordinary families.

Personal tax credits have been frozen and stealth taxes and charges abound. The most recent manifestation of this is that it is said to young families trying to buy a home or those trying to establish businesses that they must pay substantial development levies for the privilege of getting on the first rung of business or family life. That is a highly negative approach to young people who are the key to our future, whether in terms of future competitiveness or the future quality of our society.

The Bill has remained silent on many important issues which will arise within the narrow finance brief, although I realise that the Minister has influence on much beyond that brief. It came as something of a bolt from the blue to discover during the week, when reading replies the Minister made to Deputies Paul McGrath and Deasy, that the Revenue found itself unable to prosecute those who breached the 1993 tax amnesty. It has also found itself unable to find evidence against any financial advisor within a financial institution which assisted people to set up bogus non-resident accounts. These have been seen as serious public issues in respect of which we need to prove to the community that we have a tax code and that those who do wrong will be pursued. Despite this, the Revenue Commissioners slip out through such replies that they are unable to pursue these cases.

It is ironic that, in the same week this information emerged from the Revenue Commissioners, a report commissioned by the Minister was published regarding Revenue powers. The report is silent on the issue of evidence problems which the Revenue Commissioners apparently encounter. Was this due to a failure in the terms of reference the Minister offered to this Revenue power group? I would have liked that group to discuss the problems of obtaining evidence and pursuing cases because, ultimately, that is the test. We need to pursue this as the crime it is. The review group should consider afresh this serious issue.

I accept that the Revenue powers group has come forward with some new suggestions. One which I am glad is included in the Bill is the obligation on financial institutions which control another company overseas to release documentation to the Revenue Commissioners. That is a significant issue in regard to assisting Revenue to pursue unpaid tax.

Measures dealing with access to phone records and the ability of the Revenue Commissioners to question persons in Garda custody are not getting to the root of the problems of evidence collection, and unfinished business in this regard must be considered. It has been suggested in the newspapers that the success of the Criminal Assets Bureau came from pooling the powers of different agencies, specifically the Garda, Revenue and some of the other enforcement agencies, and that this produced results and performance which the Revenue Commissioners have not to date been able to achieve in respect of prosecutions. It seems that the Revenue powers group did not consider the CAB specifically. The group had discussions with many other groups but not the CAB, which surprised me.

I question the suggestion that we should drop certain penalty features of the existing code. I note that there is a suggestion to drop penalty interest features and the 200% tax liability penalty. The group asserts that this should only be used in what they call "legacy cases" such as Ansbacher and so on. While this has the rather touching implication that large-scale tax evasion is now a thing of the past, I am not sure that stands up to scrutiny. These will be important issues of debate during the course of the year. I am sorry the Minister has been remarkably silent on such issues which have come prominently into the public domain in the past week.

Another important issue which should have been addressed in the Bill and which has existed for a long time is the bizarre feature that a proposal to spend as little as €1,000 by a Department on some scheme will be subject to careful scrutiny, in general, although there have been remarkable cases in respect of which that did not happen. However, the relevant Department, with the Department of Finance looking over its shoulder, will scrutinise whether the scheme is a good one, its long-term implications and so on. There is a considerable degree of scrutiny of even a small €1,000 scheme. By contrast, the House can vote through tax allowances and concessions worth hundreds of millions of euros without any such scrutiny having been undertaken in advance of the decision. It is time we introduced a strong protocol regarding all reliefs in our tax code.

The protocol should include a detailed annual statement of the cost of the concession, an annual statement of the activities generated under it and the beneficiaries receiving it. It should have a sunset clause, so that each tax relief would have to be explicitly renewed on a regular basis by the Minister in a Finance Bill. It should include a cost-benefit review, undertaken on some sort of a five year rolling programme or whatever. There should be a cap on the maximum benefit a taxpayer could derive from this range of tax reliefs which are not related to their personal position as a family unit or whatever. There should be automatic indexation of the elements of the tax code so that Ministers cannot, by stealth, erode critical elements of the tax code, as happened in regard to personal tax credits and capital gains tax, neither of which are desirable in the long term. A new protocol on tax along these lines would go a long way towards creating a far greater consciousness in this House and the Department of Finance that concessions under the tax code are just as much money out of the Minister's pocket and mine as are spending proposals being brought forward by Ministers in spending Departments.

The history has been that tax decisions are almost invariablyad hoc and based on a hunch, not analysis. The Comptroller and Auditor General had to draw to our attention that, of 91 allowances given under the tax code, the Department had accurate estimates of just 48 of them. Huge swathes of tax revenue are being given relief without proper scrutiny. There is the ludicrous provision whereby some taxpayers can bed and breakfast outside the jurisdiction for 183 days and pay no tax. This issue is not being addressed. How do these features of the tax code square with the public interest? I do not think there is serious consideration of that debate in the round. We examine the individual changes the Minister makes from year to year, but there is no structure that generates a serious debate about these issues in the round.

I wish to deal with this year's crop of insiders who appear to have got in under the defences of the Department of Finance and squeezed something out of this Finance Bill, a facility which was not available to ordinary families. Reliefs are being extended for property-based investments. I am puzzled why this should be happening. I do not see evidence that the construction industry is in difficulty whereby there needs to be tax-based incentives for building. The industry is still strong. House prices are roaring ahead. Why should we decide that holiday homes should get tax relief almost within a year of deciding that first-time buyers in the midst of a housing crisis should not get the first-time buyer's grant, a traditional feature of our code? Why should we make such a decision and decide to perpetuate this for holiday homes? If any of the 166 Deputies were asked where their priority lies, I believe they would say it is with first-time buyers.

Multi-storey car parks are another strange feature. Why is it decided to give a tax concession to the construction of multi-storey car parks? I can understand it being provided for park and ride facilities where a social benefit is pursued. It is not the same in respect of multi-storey car parks.

Reliefs are being extended to private hospitals and sports injury clinics. Anyone looking at the health service in Ireland in 2004 would not say private hospitals and sports injury clinics, lucrative ends of the market which are pretty secure, are where the priorities lie in the health service. At a time when public hospitals are starved of investment in bed capacity to deal with emergency and chronically ill people, why do we decide to give concessions to a well-heeled section of the health industry? Apparently private nursing homes — perhaps the Minister will confirm this is not the case — have empty beds because the schemes of support for patients are not sufficient to fill the existing beds, yet it has been decided to extend tax relief to the construction of private nursing homes at a time when there is a twelve and a half year waiting list for beds in public nursing homes while many beds in private nursing homes remain vacant because people cannot afford to go into them. Where is the holistic thinking in the way this is being done?

We should consider how ordinary people are being treated in regard to benefit-in-kind compared with the well-heeled. Benefit-in-kind will now be charged on a medical check-up provided by employers, despite the fact that it is a public good which should be promoted. However, a company director can take home a priceless work of art, hang it up in his living room and enjoy the benefit of it without paying a penny in benefit-in-kind. How can these contrasting treatments be justified?

Investors in private hospitals and sports injury clinics will receive tax relief while chronically disabled drivers have been told by the Minister that a review, which began in 1997 when he first took up office, is needed. He still has not mastered the complex issues involved in giving tax concessions to disabled drivers so that he could have announced a change in the existing scheme which is so niggardly to people in serious need. This is the contrast with the Punchestown decision which was taken within a week and with no assessment. Disabled people, one of the most disadvantaged groups in the community, are being told they must wait seven years.

The Taoiseach conveyed to me today that the Minister believes he must work further on this report. Much work needs to be done in the Department on this issue. It appears much work does not have to be done on sports injury clinics or other businesses that have the favoured ear of the Minister and his advisers. I do not point the finger solely at the Minister by saying he is somewhat deficient where others were holier than thou. I am saying, however, that there is no system for examining these issues as a whole. We are producing ludicrous choices. It is anad hoc approach at its worst and it needs to be changed.

There are some tax reliefs which people will welcome. Tax relief for the film industry was subjected to much analysis in the committee in which Deputies Burton and Ó Caoláin were involved. Scepticism was also expressed. I take the view that the film industry should not be reliant on a tax-based vehicle for its long-term future. I would like the Minister to use this period to look at ways of taking a more strategic approach to the long-term sustainability of this important industry without being so reliant on tax-based vehicles. It was a serious mistake to pull the mat from under an industry of this scale and importance to the country without prior evaluation by the Department. This became evident as we began to examine the issue. It indicates the inappropriatead hoc approach to many of these important issues in the tax code.

Many people will be disappointed that small and medium-sized industries, which are considered the seabed of our future, are being effectively excluded. If one does not spend €50,000 on research and development, one cannot benefit from this relief. I like the idea regarding incremental investment. This has been criticised by some people outside the House. The incremental idea is a good one. If this is a tool to be competitive in research and development, perhaps the Minister will inform us on Committee Stage whether we are as competitive as other tax jurisdictions in confining it solely to incremental investments, and is it a workable connection.

The Minister conceded last year that he recognised the credit card levy contained the unwanted feature of trapping people with their existing financial institution, as does the stamp duty on mortgage transfer. Perhaps the Minister will consider for Committee Stage an amendment which would remove these features. If people try to shop around, they must pay twice. They pay twice on their mortgage stamp duty or they pay twice on their credit card stamp duty. The Minister indicated during the year that he would review this aspect but it does not appear to have found its way into the Finance Bill.

Another significant issue which needs to be considered is support for families. The way we conduct our tax business does not encourage this. Recently the Minister for Social and Family Affairs said that it is not the job of the State to favour marriage over other family forms and that she doubted the wisdom of trying to encourage marriage. I take the opposite view. The State should support the framework of marriage because two individuals make an explicit commitment to one another and it is a good environment that should be supported. There is little doubt, however, that the main financial systems do little or nothing to support marriage or, indeed, cohabitation. Our system of tax reliefs offers substantial child premiums to parents who are not living together. When we look at the means tested schemes, it is typical that neither income ceilings nor disregards take account of the fact that supporting two spouses is more expensive than supporting one. The result is that couples are disadvantaged in access to means tested schemes. That is true of housing subsidies, higher education grants, medical cards, family income supplement and unemployment assistance. These are crucial areas of support to family but there is a thread of discrimination running through them and the Dáil has not examined the rationale behind this in a coherent way. It is time we did and I hope that the Minister for Social and Family Affairs, who is doing work in this area, will come forward with sensible proposals that would support families where two parents live together and look after their children. We recognise that families break down and there are many one-parent families who also need to be supported, but we should not systematically set out to discriminate in their favour in financial support.

There is also need to look more seriously at life-cycle burdens faced by families in our tax code. We must question the burden of stamp duty on first-time buyers, the lack of tax relief for child care, the discriminatory basis on which we support people who need long-term care in their old age and the poor treatment of home carers. These are all features on which the Minister has said he will not budge. How does that fit into the Government's family strategy? It is remarkably dissonant with that policy. We should have a serious debate on our disjointed approach to public finances and the family.

I am surprised we are silent on the issue of the carbon tax. We are told that a carbon tax system will be in place by the end of the year. Apart from the discussion document which the Minister has issued, we have received no inkling of his approach on the issue. The Government is obliged to notify its decision on emission trading regimes for Ireland by the end of March. That is intimately wrapped up with decisions we will make on the carbon tax. The Minister has made no provision for debate of the issue in the House and played a cat and mouse game when it came up in the past, turning the question around to ask the views of the Labour Party or Fine Gael, instead of setting out the options for a carbon tax and making a case for the Government's thinking on the subject.

Where is that debate? The deadlines are looming and decisions will be taken without any serious debate. We need to know the impact on the competitiveness of businesses and how we will protect them. We need to see how families on low incomes will be affected and if dirty industries will receive a valuable tax quota they can trade while small businesses have to pay a tax, a very discriminatory approach. We are sleepwalking into the decision on carbon tax. The Minister should lead the debate and have a proper exchange here. He is silent, however, and that is a mistake.

We have grown used to the phenomenon that is budget day. It has its origin in simpler times. It serves to focus attention on the urgent rather than the important much of the time, a feature of many budgets. It pitches important decisions into a secretive, partisan showpiece and it does not help the mature consideration of important issues in this House. It has time and again truncated proper scrutiny by Parliament. The entire system consists of putting the Estimates together secretly and publishing them within a week of the budget, with no opportunity to evaluate them before coming into the House with a slate of tax reliefs that have not been properly evaluated. It is all thrown into a Roman colloseum, where the Minister is champion of the day who must see off his rivals.

This system does not help us to plan for sensible and prudent public finances. The Minister indicated early in this regime how he would radically change that, but it has not happened. We are where we always were, with a serious debate on the Estimates half way through the year in which the money will be spent and this sort of sham debate about elements of our tax code without looking at it in its entirety. We are not going forwards, we are moving backwards.

That approach has also encouraged short-term thinking andad hoc decisions. The Comptroller and Auditor General has pointed this out to us on a number of occasions and the two most glaring examples are worth repeating. The granting of medical cards to everyone over 70 years of age led to twice the original estimated number of people benefiting according to the Comptroller and Auditor General. The bungled handling of the negotiations after already having announced the decision before any thought was put into it resulted in the cost per patient of the concession quadrupling. It was bizarre.

A person who made a capital gain of £5 million in the previous year got a medical card under the scheme.

The original forecast for the granting of pre-1953 pensions was €9 million and it proved to be 12 times that figure this year, a further example of the seat-of-the-pants decision-making this approach encourages. It also undermines hard-headed value for money approaches to the public finances. The Minister should press that point. I find it hard to understand how we succeeded in increasing the health budget in a five year period by more than 120% and the number employed in the sector by more than 30,000, but we are unable to tackle any of the key strategic issues in health in the context of all that massive spending. We cannot run an accident and emergency department — St. James's Hospital called a state of emergency during the week, with 196 people on beds in the accident and emergency department and no capacity to cope with them.

We should bring back Dr. Rory O'Hanlon.

The Hanly report tells us that we must restructure hospitals and close down accident and emergency departments to which communities feel they have access, but there are no resources to build the centres of excellence we are supposed to have. How is this money spent? We are now being told that this reform is necessary.

The Deputy sounds like me at a Cabinet meeting.

Why is the Minister not getting answers?

The man in the Chair was able to manage the money better. Things are worse now than when Deputy O'Hanlon was Minister.

The Ceann Comhairle should not be involved in debate in the House under any circumstances.

That is a feature of what is happening. It conspires against all of us in the House, Government and Opposition, and the Minister's interjection demonstrates that. Ministers are trapped within a system that presents them with an extremely narrow range of options in any given year. We have an antiquated method of putting together spending programmes. The demands of the existing schemes and bureaucracy must be catered for first and it is only the money that is left over that becomes the focus of political choice.

This was evident in the past two years when the Minister has had to curtail spending. What happened? Bureaucracy was not reformed or cut back but the things that come across the counter to the ordinary punter, the home help services, the grants to those with disabilities, the grants to community groups and the community employment schemes, were affected. All the things dependent on discretionary budgets got screwed while the system carried on as ever. That is a failing in the way we put together our budgets. A system of Government that encourages the permanent Government to have what it holds and leaves Ministers to grapple and scramble over the little that is left over is not a good one.

We need to consider more root and branch reform of the way we compile our Estimates and public finances. It would be beneficial to the Minister in resolving the issue. The separation of spending decisions and tax decisions is a false separation. We need to rebuild a coherence into what we are doing. That would have major benefits for our health system. We have some bizarre features in the tax relief that applies to the private sector end of the health system at a time when the public sector end is creaking and unable to cope with real priorities. Not even the smallest business in the land would follow the type of financial procedures with which we have grown up. It is time to make serious changes in this regard.

We in this House would do a good job if we began to put in place some new rules governing public finances, proofed our annual budgets against long-term strategic objectives, presented multi-year costs of any new scheme being initiated, subjected every scheme to value for money audits and put our customers and their needs at the heart of the system rather than the other way around where protecting the system takes precedence over the needs of the people who are dependent on public services.

Fundamentally, the Bill is a reactionary charter for artificial tax avoidance, acarte blanche for the professional designers of artificial tax avoidance schemes and their rich and powerful clients. It is highly ironic that, at a time when tax evasion had returned as a burning political issue, the Minister for Finance had chosen the occasion of this Bill to create a series of additional and extended tax breaks for the wealthy, facilitating them and their advisers in the construction of a new wave of artificial tax avoidance schemes, thus increasing the burden on tax compliant citizens.

As a result of the Bill, those who have previously been inclined towards tax evasion and overseas bank accounts — some of them have been here previously — may rest easy in their beds because, in section after section, a range of provisions are included for additional, attractive and easy-to-obtain tax breaks, further facilitating and encouraging the construction of highly artificial tax avoidance schemes. It appears there is a clear and conscious strategy on the part of the Minister for Finance, Fianna Fáil and the Progressive Democrats to make artificial tax avoidance so attractive that there is no longer a need to indulge in tax evasion.

The chairman of the Revenue Commissioners was recently quoted as saying to the Committee of Public Accounts that: "In extreme cases, exploiting legal tax loopholes is not very different from a guilty man walking free because of a legal technicality". Yet despite that statement by the chairman of the Revenue Commissioners, the Minister has brazenly decided to make this year's Finance Bill another bonanza for the designers of artificial tax avoidance schemes at a time when the majority of ordinary PAYE taxpayers will pay tax at the top rate.

This fundamental unfairness introduced into the tax code by the Government is destroying the confidence of every PAYE taxpayer in any notion of fairness or equality in taxation. This is the very set of circumstances that gave rise to the tax marches and unrest of the 1980s. When one takes into account that the Government has also presided over shabby cutbacks in social welfare to the tune of €50 million, it makes the Finance Bill giveaways to the rich all the more bitter.

I am especially concerned about the provision in section 16 dealing with retirement benefit schemes for tax purposes. The Minister proposes an amendment to allow pensions schemes approved by the Revenue to borrow money. Apart from the risk element that such gearing introduces, this will more than likely turn these schemes into speculative investment vehicles, in particular the small self-administered pension schemes, or SSAPS, of the very wealthy and some of the executive schemes. This is an unjustified give-away which will become a vehicle for large-scale tax avoidance over and above what these people already receive through the SSAPS. It will fuel property speculation as well as facilitate artificial tax avoidance. There is no good economic reason for this little bonanza in section 16.

A further question arises about whether a participant in a personal retirement savings account, PRSA, or an SSAP can borrow to acquire a specific asset. I would like an answer from the Minister on this. If he or she can, what is to stop a PRSA or an SSAP being used to acquire a specific asset over a taxpayer's working life or a significant part thereof, which in effect would allow a taxpayer to acquire the asset through the mechanism of the tax system effectively for free?

Previous reports by the Comptroller and Auditor General and the Revenue Commissioners have shown that some pension investment vehicles and the more well-known property based investments, holiday cottage investments and so on are eroding the tax base at a time when the majority of PAYE taxpayers pay the higher rate of tax. When dealing with the earlier sections, the Minister referred to headline rates of low taxation while, in effect, most PAYE taxpayers from this year will pay the higher 42% rate. That is the reality. The Minister refers to headline rates of low taxation while most ordinary families face a range of additional charges for health services, education and public transport. We heard the discussion in recent days about the new development levies being introduced by councils in respect of modest house extensions to existing houses, not new developments. Some county councils charge a fee of €120 for permission to erect a grave stone. That is part of this supposedly fairer tax system, backed up by a wide range of charges, impositions and stealth taxes on ordinary families.

Last year the Minister and Fianna Fáil promised faithfully that 2004 would be the final year for the glut of property based tax shelters that have crept into the tax code in recent years. If I remember correctly, we shared a joke about St. Augustine, purity, when it might arise and so on. I believe the Minister was keen on abolishing these property based tax breaks. In this Bill he has decided to offer Ireland's fat cats a wholly unjustified reprieve. It is not clear why he has done so — perhaps he has gone off St. Augustine — but his party's wealthy backers have had a quiet word in his ear at various fund-raisers. The Minister has failed to index the income tax code and more than half of all those who pay tax in 2004 will do so at the 42% rate while the wealthy will get away with the special new schemes.

In sections 23 to 27 a range of provisions are included for additional tax breaks, namely, investments in registered nursing homes in section 23, private hospitals and sport injury clinics in section 24, the extension of the scheme covering holiday camps and cottages in section 25, multi-storey car parks and urban renewal in section 26 and investments in buildings for third level purposes in section 28. Broadly, the Minister has extended the qualifying period for these property-based tax avoidance schemes to July 2006. In the case of nursing homes, he has reduced the size of qualifying developments from 20-bed units to ten-bed units and provided for such nursing homes to be in multi-storey buildings. We have no idea why. The significant widening of this relief is extremely odd in the context of the complaints by existing nursing home owners that these tax breaks are distorting the provision of care for the elderly.

Section 24 provides for an extension of the scheme of tax breaks for investments in private hospitals and private sports injury clinics. This is a further extension of the scheme introduced last year by the Government. An important amendment was presented to the Dáil literally in the last five minutes of the final stage of the debate on the relevant Bill, thus creating a tax shelter of enormous importance to benefit the promoters of a private hospital. It is ironic that today's additional reliefs for private hospital schemes will probably cost the taxpayer many more millions in tax forgone.

Last year, the legislation denied relief to all investors in a private hospital scheme where any of them fell into an excluded category. The Minister spoke at great length last year — Deputies will recall the debate — on why this was critically important in the limiting of tax avoidance. Section 24 of the Finance Bill 2004 will deny the relief only to the excluded person or persons, thus turning the Minister's contributions of last year on their head. The other investors in the scheme can benefit whereas they were prevented from doing so previously. This is a very significant break for private hospitals and sports clinics at a time when €105 million was spent on a state-of-the-art accident and emergency unit in Blanchardstown hospital in my constituency, which cannot be opened although there is a Third World accident and emergency unit next door. We know that last year the scheme was to benefit a constituent of the Minister. What is the reason for the further extension of this already generous scheme this year? The Dáil and the public are entitled to know.

On section 25 of the Finance Bill 2004, the budget ordained that in the case of hotel and holiday camp capital allowances, planning permission had to be acquired by 31 May 2003 to avail of the relief. However, the relief has been extended in cases where a building has been delisted or is not subject to the Planning and Development Act 2000. Deputies should note this wording because it is very strange. The building will qualify for the relief where 5% of the expenditure was incurred before 31 December 2004. Was this section the subject of representations to the Minister? It is highly technical and reads as if it were to benefit a particular case. It is a case of a delisted building being refurbished and now being allowed to qualify for certain reliefs. Will the Minister explain his thinking on this?

We now have lower tax rates and there is no excuse for any person, particularly someone who is well off, not paying his or her fair share of tax. The Minister and the Taoiseach have indicated on more than one occasion that they share this view, yet the small print of the Finance Bill indicates that the reality is otherwise. Any of us could draw up capping measures to make the system more fair but this Bill is silent on any kinds of capping measures concerning the amount, time limit, or qualifying criteria that would limit bonanza tax breaks that are almost exclusively for the very well-off.

The Labour Party is strongly in favour of promoting research and development as vital to the building of a knowledge economy. However, there are some important issues concerning the Minister's proposals to be examined. His favourite child, the national pension reserve fund, now invests world-wide in companies as diverse as Imperial Tobacco, Philip Morris and Halliburton. During his recent appearance before the Oireachtas Joint Committee on Finance and the Public Service, the chairman of the National Pension Reserve Fund Commission was exceptionally proud of the fact that there was no ethical dimension to the fund, which amounts to billions of euro invested world-wide on behalf of the Irish people. He spoke about a miserable €200 million reserved by the trustee for investment in public private partnerships in Ireland. This is a derisory amount in the context of the overall funds available.

What is the Minister for Finance's vision for investing in infrastructure, science and technology in Ireland? The measures included in section 33 of the Bill to support research and development are very modest compared with the investments of the national pension reserve fund world-wide or the property-based tax breaks to which I referred. How effective will section 33 be in promoting existing and new research and development, including in our universities, third level institutions and other research institutions?

Will certain tax breaks, particularly on building construction for research and development purposes, be more of the same property-based tax breaks and will they do very little to promote real research and development? In particular, why is there no verification or certification system for research and development, as now properly applies to film relief, to ensure there is no abuse of this relief and that we have genuine additionality in respect of investing in research and development.

The original section 765 of the Taxes Consolidation Act enabled companies to avail of the normal capital allowances and wear-and-tear reliefs where capital investments were made for the purposes of qualifying research and development activity. The Finance Bill 2004 allows extremely generous tax reliefs for the construction or refurbishment of buildings to house research and development activities. This significant expenditure can be written off over four years. There is no claw-back of relief where the building is sold or its use is changed after ten years. Therefore, the timespan is unusually short. Industrial buildings are generally written off for as much as 25 years for tax purposes. This, again, represents a potential bonanza for research and development construction, which is essentially about property-based investment rather than genuinely carrying out and supporting scientific research and development, which is what all the parties in this House wish to see us supporting.

The minimum threshold of €50,000 is welcome as it will help avoid the problem of incidental activity qualifying for the relief. However, why limit the amount of qualifying expenditure paid to universities to 5% of the amount invested? As the Minister knows, there is extremely important research and development taking place on the part of some of our universities and their related campus companies, particularly in the fields of pharmaceuticals and medical development. Will the Minister explain his thinking in this area?

It would be preferable if there were a certification system. Such certification is required in respect of film investment relief, which falls under section 481. The original section 766, which dealt with research and development tax incentives, provided for certification by Forbairt. A critical point is that the artificial tax avoidance industry lobbied the Minister to allow this new relief to be self-assessed. It was argued by the artificial tax avoidance industry that the original section 766 was not taken up due the certification process. However, the lack of take-up reflected the relatively minor nature of the relief then provided and the fact that the attraction of research and development activity to Ireland was not top of our industrial agenda at the time.

We are now positioning ourselves further up the value chain economically and industrially and the proposed relief is very generous. Surely genuine research and development activity will qualify so why object to a qualification or certification process? The vague references in the Minister's speech today to having his colleague in the Department of Enterprise, Trade and Employment look at it are not good enough. I do not accept the argument that proper certification will delay research and development investment decisions. I have never heard a film maker or studio complain about the time it takes to have a film agreed for section 481. It takes two or three weeks to consider an artistic exemption application. Is this time requirement excessive where one is providing tax breaks to build or refurbish a home for research and development? How long does it take a multinational company to decide where it will locate its research and development operation and recruit its staff? It must be remembered that the relief as set out by the Minister, much to the disappointment of many industries in Ireland, is an incremental relief.

Section 35 details new provisions on the leasing of assets. Leasing has been treated for tax purposes with the bank buying the asset claiming the tax allowances and being allowed to claim a tax deduction for the purchase price of the asset over eight years. The company, usually on a lease, buys the asset over three to five years. Up to now the banks paid tax based on total receipts, including the capital and interest element, minus the capital allowance element. The new provision will mean that only the interest element of the bank's income will be taxed. It will not be subject to the capital allowance regime. Therefore, the bank effectively writes the asset off over the period of the lease, that is over three to five years.

It is surprising the new leasing provisions appear to have gone unnoticed by the media. The explanatory memorandum correctly notes that the total tax take will be the same. This is true, but the time taken to collect that tax could be doubled, and everyone knows that time is money. Effectively the banks will get an accelerated receipt of their tax breaks in this case. The banks will welcome this provision. It is surprising they have not made a statement. Possibly they fear that welcoming a provision at Bill stage could cause it to be revoked once it has been examined.

There is another even more significant aspect of this provision. This is the second time the Minister has allowed accounting practice to determine tax practice. The first such occasion was in respect of the tax treatment of public private partnership agreements. Accounting treatments are generally quicker to recognise costs, as the Minister and I know from past experience, and slower to recognise income, reducing the declared income and therefore the tax take. Second, tax rules often disallow certain expenses which are recognised by accounting rules. Again, the tax take to the Exchequer is reduced. This latter development is very much in evidence in the PPP rules. Revenue has traditionally resisted attempts by accountants to have accounting rules determine tax treatment. There is a very famous case in the UK where Lord Denning said that accountants, no matter how eminent, should not be allowed decide tax law. I agree with him, and the Government should explain this further break for the banks in this Bill.

Revenue is very busy with major investigations which are yielding significant amounts of money. We have not heard yet what has happened regarding a number of banks which are in negotiation with Revenue, nor have we heard about the many hundreds of thousands of accounts not just overseas but in Northern Ireland.Iris Oifigiúil shows a significant number of investigations leading to significant amounts of tax being recovered. It stands to reason that if someone opens an offshore account it is generally not for a legitimate reason. The investigation of the sources of the money lodged to such accounts is providing Revenue with a significant return on its investment and should be encouraged because it more than pays for itself.

Having regard to their resources, the Revenue Commissioners are wise to focus on cases where there is a significant likelihood of a return rather than on random audits. However, where we have a self-assessment system for the self-employed, for partnerships and for small business and company accounts, a tiny number of audits is carried out. This is wholly inadequate. Over the past three years, no more than about 16,000 audits a year were carried out. The Comptroller and Auditor General in his report noted that 50% of the audits carried out resulted in a significant return of additional taxation to the Exchequer. Why can more tax audits not be carried out to ensure that it is not just the PAYE sector who are compliant because they are in an enforced structure but that people in the self-assessment sector are also checked routinely to ensure that they are paying their fair share.

Some years ago the Minister spoke disparagingly, dismissively and insultingly about what he described as the poverty industry. There is little doubt as to what industry the Government actively supports, that is, the wholly anti-social artificial tax avoidance industry. Needless to remark, the Finance Bill is entirely silent on the subject of the taxation of the bloodstock industry and on the position of the offshore status of many of Ireland's super-rich who, while non-resident for tax purposes, still seem able to attend every race meeting and sporting event in the country. The "Cinderella rule", whereby in addition to the number of days they are allowed to spend in Ireland they are also allowed unlimited days in the country provided they are gone by midnight, makes a nonsense of the notion that many of these people are genuinely non-resident for tax purposes. They must choose between being resident and paying their fair share of taxes like the rest of us and getting non-residency benefits. It is interesting that in the United States the obligation to pay taxes is based on citizenship, not on residency. I am surprised that in the Revenue powers group review no attention has been paid to this fundamental abuse which is undermining the confidence of ordinary taxpayers who pay their fair share of tax.

In this year's Finance Bill there is no reference to closing off schemes such as that relating to the Onassis yacht which is cruising around the Mediterranean and will never sail in Irish waters but which allows a consortium of Irish investors to make a killing in tax breaks on the backs of compliant PAYE taxpayers. The Minister has nothing to say about such scandals. The Minister proposes in the Finance Bill to put severe limitations on pension entitlements for groups such as teachers, but on the yacht Onassis he has nothing to say. When speaking about fairness and equity, we cannot tell teachers and public servants that we are going to change their conditions but we are going to look at the tax breaks for the super-rich. During the year I raised questions about management companies being formed and then liquidated. In a reply the Minister indicated that there was concern about such schemes causing unnecessary losses to the Exchequer, but there is not a word about such schemes being closed off.

There are questions to be answered by the Minister as to why, at a time when so many PAYE taxpayers are so hard-pressed, he is so exceptionally generous to the wealthy in society.

I want to go back to the first three sections of the Bill which deal with the tax burden on ordinary PAYE workers. The Minister referred to section 3 which deals with the minimum wage. Although it has been introduced, the Minister has made no attempt in this Bill or in his budget speech to address the anomalies that have developed regarding PRSI. It had been widely indicated that he might seek to reform the PRSI system.

Regarding people at the lower end of the salary scale, I reiterate that, with the structure the Minister has created, there are examples of a lone parent in receipt of an allowance, working part-time and paying child care costs. As a result of the structure created by the Minister, such a lone parent is now likely to be refused a medical card. If one or two of her — and it is usually a "she" — children has an asthmatic condition, for example, she must make a choice between continuing at work and leaving her employment or reducing her income to qualify for a medical card. Contrast that with how cosy and sweet the Minister has kept the super-rich who are "non-resident" in this country and yet are here every day. If that is fairness, the founders of Fianna Fáil would turn in their collective graves.

To introduce a budget is not the easiest or most popular of tasks. The Minister has managed to some extent to become popular with the decentralisation lobby. It was the most popular side of the budget. I do not know whether on the financial side he has failed or succeeded. It certainly was seen as a neutral budget.

The job of taking money from people and giving it to others without either group noticing is a fine art. I think the Minister has cracked that almost to the point where I could shortly see him giving lectures at the Fagin school of economics. People do not realise the money is gone. It has gone silently and swiftly. They put their hand in their pockets only to find that they are empty. The Minister has managed to become expert at this. The light-fingered approach will ensure that at least 35% of all taxpayers will find themselves on the super-tax rate. This sends a clear signal that the Minister has abandoned hope of achieving his policy of having just 20% on that rate. How could this so-called reform of the tax system be said to be equitable when the super-rich and famous like Bono, Sir Anthony O'Reilly and Michael O'Leary are taxed at the same rate as middle income PRSI workers?

Some 30 of the 400 top earners in the country pay no tax. They are sheltered by schemes or in tax havens. If they approach their local community welfare officer and show receipts of less than €10,000 per annum, they can successfully apply for a medical card. I have spoken to community welfare officers who have described how people pull up in their jeeps with 04 registration plates and come in to apply for medical cards. They have tans and may be coming back from their second world cruise or whatever. I do not think this is acceptable. The same people can also have free third level education for their children. We have such a system. Many high income earners know how to play the system and when to make investments so that they appear to be making only €10,000 or €12,000 in net profits annually. There is something wrong when this is allowed to continue.

Freezing the standard tax bands at the current rate has ensured another 63,000 are brought into the super-tax net. That hits people where it hurts. These people on PAYE all pay at the same rate as the super-tax people and find it difficult.

As regards cigarettes, the 25 cent increase the Minister put on a packet is being cynical. It may have sparked conflict between the Minister and his colleague, the Minister for Health and Education, Deputy Martin, who wants people to quit smoking. He knows the strain it is putting on the health system and the hospitals.

And the State.

This increase is not designed to get people to stop smoking. We know the Minister needs the money from the cigarettes. When the smoking ban comes into effect in pubs and public places, there will be a €75 million shortfall in the budget. This measure of the Minister's is designed to bring €60.9 million into the Government's coffers. The fact is that 75% of the price of every packet of cigarettes goes directly to the Exchequer. If we keep going as we are in terms of increased cigarette prices, I foresee a budget in which the price will be reduced because of the law of diminishing returns and people will have quit smoking. There will then be major concern as to where the money will come from.

There was a 50 cent increase in the price of a packet of cigarettes in the previous budget and that encouraged people to stop smoking. The Government must send out either of two messages: that it wants people to continue or to stop smoking. It is rather confusing. The 25 cent increase is not designed to make people quit smoking. Perhaps there is a hidden agenda for people who continue to smoke in that they will die younger and save a fortune on pensions. That could well be it. It is one way of doing it.

As with last year's additional 1% VAT increase, the Minister has his hand in the pockets of every man, woman and child in the State. He heaps surcharges upon charges. He has introduced increases in fees, television licences and road taxes. One has only to go to Spain, Portugal or any EU member state to see that the cost of living there is so much less. It is becoming quite expensive to live here.

On behalf of the Irish left, I welcome the Minister for Finance, Deputy McCreevy, to the debate. I hope he listens carefully to our views.

On examining the Bill, one can see that the legislation deals specifically with income, corporation and capital gains taxes. For most citizens tax is the key issue for the efficient running of our society. The Bill should be concerned with tax equity and the rights of our people. Sadly, once again, working people pay the most all the time. We have a long road to travel before taxpayers receive fair play and justice.

In the budget, with all the massive wealth available and the increased revenue, there was an opportunity to do something sensible, especially for the most needy and working people. The Government did not take the opportunity to go the whole way and take a bold step towards a fairer and more humane society. While I welcome some positive aspects of the budget, I strongly disagree with the drift towards a more self-centred society. When dealing with budget matters it is essential to examine carefully the economic situation that exists for many people in 2004. While I recognise that many benefits have been seen from the economic boom, a substantial minority is being left behind in terms of income, low wages and poverty. We must also examine these real issues.

There are now 29,017 people on hospital waiting lists, 49,000 households on housing waiting lists, 5,581 homeless people and €57 million owed by families to moneylenders while 63% of the top earners pay tax at less than 10% because of different loopholes and reliefs. We have seen cuts in home help while some health boards have a €15 million surplus. People with intellectual disabilities are on waiting lists and there is the scandal of 70,000 children still living in poverty in 2004. These are the real issues that must be linked into this debate on the Bill. It should be concerned with distributing resources in an equitable way, social and economic rights and, above all, sharing the wealth of this nation. However, it is not and the reality for many people is patients on trolleys, homelessness, poverty and the absence of social justice.

The Minister for Finance, Deputy McCreevy, appears worried about what the Irish left would do if he left the political pitch. Such action would be celebrated by Independents and members of the Technical Group. The Minister is under the impression that the Irish left is always looking for its share of the cake, the national finances, so as to provide for the weaker sections of society. He is partially correct. We are not just looking for our share of the cake; we want to run the bakery in the interests of working people and the less well-off. The Minister had best watch out.

Part of economic planning in any country is an equal and fair tax system. I want to deal head-on with the constant myth that the Government is taking care of the elderly. Let us look at the facts and reality in 2004. Some 440,000 people, or 11% of our population, are over 65 years of age. Approximately 266,000 of them are over 70 years of age, one third of whom live alone. Some 25,000 elderly people are in long-stay beds in nursing homes and a further 13,000 needing high maximum dependency care continue to live at home.

The vast majority of elderly people would like to receive care at home or in the local community. Many of their families have made major sacrifices to do so. However, cuts in the home help scheme have seriously limited the adequacy of the service. The Government has failed to establish or fund local day care centres for elderly people in disadvantaged communities. I received a telephone call this morning from a constituent informing me that the Irish Wheelchair Association is laying-off people this week. That organisation provides a service for people with physical disabilities.

I do not accept there are not enough resources left to take care of the elderly. Budget 2003 was not a good budget for the less well-off and it is not a caring budget. We need to do something radical for the poorer sections of our community and we need to move forward.

The Minister for Finance, on budget day, introduced one of the shortest budget speeches on record. He has followed that with a Finance Bill characterised by virtual stealth in comparison to previous ones. One could argue that is worth doing and that the Minister might be undertaking the principles of sustainability by producing less material but, unfortunately, it is also a sign of a Minister who has run out of things to say and is indulging in acts of more of the same. The Minister might argue, "If it is not broke, do not fix it". I would prefer to liken him to a recording artist who, instead of producing new material, relies on regurgitated greatest hits — hits that do not give added pleasure.

I will now list those hits from which the Minister can take whatever level of pride he wishes. The Finance Bill fails to increase personal tax credits. There is a continued heavy reliance on stealth taxes and an incompatibility to heavy levies and taxes on people trying to acquire property for housing purposes while at the same time a plethora of existing and new added tax incentives provide for the acquisition of property by developers and speculators. That is at the heart of the fiscal policy introduced by the Minister in several budgets.

The Bill makes no attempt to introduce measures to tackle areas of inconsistency, such as taxing the bloodstock industry or dealing with issues of residency and tax liability, a simple measure to ensure money earned here is taxed here. It does not deal with the fact that people are jetting in and out, often unregulated, in private aircraft and pretending to live outside the State when in fact they spend the vast majority of their time here.

The Minister has not only intensified the use of property tax incentives but has added to them in terms of private hospitals, nursing homes, sports injury clinics and has failed to provide any rationale for the economic purpose of these measures. At the same time, he ignores the very real social danger in adding fuel to measures which increase inequality in society. Many of the new tax incentives are contradictory in terms of how the health service is funded and managed. Others, about which I will speak later, intensify the inequality between individual taxpayers.

The Minister speaks with pride of the 35% of income earners who pay no tax, this being a rising percentage of the taxpayers or wage earners outside the tax net. However, he fails to mention that among them are those within the top 10% of income earners in Ireland, people who pay no tax whatever despite having incomes that far exceed those of many in our society. Not only is that not being tackled but what is being proposed in the Bill intensifies many of those inequalities.

The Minister was responsible for engineering a series of welfare cuts which, following the end of year Exchequer returns, now look obscene. There was no reason to introduce the cuts or for sustaining them. The community and voluntary pillar indicated it secured a commitment from Government that these cuts will be reviewed. What is that commitment? Will the changes be immediate if they are seen as having a serious effect in this fiscal year or will we have to wait until budget 2005 for the Government to realise the real damage we, as an Opposition, believe these cuts are doing, even though some have only been in place for a number of weeks?

The Bill makes great play of the powers being given to the Revenue Commissioners just as the budget speech made great play of the Government's decentralisation programme which is running into problems. We have not heard from the Minister if he will provide extra resources to effect these powers. Difficulties have arisen with the Revenue Commissioners in the past in terms of their power to bring in extra money for the Exchequer. The Revenue Commissioners are not prosecuting anyone for the improper use of the 1993 tax amnesty. General tax law has a moratorium of ten years. Perhaps the Minister will clarify if that is true. My understanding is that once ten years have elapsed, people cannot be prosecuted for this type of tax offence. People who might have made improper use of the amnesty continue to rip off the State despite the fact that the amnesty, introduced by the Taoiseach, when Minister for Finance, provided for very stiff penalties, most of which have never been levied.

That legislation also barred Revenue from any access to information about those availing of the amnesty, a double barrier to getting full benefit and information from it. When the Minister makes play of the fact that Revenue will receive additional powers, we must make constant reference to the fact that previous Government decisions, largely made by those still in Government, cannot be properly policed by the Revenue Commissioners on foot of existing powers. There is little confidence that those powers, if being added to, will be properly resourced.

As Green Party spokesperson on finance, I welcomed the tax credits for research and development. Unfortunately, the manner in which the incentive is being introduced in the Bill will counteract that effect. It will benefit large and not small companies. Ireland, and its economy, needs to develop enterprises in the small and medium-sized sector. We need to wean ourselves from a reliance on multinational investment. Research and development tax incentives of the type provided for, if properly structured, can assist us in doing so. The low rates of personal taxation referred to by the Minister and the Government are mythologised in many ways. The low rates of corporation tax are not the lowest of effective tax paid by corporations throughout Europe. Other European countries have large-scale, focused research and development tax credits and allowances. Ireland is only lately getting into this and is doing so in all the wrong ways.

I hope the Minister will accept amendments on Committee Stage. A glaring anomaly has been highlighted whereby the tax break geared towards research and development may end up being another property-based tax relief for many people who do not need it. The cost to the State of tax foregone on existing property-based tax reliefs to date is €3.8 billion, which is the equivalent of the annual expenditure of several Departments, yet the legislation provides additional measures to benefit those who already benefit too much from a generous taxation system and whose income is far higher than the national average.

The Minister's only reference to environmental measures concerns an incentive for the use of biofuels in experimental activities. This describes the Government's tentative approach to fiscal policy, green taxation and green incentive measures. Widespread encouragement of the use of biofuels would have a spin-off effect in the agricultural sector, which the Minister of State should encourage, yet the Government is ignoring its responsibilities in terms of carbon taxation. Deputy Richard Bruton is correct that we have responsibilities to implement measures to reduce greenhouse gas emissions. This needs to be done by ensuring that those who generate emissions pay for them. Suitable measures should be put in place to ensure welfare payments are increased and money is directly given to businesses and households to improve energy efficiency and to ensure that needless energy and environmental costs are controlled.

The legislation is a disappointment. It is more of the same from a Minister who has nothing to say in this area. I hope this burden will soon be removed from him.

The legislation that should be before us is a Finance Bill which provides for real tax reform, real equity in the distribution and management of national wealth and real delivery for people in their daily lives. Instead we have the implementation of the threadbare 2004 budget, the seventh budget of inequality presented by the Minister for Finance

Although the Minister gave no indication in his budget speech that this could well be his last Finance Bill, a Cabinet reshuffle has been signalled for June this year — I am sure the Minister of State, Deputy Parlon, is waiting with bated breath — after the people, rightly, punish Fianna Fáil and the Progressive Democrats in the local and EU elections.

What punishment does the Deputy have in mind?

Where would Deputy O'Caoláin send the Minister? The Deputy should not be so meek of mind. He should say what he is thinking.

I wonder if the Minister has put money on his chances of remaining in Finance after June — perhaps he will put it on with Deputy Power. Will the prize go to the Progressive Democrats whose influence on Government policy seems to grow by the day? The Progressive Democrats Party is the ideological wing of Fianna Fáil and it has firmed up a working relationship with the Minister that may help him to continue in his role following the reshuffle.

When he delivered his first budget, the Minister, Deputy McCreevy, boldly described it as the first chapter in a book,The Book of McCreevy. He started off promising us great expectations but, if this is his last contribution, he is finishing up with what I can only regard as bleak house — that is if he is finished. Like previous budgets and Finance Bills, the legislation leaves our tax system unreformed and, yet again, the opportunity to make real progress has been spurned.

Few countries have seen the rate and extent of economic growth in Ireland over the past decade and few have seen that prosperity so ill-used, ill-planned and unfairly distributed. The Minister and his colleagues throw spending figures around this Chamber like confetti, but they cannot hide the fact that the rich-poor gap has widened since they took office almost seven years ago.

The country was in some mess then.

It certainly was in south Armagh.

The proportion of our population living on less than 50% of the average income has increased since 1997.

By how much has the average income increased? That is a horse of a different colour.

The Government's own national anti-poverty strategy recognises that almost 25% of children — 300,000 children — are living in poverty.

The Government does not see the taxation system as it should be seen, as a key resource of the people to help ensure the just distribution of the nation's wealth. This State has the lowest level of taxation as a percentage of gross domestic product of all EU member states, yet as a result of the budget, more than 50% of taxpayers pay at the higher income tax rate of 42%. They range from people on just above the average industrial wage to the highest paid people in the State.

The Revenue Commissioners 2002 survey showed that 18% of the top 400 earners in the State paid an effective tax rate of less than15%. We, therefore, have the worst of both worlds. Overall, the tax take is remarkably low by European standards, yet 25 years after the tax marches of 1979, the burden is still borne disproportionately by the ordinary PAYE worker, with those on average and below average pay faring worst. As a result of a low tax take overall, bad Government policy and gross mismanagement, we do not have the essential social services we need and could enjoy.

The average worker suffers as a result as he or she cannot afford private health care and bears the brunt of stealth taxes while the wealthiest earners, who have been allowed by the Government to escape their obligation to pay their fair share of tax, benefit. They enjoy the benefits of private health care and they reap the rewards of the battery of property-based tax shelters created by the Government and retained and extended in this legislation.

The retention and extension of these shelters is the most disgraceful aspect of the Bill. Developers of private hospitals, sports injuries clinics, hotels, holiday cottages and multi-storey car parks do not need tax breaks. The damning fact is that there is no estimate of the cost to the Exchequer of these and other tax reliefs which allow the wealthiest to avoid paying their fair share of tax.

There is also no estimate or analysis of the supposed benefit to the economy and to society of these bonuses to property owners, landlords and speculators, and naturally in the Government dominated by the Progressive Democrats ideology, there has been no evaluation of the option of direct State investment of these funds in projects that would be of real social and economic benefit to all. Massive sums lost to the Exchequer through these scams could be used to improve the lives of ordinary people throughout the State, but the Government's motto is "property before people".

The Minister's fondness for horses and stables is well known.

The Deputy and his colleagues are fairly fond of horses themselves.

Section 87 which gives more powers — there is that word again — to the Revenue Commissioners to deal with tax evasion through offshore bank accounts is a prime example of closing the stable door after the horse has bolted.

It was the anniversary of Shergar's disappearance earlier this week.

We will probably never know how much wealth was siphoned out of the economy in offshore bank accounts during the past decade. What is patently clear is that the unmasking of the DIRT and Ansbacher fraudsters has not altered the activities and values of the super-rich in Irish society. The Revenue Commissioners have given us the warning signs that massive tax fraud is still taking place as high earning individuals hide their income in offshore bank accounts.

In the construction industry.

It was disclosed early in 2003 that 254 Bank of Ireland customers with offshore accounts had settled unpaid tax bills with the Revenue Commissioners. The tax recovered amounted to €100 million. One individual paid €7.3 million in back taxes, while a further 27 paid between €1 million to €2 million. This is in addition to the €684 million already collected as a result of detection of DIRT tax fraud.

I do not know whether the Leas-Cheann Comhairle is able to pick up the continual alternative contributions in the House, but it is extremely disconcerting when one is trying to make a serious contribution to the debate. I ask for the Chair's assistance.

The money in question is also additional to the €26 million paid by Ansbacher account holders and the €47 million retrieved from the National Irish Bank-Clerical Medical International scheme.

A study by the international accountancy and consultancy firm KPMG found that over €4 billion had been lodged into the Isle of Man bank accounts of six Irish subsidiaries between 1998 and 1999. That is a colossal sum. In October last, the Revenue Commissioners notified Irish Life and Permanent that they were about to investigate the tax position of the 3,000 Irish account holders at the bank's Isle of Man subsidiary. A similar inquiry has yielded €100 million from the Bank of Ireland Jersey Trust account holders. How many more millions are being siphoned out of the Irish economy?

The confirmation in section 48 of the budget increases in the rates of excise duty on petrol, auto diesel and auto substitute fuel, which resulted in a five cent per litre hike, invites an appeal on behalf of the hard pressed motorist and the stretched margins of the haulage sector. It is time for a moratorium on increases in excise duties on mineral oils, allowing for a guaranteed stability in these critical areas over a period of at least three years or the remaining budgets of the McCreevy book, whichever is the longer. Perhaps the Minister of State will urge his colleague to take on board that request.

I listened with great interest to the previous speaker——

I thank the Deputy.

——who referred to the Minister, Deputy McCreevy, presenting last year's Finance Bill to the House and stated that the Government will be punished. I hope he is not advising the country to use the sort of punishment with which his party is normally associated.

Good man, stick to the point as always.

He proceeded to talk about closing the stable door after the horse has bolted. I understand that this is the anniversary of the disappearance of a horse a number of years ago. The Deputy disappointed me; I thought he had something in store for us but, unfortunately, it was not forthcoming.

Perhaps the Deputy will dig him up.

The position of Minister for Finance and criticism go hand in hand. We have with us a former Minister for Finance who is no stranger to criticism. However, no Minister for Finance has endured the same level of criticism as the current holder of the office, the Minister, Deputy McCreevy. When history is written he will go down as one of the best Ministers for Finance we have ever had. He has been a reforming Minister. He had a clear vision of the country's needs and set about implementing the policies to meet those needs.

It has been argued that many of the Minister's policies benefited the rich and neglected the poor. Nothing could be further from the truth. One can have all the policies in the world but if one does not create the wealth, one cannot distribute it. The Government succeeded in creating a climate in which people were prepared to invest and take risks. There was a realisation that profit was no longer a dirty word. It has taken a long period for some Members of the House to accept this fact. However, it is obvious that the policy of low taxation has created the environment which facilitated the tremendous growth in our economy in recent years.

One measure that has received most criticism was the decision to reduce capital gains tax in the budget of 1998. At that stage, the Minister reduced the rate from 40% to 20%. Not alone did that measure dramatically increase activity, the return to the Exchequer increased beyond anyone's wildest dreams. It is important to consider some of the figures. The return from capital gains tax in 1994 was €59 million. In 1996 it had reached €106 million. In 1998, when the Minister reduced the rate, the return amounted to €245 million. In 2000, the figure increased to €774 million. The indications are that for last year the return will be over €1.44 billion. There are certain people present who are more interested in perception than reality. Any measure which could achieve such a result must be acknowledge and the Minister must be saluted for taking such a brave decision, despite the severe criticism he received from many quarters.

Real leadership and government are about making the right, not the popular, decision. For some, perception has become more important than reality. The Progressive Democrats and Fianna Fáil have enjoyed an unusually long term in Government. I hope that the current term will be equally long.

It feels very long already.

When a Government is committed to a full term in office, it provides it with a better opportunity to make the right decisions. The long term becomes the priority and there is certainly not the same temptation to implement policies for short-term gain.

We can be proud of the way the Government has handled our finances since it came to office in 1997. The boom has brought a huge increase in Government receipts and this money has been prudently managed. We have seen increases in social welfare way above the level of inflation, proper provision for our future pension needs and significant investment in health, education and infrastructure. I do not want to pretend that everything in these areas is perfect or that they are receiving adequate funding. However, we have identified our priorities and we are dealing with them accordingly.

The elderly were not forgotten. We made a promise when we entered office in 1997 to the effect that during the lifetime of the Government we would increase old age pensions to £100. People stated that this would not be possible but it was achieved well before the Government left office. Since 1997, old age pensions have increased by more than 50%.

Carer's allowance is another area in respect of which progress has been made. I accept that a great deal more needs to be done and I will comment on that later. However, in 1997 there were 9,200 people in receipt of carer's allowance. By 2002, this had increased to 18,700. We have made tremendous progress in a number of areas and I accept that a lot more needs to be done.

A number of measures taken by the Government have greatly improved the position of older people. While many of these individuals acknowledge and appreciate the progress that has been made, much more needs to be done. Our population is growing older and while that places financial and economic pressures on Government, it is vital that we continue to develop services for older people. The nursing home subvention scheme, which was introduced in 1993 with a budget of £5 million, has increased significantly over the years and I understand that approximately €114 million will be spent in that area this year.

Many patients are staying in our hospitals much longer than is necessary because they have no one at home to provide the necessary care. Huge benefit would be derived if some of the money currently being spent in the health area was transferred to the carer's allowance scheme. People would spend less time in hospital, beds would be freed up and the cost to the State would be reduced. When people reach a certain level of recovery they are much happier in their own beds. The idea of the carer's allowance is an excellent one, but the qualifying criteria are too restrictive. Many people throughout the country are doing excellent work in providing this service but are not entitled to the allowance. The scheme needs to be expanded.

Recently, I read with interest that Ireland is the only member of the EU which will offer full welfare benefits to the people of the ten countries which will join the EU on 1 May. The Ministers for Social and Family Affairs and Enterprise, Trade and Employment have expressed a desire to provide full information to the entrants and to explain clearly what their entitlements are, should they decide to come to Ireland. While this approach is commendable, one must ask why we feel it necessary to be the only current member of the European Union to offer full welfare benefits to citizens of the accession countries. Our unemployment rate, at 4.6%, is much lower than that of any of the applicant countries and our welfare benefits are greater. The minimum welfare benefit in Ireland is almost €135 while Estonia provides approximately €6.50, the Czech Republic pays almost double that and Lithuania approximately €20. The ten applicant countries apply a limit to the length of time a person may claim benefit while Ireland places no limit. I ask the Minister for Social and Family Affairs to keep a close watch on this development, which could be open to abuse. It is important that the scarce funds in her Department are managed prudently.

It is important for us to be good Europeans and I am conscious of our current position as holders of the Presidency. However, do we have to be so generous in comparison to our colleagues who are not prepared to offer the same entitlements? Money is scarce in the Department of Social and Family Affairs. It is not long since the Minister announced a number of changes, including a change in the qualifying criteria for rent subsidy. Until now a single mother in receipt of social welfare who had not been housed by the local authority, for example, could find suitable accommodation and a rent subsidy would be paid. Now such a person will have to wait six months before the subsidy is paid. While the Minister has explained that the system was intended as a short-term measure and was never intended to be a long-term one, this will cause hardship in certain areas. It is difficult to understand how we can be so generous in offering benefits to people from accession countries while cutting benefits at home and causing difficulties for people.

Waste management is one of the biggest problems facing the country. Attitudes to waste are changing and I compliment schools, particularly national schools, on their imagination and initiative in making pupils aware of waste and how it should be dealt with. It is refreshing to see green flags flying outside so many of our national schools. I hope we will see more of them. Many schools use imaginative ideas in explaining to children that the old method of simply throwing waste in a bin is no longer acceptable and pupils now think twice before they throw litter away in that fashion. They are encouraged to recycle, reuse and look at alternative ways of using waste. If we can instil a proper attitude to waste into young people it will stay with them forever. Unfortunately, it is more difficult to persuade adults to change old habits, but this must be done.

The Minister for the Environment, Heritage and Local Government has taken a number of measures to deal with this problem. He has provided funds for local authorities which encourage recycling. I acknowledge the tremendous effort being made by some local authorities in this regard. Unfortunately, too many others have taken a lethargic approach to this issue. The provision by a local authority of one bin per household is no longer acceptable. Many people who are paying for a bin feel that they are not getting value for money if it is not full or overflowing. Paying by weight is the only way to make people see the necessity to minimise their waste.

At present people have no incentive to change their old habits. Waste management costs money but it costs more if it is not properly handled. That message must be spelt out loud and clear throughout the country. We must provide advice to businesses and householders on how to manage waste more efficiently and more effectively. I acknowledge the role of the Chambers of Commerce of Ireland and the wonderful work they are doing in this area. They take this matter very seriously and their efforts are having tremendous success. I wish them well. I know the Minister has been supportive of the chambers in this regard.

The issue of one-off rural houses has been discussed frequently in this House and elsewhere. Until recently an applicant for planning permission who could comply with the county development plan for his or her area was almost certain to be granted planning permission. That, unfortunately, is no longer the case. County development plans and strategic planning guidelines do not always marry well. If an application does not meet the criteria of the county development plan, it does not succeed and if it does not meet the criteria of the strategic planning guidelines, it will not be successful either.

We have also seen the intervention of An Taisce, which has objected to one-off rural houses. The Joint Committee on the Environment and Local Government has dealt with this issue and has heard a number of interested bodies, including officials of the Department and members of An Taisce. We should not lose sight of the good work done by An Taisce throughout the country. Moreover, when these cases are appealed, it is not An Taisce which makes the final decision, but An Bord Pleanála.

I encountered a case recently of a farmer with 300 acres who had never sold a site. His daughter was the first in his family to apply for planning permission and her application was turned down by An Bord Pleanála. Surely on a holding of 300 acres, a family member would be entitled to build a small house.

Even a big house.

There is something wrong if that cannot happen. The Minister gave us an undertaking late last year that he would deal with the issue and make a statement on it. That statement cannot come quickly enough. This is a very grey area and needs to be cleared up. I hope the Minister's statement can do that. Whether guidelines are sufficient or not, I am not sure, but it is an issue causing much difficulty, particularly for young couples throughout the country. If people are prepared to help themselves, it is important that the State provide whatever assistance it can, rather than putting obstacles in their way. The situation has not got any easier. The first-time buyer's grant was abolished. In many local authority areas, the levies will also be substantially increased in the near future. Apart from acquiring a site, all this makes the cost of building so much greater. I hope we can encourage young people and make it a little easier than it has been in recent times for them to build houses.

Decentralisation was mentioned earlier. I congratulate the Government for the way the matter was dealt with. Many of us waiting for an announcement felt it was long overdue, but a proper balance was finally struck and it was a vote of confidence in rural Ireland. All counties will benefit as a result. The decision was very well received and any town lucky enough to be included would be very appreciative and look forward to the reality of decentralisation.

I congratulate the Minister on presenting another very successful budget and hopefully a successful Finance Bill. At the press conference, George Lee showed some interest in where the Minister's future may lie and whether that is in Europe or in Merrion Street for another few years, I wish him well.

As Deputy Richard Bruton pointed out in his initial contribution on this debate on behalf of Fine Gael, one of the key criteria for judging this Bill is its impact on the competitiveness of the country. This Government tends to confuse being ostensibly pro-business with what is actually good for the competitiveness of business in Ireland. All sorts of special tax reliefs, including ones which are completely useless and unused, are preserved and enhanced in this Bill so that Ministers can reassure their so-called business supporters that they are on their side and looking after what they are looking for. However, the sort of business that many of these beneficiaries of the Finance Bill tax reliefs are involved in concerns creating, protecting and exploiting a monopolistic niche in some corner of a market, rather than in making Ireland as a nation truly competitive. These tax reliefs are mainly for the benefit of people who are involved in defensive rent-seeking, an approach to business that is encouraged by this Bill,rather than the expansionist outward-looking approach to business which is what this country needs.

Let us look at what is being done by the competition Ireland faces in the enlarged EU. Slovakia, for example, is introducing an across the board 19% flat tax, a 19% maximum tax rate on income, a maximum 19% tax on capital gains, a maximum 19% tax on corporations and a maximum 19% value-added tax applied across the board on all goods and services sold in Slovakia. That is a simple, easily collectible and easily calculable tax, at a rate so low that there will be no incentives to evade or avoid it, and no incentives to pay expensive accountants to find ways around it, because a person doing business in Slovakia will be guaranteed to keep more than four fifths of the fruit of his or her work and pay less than one fifth in revenue. That tax will put tax lawyers, tax accountants and all that elaborate crust of expensive advisers who feed off the efforts of others out of business in Slovakia. The considerable talents of those people will thus be diverted to something more productive than finding gaps in tax conditions contained in legislation such as that before us.

That is what our competitors in Slovakia are doing. Deputy Seán Power, who has just left the House, worries about what some Slovak immigrants might claim in welfare benefits if they come to work temporarily in Ireland. He should divert his attention more to what the Slovak Government is doing to grow business in Slovakia by simplifying the tax system. The Deputy might bear in mind that this is the real competition we will face in the European market for goods, services and investment which opens up on 1 May next. The Slovak tax scheme is borrowed directly from Ireland, from the Irish Commission on Taxation which reported to this House in the 1980s and which as a House we collectively ignored. I recognise that having given guarantees that we will hold our 12.5% corporation tax rate at its current level for a 15-year period, we cannot drop it and go for a 19% rate, but we should ask ourselves how the Slovaks can do what they are doing, giving that comparatively speaking, their country is poor. How can they afford to have a maximum tax rate of 19% and still pay for the services they provide, in an economy that was previously socialised, while we have rates that on certain activities are so much higher? How can we match such competition? That is the question we must ask ourselves.

As a House, we should revisit the reports of the Commission on Taxation, reports that may well have been ahead of their time in terms of political practicality, and see if we should now undertake a comprehensive reform of our tax system along the lines of the commission's report in order to eliminate all the distortions, shelters and unnecessary cost centres built into our present tax system. This job cannot be done by one party in Government, or even two parties in Government, on their own. We need as near as possible an all-party approach to tax reform, so that reforms initiated by one Government will not be reversed simply for the sake of doing something different by a Government that succeeds it. One of the key reasons for Ireland's success over the last 40 years has been the fact that neither Fianna Fáil nor Fine Gael has in general shown an ideological tendency on succeeding one another in office to reverse workable schemes introduced by the other. I regret I am addressing my friend in the Chair, Deputy Sherlock, in saying this, because he is a man I admire and like. However, those who might like to introduce left-right politics in Ireland, when everyone else in Europe is abandoning it, should reflect on what our unusual centre-centre alternate politics has given to this country, which is continuity.

Continuity, for example, wherein a Fianna Fáil Government took over the export sales relief introduced by the late Deputy Gerard Sweetman in 1956, implemented it and made it the foundation of the recovery in the economy for which Seán Lemass deservedly gets much of the credit; a Fine Gael-Labour Government that in turn took over the 10% tax rate introduced by the former Deputy Des O'Malley, as a Fianna Fáil Minister, and implemented it; and a Fianna Fáil Government, taking office in 1987, which took over a 12.5% corporation tax rate, initiated by the rainbow Government, and implemented it. As far as business taxation is concerned, we have had a welcome absence of ideology in the way we have approached it. That has been to the benefit of the country and it has made Ireland a stable place in which to invest. That is why I suggest that if we are to undertake any wider reform of the tax system, it should be something we should at least consider on an all-party basis.

I now turn to a number of other matters. Section 16 concerns retirement benefits. For demographic reasons it is important to encourage later retirement, but later retirement will only work if we recognise the physical and biological reality that as people get older, they may want to move to fewer rather than more stressful positions. A pension scheme that is based on final salary encourages people to get into and remain in the most stressful job they will ever hold in their career up to the age of retirement. If they were to accept a less stressful and hence less well paid job, they would lose pension entitlement, perhaps for a 40 year period during which they will be retired having left work, and nobody will do that.

If we want to encourage people to stay at work we should contemplate basing pension either on average salary throughout career or on a fraction of the highest salary attained for a given period during career rather than on final salary at time of retirement. If we want to encourage people to stay, we must change the system to allow for the fact that perhaps people are at their peak of effectiveness not at the age of 65 when they will retire, but perhaps at the age of 50. They will be rising to that peak as they move up to 50 and then perhaps declining gently and with dignity from it thereafter.

I would like to raise a number of other points. I want to refer to the issue of demography, which underlies the need to examine the way we structure retirement. We should recognise that our system of tax on property is the most anti-youth system of tax on property one could possibly design because at the point where a young person is trying to acquire their first position on the property ladder, we ask them to pay stamp duty and value added tax on a new house, and we are now asking them to pay development levies on a new house. Meanwhile, older people whose mortgage is minimal are paying no ongoing tax on their property because, unlike America, for example, we refuse to have any ongoing property or council tax. We tax the young to exempt middle aged and older people from any form of property taxation. That is not wise and those of us in this House who may be concerned about the fact that one party, a party with links with subversion and a private army, is gaining support among young people, and I believe that is all those currently in the House, should reflect on the reason young people are feeling alienated. Perhaps it is because our system of taxation is so much against young people making the first move into the acquisition and ownership of property we can exempt people further up the income and age scales who are perhaps more influential in the currently dominant political parties. That is something to reflect upon and I ask the Minister to think about it, as I know he will.

I support a point made by Deputy Richard Bruton in his contribution on the way in which our tax system is anti-pathetical to marriage and to fathers staying in the home to look after children. It is interesting that Mr. Justice Ronan Keane, the retiring Chief Justice, referred to the fact that the absence of fathers is one of the main causes of crime among young people. Why are fathers absent from the home in many cases? It is because the means test system that applies to many social welfare benefits, whether it be in regard to benefits for parents or rent allowance for accommodation, actively encourages fathers to leave or, if they have not left, to pretend they are not living in the home. That is in a country which has created a constitutional obligation on Government to promote marriage, yet a member of that Government, the Minister, Deputy Coughlan, has said she is indifferent to marriage. I urge the Minister, Deputy Coughlan, to read the Constitution. She holds her office as a Minister under a Constitution which obligates her to encourage and defend the institution of marriage, yet she, as Minister for Social and, of all things, Family Affairs says she is indifferent to marriage.

Given the extent to which we have concerned ourselves with other aspects of our Constitution and to which people are willing to plead the Constitution in aid of various causes, I am surprised that the Minister, Deputy Coughlan, could be so ignorant of the provisions of the Constitution that she and her Department would say they are neutral as far as marriage is concerned. They have an obligation under the Constitution to promote it, but even if they did not have such an obligation, they have an obligation in common sense to promote it because marriage provides the institution within which young people are socialised and learn. Young people learn that there are limits to selfishness and to the extent to which they can put their own weight around without impinging on the appropriate rights of others and within which one can learn that for every right, there is a concomitant responsibility. People do not learn that first in civics books or from political debate. They learn it around the kitchen table at the age of five or six. They learn the basic notion of rights and responsibilities in a family setting.

If we have a tax and social welfare code which does not encourage families to stay together or does not encourage both parents to take responsibility and to do so, if possible, by staying in the one house with the children, we will create a major diminution of social capital in this country. Marriage is a more valuable item of capital than all the factories and businesses one can see throughout this city. In terms of the benefit inherent in it for future generations, that institution is more financially and socially valuable to the next generation than any of the motorways we are building today. We should look at it as a form of capital, not physical capital but social capital, and we should preserve it with the same enthusiasm with which we preserve our roads and rail links but that does not seem to enter into the current debate about social policy, and it certainly does not enter into the debate about social welfare and tax schemes.

I was interested to hear Deputy Ó Caoláin refer to tax evasion. I hope the Sinn Féin Party will take an interest in the concerns I have about various schemes undertaken in this city whereby, apparently, bogus certificates are being generated by an illegal organisation to claim refunds of tax which has never been paid from the Revenue.

I would like also to endorse another matter that has been raised by Deputy Richard Bruton in his contribution, that is, his suggestion that we should do away with budget day, once and for all. As some might say — the Acting Chairman is here long enough to remember it — I might be one who has anxieties about budget day. I do not actually. I was very proud of what I did on each of the budget days on which I was present in the House and I think it did good for the country. The best evidence of that is that on every occasion my successor adopted 99.9% of the measures contained in my budget without blushing. We will leave that aside.

The current notion of keeping the budget secret until the Minister stands up and announces it, and assuming that because it has got through the House on that day it is the right policy, is a mistake. There is another out-working of that mistake that is even more obnoxious, that is the constitutional limit that is placed on the date whereby the Finance Bill must be passed through the Houses of the Oireachtas. Under the Constitution, the Finance Bill has to be passed through the Houses of the Oireachtas within a particular timeframe after budget day. I suggest there is no sense in that. There is no need for that time limit. The price we pay for that time limit is that the Minister for Finance comes into the House with reams of immensely complicated amendments, that even the most practised accountant — there are some such in this Chamber — or tax lawyer could not understand. Those are pushed though the Select Committee on Finance and the Public Service and the House without any deliberation.

It is important to recognise we are sailing close to the constitutional wind in so far as the way we do our business in Leinster House is concerned. We should recall the Finlay judgment in the High Court on the Aliens Order recently, where the court struck down an order on the grounds that the issue had not been properly considered in this House. I am waiting for a challenge to a Finance Bill based on the fact that amendments like that were introduced so late in the process that they could not possibly have been considered in this House. We have to look hard at that and ask ourselves if we should have no budget day, but publish the Finance Bill about two months earlier in the cycle and allow it to be debated as if it was a Green Paper and passed in a more leisurely fashion with the amendments produced in a more leisurely fashion.

I welcome the opportunity to speak on the Second Stage of the Finance Bill 2004. I would like to refer to some of Deputy John Bruton's comments but not in an argumentative way. I see the point in some of what he has said but I may disagree with him on some of the other issues. I was taken by the Slovenia example of the 19% tax rate across the board.

I was walking into the House when the Deputy mentioned it. It sounds good and it sounds simple and the 19% sounds great. If only life was so simple and, perhaps, a more developed economy has to have a slightly more developed approach to its tax base. We have a system whereby those on lower incomes pay no tax; most people pay about 20% and those who can afford to pay 42%, do so. That is a more just approach that one where everyone pays 19% across the board.

There are exemptions in Slovakia for low incomes as well.

I appreciate that. If there are millionaires earning high income they could afford to pay at the higher rate. We have a low rate of corporation tax and a mixture of VAT rates. I sympathise with one of the points raised by Deputy John Bruton. I am coming at it from a slightly different angle. He referred to the tax burden on young people and the difficulty it is creating for them. There is an inherent bias in our system whereby at the earlier stage of their lives, young people pay more for everything in society, be it taxation, motor insurance and so on, while the older generation does not appear to have the same burden in respect of those issues. There is some truth in that and it is an unfortunate situation. I am not long in public life but having studied the position, I have seen a massive transfer of wealth in Irish society from the younger generation to the older generation. Somewhere along the line the consequences of that will have to be examined.

Older people and those who have their mortgages paid on houses that may have been worth €50,000 a few years ago, but are now worth €500,000, feel they have enormous wealth. The consequence of that is their children and grandchildren cannot get a house of their own because the value of such a house is €200,000 or €300,000 depending on its location. The property market has worked to the phenomenal disadvantage of young people and to the tremendous advantage of the elderly. I do not know how we can go about reversing that trend. It is not precisely what is contained in the Finance Bill but it is an issue that needs to be examined because it will lead to many younger people having to rent rather than purchase houses. Ultimately, it will lead to a change in home ownership patterns.

I sympathise with what Deputy John Bruton said about the role and importance of a two-parent family. I would not like the message to go out that those who are not fortunate enough to have a two-parent family means their families are less valuable in society. He stressed the value of the two-parent family in society. However, we should not diminish the other family units because we live in changing times.

The issue on which I agree with him to a large extent concerns the passage of the Finance Bill. I was a member of the Committee on Finance and the Public Service in the last Dáil but I am now its chairman. It bemused me from beginning to end. I was here on budget day and heard the announcement. In early January there was the press release from the Department of Finance indicating the key features of the Finance Bill. The Finance Bill is then published. On Committee Stage, there is a raft of amendments almost as large as the Finance Bill. Regularly, during the course of the three-day period on Committee Stage, new amendments appear overnight which necessitates officials having to work throughout the night. Perhaps on the day before finishing Committee Stage, there may be another 30 pages of amendments which have to do with a new scheme which is being introduced. In the following week, on Report Stage, there are more amendments. Given the haste with which amendments are tabled, it is no wonder there are loopholes in the tax legislation. I agree there should be a guillotine at some stage otherwise the process would be infinite and one would roll from one to the other.

Will the Deputy yield?

Would it be a good idea to give the Chairman of the Committee on Finance and the Public Service discretion to say that an amendment has been submitted too late for consideration?

As Chairman of the Committee on Finance and the Public Service I do have that discretion. There are procedures laid down under which amendments have to be cleared by the Bills Office before they can be presented to a committee. My argument is that the existing timescale is too short and needs to be changed for every committee of the House. On occasion, as Chairman, I would get a phone call from an Opposition party because it may not have the full expertise of the civil servant in the Department of Finance and may not have referenced their amendments properly, asking for a few extra hours to allow the amendments to be resubmitted. I have done that. The problem is that amendments come in almost on the morning of Committee Stage and it is not possible to look at them. Sometimes they are not reached in the debate. I am a chartered accountant. In theory we could take more time between Committee and Report Stages which would enable amendments to be tabled and one would have an extra few days. When I became a Member on the last occasion, I felt it was an extraordinary way for legislation to be passed as I did not know the Bill went through that type of cycle. Perhaps the Finance Bill is the worst example of that but it seems to happen year after year and Bills are sometimes very extensive. The list of amendments can often run to 100 pages so it is an onerous task and leads to an industry in this regard. It is fine when amendments are put through the Dáil overnight, but it is then easy for accountants to find loopholes in the Bill because they have perhaps a month to consider what was drafted overnight.

Hear, hear.

From that point of view, there is much on which Members agree. Perhaps the issue is connected with Dáil reform and is not the fault of this side of the House any more than it is of the Opposition side. The system has been in place as long as I have been in the House and should be dealt with on a non-partisan basis in the future.

Regarding the specifics of the Bill, I want to highlight a number of measures. I am particularly pleased that the Minister, Deputy McCreevy, had the opportunity to introduce another budget. He will go down in history as one of the most consistent Finance Ministers over a period and one can see his consistent agenda operating from year to year. Regarding the consistency between the parties, we have not torn up what other parties brought in previously and social consensus has helped in that regard, particularly the national pay agreements and national understanding. That has sometimes been to the exclusion of Members of the Oireachtas. Decisions are sometimes announced from Government Buildings by a Minister or the president of the Irish Congress of Trade Unions regarding issues which in other countries would more properly have been debated in the houses of Parliament. That said, the system is working well and most people are happy with it.

I wish to make a controversial point in regard to the representation of workers by those at national partnership meetings. While employers, the Government, farmers and the social pillars are represented, the trade union movement is present ostensibly on behalf of the Irish workforce, which it no longer represents. Approximately 700,000 people are members of trade unions in Ireland, with over half of those working in the public service because practically every member of the public service is a member of a trade union. In the economy outside the public service, encompassing approximately 1.4 million workers, perhaps 300,000 of those are members of trade unions. The trade unions, therefore, only represent a small fraction of the workforce in the private sector and most of that membership is concentrated in the bigger and older industries. The new, smaller economy and its employees are not represented at the partnership talks. While I do not know how such new industries can be brought into those talks, their representatives must also be brought into consultation.

Regarding the budget changes, I am pleased that the employee tax credit has been increased by €240 to €1,040 per annum. When the minimum wage was introduced some years ago, only 64% of that wage was outside the tax net. I am happy that percentage is now up to 90% and I hope it will be 100% in the next budget or so. It is illogical to have a minimum wage, which has risen to €7 in recent weeks, if a small portion of it is subject to income tax. I hope that will be fully cleared in the next budget and that the minimum wage will be 100% free of income tax. I am also happy with the increase in income tax exemption limits for people over 65 years of age. As a result of this, more than 40,000 taxpayers will be removed from the tax net over the coming year, compared to last year's figures. With regard to personal tax, the issue on which most concentrate, there has been an increase in the subscription allowance for trade union membership, on which to allow people income tax relief.

Regarding an issue recently raised by way of parliamentary question, there is income tax relief for people paying for refuse service collection charges. Only a small proportion of households who pay such charges claim the tax rebate. Sometime in the future, I would like the rebate available to income earners extended, perhaps under the free schemes, to those on social welfare. There is an anomaly in that I can receive a 20% rebate on my wheelie bin charge, which is charged by a private contractor, whereas my next door neighbour, an elderly lady on disability allowance, cannot get relief through the social welfare system even though the costs of her having a wheelie bin are the same as mine. It is not right that a high income earner should be subsidised for wheelie bin collection while an old age pensioner or somebody on disability or unemployment allowance, or otherwise in receipt of social welfare, has no facility to get such relief. I accept that there may be a waiver system in place in some local authority areas but we must realise that the collection system is totally privatised in most areas, where no waiver system is possible.

Section 14 deals with farming and amends the existing Taxes Consolidation Act 1997 by increasing the annual exemption for income derived from certain leases of farmland from €5,078.95 to €7,500 for leases of five or six years taken out from 1 January 2004. Where such leases are for seven or more years, an annual exemption of €10,000 will apply, instead of the previous limit of €7,618.43. In addition, the minimum age for a qualifying lessor is being reduced from 55 years to 40 years.

These changes will be very helpful to rural constituencies, such as my constituency of Laoighis-Offaly, where people want to avail of such facilities. Such people were trapped and wanted to get out, but did not want to be taxed in regard to how they leased their land. This section gives new entrants into agriculture an opportunity to farm a bigger parcel of land in a more economical way and, perhaps, gives older farmers who were not making a viable income from their farms some tax free income and the opportunity to earn income away from the farming sector. The measure is very welcome.

Section 28 deals with the extension of film relief under section 481 of the Taxes Consolidation Act 1997. Several Members present for this debate were members of the Committee on Finance and the Public Service which met in joint session on a number of occasions with representatives of the film industry. It is important that the Minister's recent budget announcement took full account of the all-party agreement at that committee that these reliefs be extended. That decision will pass into law under section 28 of this Bill.

One interesting finding which came out of our committee discussion on relief for the film industry, of which I was not previously aware, was that there was abuse of the existing relief by a small number of people in the industry. The Minister is rightly bringing in new procedures to curb that. I hope that will improve the image of the industry and ensure that no allegation of abuse of the tax relief is levied against anyone in the industry from here on. It is welcome that the Minister has agreed to extend the relief in a balanced manner and one likely to cut down on abuses which may have been in the system.

I am particularly pleased with the various improvements regarding capital allowance and tax incentive schemes which the Minister announced in the budget in addition to the film relief just mentioned. He has also extended the urban renewal scheme, the termination date of which had been 31 December 2004, although that has now been extended to 31 July 2006. The relief for multi-storey car park schemes has also been extended from 31 December 2004 to July 2006.

I stress that this does not allow new people into the system to avail of tax incentives which would not have been available to them before now. In all these situations, 15% of the total project costs had to be incurred before 30 September 2003 and the local authorities must issue certificates to confirm that. This measure is in regard to projects already in the pipeline which had commenced and incurred expenditure but may not have been completed by the end of 2004, just over ten months away. The Minister has provided an extension to allow projects currently on hand to be completed but is not allowing new entrants into the field. Some feel that is a good thing.

The same applies to the building of hotels and holiday camps. While there are not many of the latter in the constituency of Laoighis-Offaly, the hotel incentive will be very important. Again, in that regard, a full planning application must have been received by the local authority before 31 May 2003. The Minister did not change that deadline so we are only dealing with hotel projects in the system since May 2003. He has extended the deadline by which the projects must be completed, which is fair and sensible. The same applies to the town renewal scheme. They must be in the planning system at the end of December 2004 and the closing date has been extended to 31 July 2006.

It is interesting that some Deputies objected to these schemes. They said they helped well-off people to shelter their income from tax. I am surprised Deputies said this because these schemes have helped to renew and re-invigorate some towns in their constituencies. Deputy Ó Caoláin objected to the schemes, even though I am sure all the main towns in Cavan and Monaghan have benefited from some of the designated sites. These have probably helped to improve old derelict sites in the centre of towns and sites have possibly changed hands. More than 100 towns in Ireland are covered by this scheme. A minimum of four towns in each county is involved. Almost all these properties which became derelict were owned by local people, perhaps by elderly people who were not in a position to invest in them and bring them up to scratch. Some of the properties have now changed hands to the commercial benefit of the towns concerned.

I was disappointed to hear Deputies criticise a scheme of tremendous benefit to most towns in the communities they represent. I ask any Deputy who makes that argument to consider the condition his or her town would be in without the reliefs. I guarantee that the towns referred to would be in worse condition. When a supermarket or restaurant opens up in an old premises or a pub builds a large extension and improves the quality of the locality, there is a spin-off for the town. It gives an air of confidence to it and improves its appearance and well-being. It makes the town more attractive for people to live and work in and not everyone will go off to the big cities, as happened in the past. This is an important issue.

The most significant announcement by the Minister, Deputy McCreevy, on budget day was decentralisation. Laois will benefit to the tune of 510 jobs. There are three Fianna Fáil Deputies in the Laoighis-Offaly constituency. The previous Government constructed a new prison which employs 500 people in Portlaoise and brought a new An Post-SDS plant to the town. Prior to that, the Minister of State at the Department of Agriculture and Food, Deputy Hyland, brought 300 departmental jobs to Portlaoise. We merely continue what Fianna Fáil has always done in the constituency by continuing the programme of decentralisation. I look forward to the successful rolling out of the programme in the months and years ahead.

I welcome the opportunity to say a few words on this important Bill. As Deputy John Bruton said earlier, it may not be relevant to have an actual budget because there is one almost each week. However, it is the legal structure which controls how the finances of this country are raised and spent.

Deputy Power referred to the scarcity of money. Compared to some years ago, this is almost irrelevant. He said it is important to ensure that money is spent properly. It does not bear much relevance to the discussion this morning on approximately €700 million grant aid provided to Kerry without a feasibility study being carried out. When visiting the Border areas, I wish the Taoiseach would find some reason to make a similar investment there without any investigation. We will gladly accept it and make no noise about it.

The issue of urban renewal, which has been beneficial, was referred to. The previous scheme proved to be very difficult to utilise. In my town of Monaghan and in Ballybay, people who should have received a grant had their applications rejected because of all manner of minor technicalities. When the initial applications were being submitted, people did not realise that they should be so precise on the exact building structures and so on. Some genuine applicants in depressed areas, such as Ballybay, failed to get money. Development has not taken place in some of these areas. While the scheme is extended, its operation needs to be examined if it is to be worthwhile.

On farm taxation, it is interesting that there is 100% stock relief for young farmers to reflect the change in the underlying academic course and so on. This is important. There is also an exemption for those leasing. There is no leeway for family transfers, which is a major issue. Given that issues such as taxation, herd numbers and so on must be so precise, will the Minister explain why farmers cannot lease land to their sons or daughters in the same way as they lease it to outsiders? It is unrealistic in the context of transferring land to young people at an early stage. People may not wish to transfer the holding for many different reasons.

The Minister said he is confirming Ireland as a top location for global investment. The news this week that jobs are being located in other countries is disturbing. One report referred to 1,000 jobs being located in European accession countries. This is a serious problem. If the Minister for Finance does not understand the problem, we are in serious trouble. One need only look at the Border region as a whole, especially Cavan and Monaghan, which depends on the mushroom industry, furniture industry and many other labour-intensive industries. Jobs are being lost in these sectors. The figures may not yet be reflected on the live register statistics because people are on a three day week. It is frightening, and all the more so because the Minister does not realise what is happening. He lives within the Pale and in Dublin. The east in general is doing reasonably well.

A recent reply from the Minister for Agriculture and Food indicated that jobs in the mushroom industry have decreased from 1,300 to approximately 300. Since then, many other mushroom growers have left the industry. This affects not just farm families, but workers in the packaging and distribution industry. It was one of the major lifesavers Ronnie Wilson and others established in County Monaghan many years ago. The industry is under severe threat because of imports which are probably being sold in England as Irish mushrooms.

The furniture industry is in a similar position. Some of these industries have set up factories in eastern Europe. Others are importing products just to be assembled in this country and using staff for just two or three days a week. This aspect cannot be ignored. This is the result of a lack of understanding of this low paying industry and a lack of action at an early stage to improve people's education and upgrade their skills so that they can sell a higher quality product.

Regarding decentralisation, Cavan-Monaghan was promised 535 jobs. In the Border region, in towns such as Monaghan and Clones that have suffered most in the 30 years of the Troubles, there has been no job creation by the Government. Hundreds of jobs have been lost in factories such as Monaghan Poultry. I have written letters to the Minister for Finance to point out the opportunities offered in the Border region for the 1,300 jobs that have yet to be earmarked for decentralisation and to ask him to consider the area for those jobs. IDA Ireland and other groups are not supporting us but the Government could put its money where its mouth is. It says it wants to see peace and reconciliation in Northern Ireland and to restructure the areas that have suffered most, but the only way it can do that is by ensuring that Belturbet, Monaghan and Clones get even a small number of jobs. My party has rightly questioned some of the plans for decentralisation, such as the head offices of Departments going to County Kerry or similar places, and how the plans will work. In general, however, we welcome decentralisation which will be a major boost to rural areas.

Decentralisation is needed in the BMW region. It is important to remember that there was a national development plan and according to the Minister for Community, Rural and Gaeltacht Affairs a few weeks ago, there was an under-spend of €644 million in the BMW region while there was massive over-spending in the eastern and southern regions. It is vital that there is an equal spread. The idea of the BMW region was to ensure we got our entitlement but, unfortunately, that has not happened. County Louth is classified as part of the region and the M1 and rail connections are accredited to it, but they benefit only the east and Sligo while the area in the middle gets very little.

The Government has introduced many stealth taxes, development charges being a typical example. They are another means of taxation. They are termed "development contributions" but they are development charges. We depend on cheap transport to get our goods to the marketplace because there are no railway lines along the Border but there have been huge increases in transport costs. Increases in insurance, road tax, diesel and petrol prices are putting people out of business.

Decoupling was introduced into this country without even a debate in the Dáil and there has been a significant decrease in farm incomes as a result, particularly in dairy farming. A senior representative in the farming industry rang me to ask if I realised that many farmers are in crisis. With decoupling they do not know whether to get in or out of milk production, or if this year or next year is the best year to leave it. They will certainly leave by next year at the latest. In a further blow, by Government decree we must now provide 24 weeks storage for our slurry. The Government talks about great increases in spending but the Minister for Agriculture and Food must be asleep at the Cabinet table.

The farm organisations support decoupling.

They certainly do not; I can assure the Minister of State of that. The situation is clear. To meet the terms of the nitrate regulations, €1 billion is required for farm rebuilding. What is the record of the Government in this area? In 1997, €94 million was made available for farm building reconstruction and new buildings, but last year there was only €25.9 million, less than one third of that amount. This wondrous new scheme will not amount to one third of the 1997 figure either. Housing costs have increased by 300% in the meantime. It is chicken feed.

What is the Minister for Agriculture and Food doing about animal health? He is continuing to slaughter all herds with BSE in spite of the fact that substantial money could be saved. He allows farmers to buy animals with Johne's disease but will not give them compensation when they find they have it. This Minister has closed five agricultural colleges. Need we say more?

We must ensure food quality.

If people increase their incomes at all this year, they will enter a higher tax bracket and if they buy or build a house they will have to pay increased charges of all sorts. The least the Government could do is take those on minimum wage out of the tax net entirely. If that is not done, we will lose jobs.

We have heard much in recent years about people getting away without paying tax and have been told that some of the money lost has been clawed back. It is only right that people should have paid their just tax but when senior Ministers in Government at the time used systems to avoid paying tax, it is not difficult to understand how ordinary citizens found themselves doing the same. They knew nothing about investments. They went into their banks and were advised to put money here, there and yonder without any knowledge of what they were doing. Their names should not be published in the newspapers.

There are many innocent people who had a legitimate nest egg who were advised by those in the banking industry without even knowing where their money was. The Minister must examine how these banks are treated. They must carry some of the blame for the revenue problems these people face. In one day I had seven such people in my office and not one of them was a crook. They were all decent people who had been advised this was the best way to invest money and they were not presented with any downside to it or with a letter to advise them that they might be doing wrong. They were told to sign and they did so. These people should not be paying interest on tax due or penalties. Somebody else should pay. I have no objection to them paying the tax they should have paid, but it is unfair that they should be the victims when people who knew better were advising them.

The Minister should re-examine credit card tax. People have to use bank cards and credit cards and a good deal of money is transferred by such payment methods. People should not be forced to pay tax on such cards which they have to use.

Debate adjourned.