Finance Bill 2004: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

I welcome the opportunity to speak on the Finance Bill. It is somewhat regrettable that a guillotine is being imposed on the legislation. I would like to have spoken for 20 minutes on Second Stage, but because of the guillotine I have only ten minutes.

I will focus on a number of sections where we need to perhaps refine or rethink some of the concepts being explored. The first is section 8, which provides for the exemption from income tax of certain benefits in kind provided by employers for employees. Regarding mobile phones, computer equipment and high-speed Internet connections, it is incidental whether those benefits are provided for business use and private use. I welcome the clear recognition from the Department of Finance of the importance of the provision of communications and telecommunications infrastructure. This is a positive recognition by the Department that we should be using tax strategy as one of our tools to encourage increased use of IT equipment and upgrading of that equipment.

Telecommunications infrastructure is the key to modern competitiveness in Ireland. We have debated on many occasions the need for Ireland to take strong action to improve our telecommunications infrastructure. The provision of computers with high-speed access in both business and households is essential. The key factors are availability, affordability and capacity of high-speed Internet connection. We are moving from an analog society to a broadband one. That move has been slow and frustrated. As a result, Ireland has fallen behind some key competitors inside and outside Europe. We need to address that in the short term. We are doing so to some extent, albeit slowly. Section 8 of the Finance Bill is helping, but we should go further.

I have a couple of concerns. The first relates to the high-speed connection which the Government plans to support through the tax code by means of benefit in kind. The connection referred to is 250 kilobytes or more. The Oireachtas sub-committee on IT has concluded deliberations and will produce a report in the next few weeks. It is no secret that we have concluded that anything less than 512 kilobytes is not broadband, and that 124 kilobytes to 256 kilobytes is DSL, with anything below that being ISDN or else analog. We need to constantly raise the bar in terms of broadband capacity. In Japan, which I am aware is an extreme example, consumers have 26 megabytes available should they choose to access that capacity. We should not be disadvantaging companies who provide employees with DSL links to their households, but we should try to grade it to encourage companies to provide a broadband link-up to their employees' houses, rather than an ISDN or DSL link.

In New Connections, the Government's adopted policy on the roll-out of the telecommunications infrastructure, we have set ourselves a clear target of the widespread availability of two megabytes to the consumer. What we are doing here is offering benefit in kind proposals for 250 kilobytes, which is considerably lower. I ask the Department officials to look at that again and see if we could offer incentives to industry to provide proper broadband link-up where possible, or upgrading, where possible, for their employees, and have the benefit in kind advantages of that.

Though there is a good level of acceptance in this Bill of the need to provide, again through benefit in kind exemptions, computer equipment and high-speed Internet link-ups to people's houses, we should perhaps go further. Telecommunications infrastructure and IT upgrade is so important to the Irish economy that we should look at more ambitious ways of offering tax incentives to households and communities as well as to business, in order to provide up-to-date IT equipment as well as broadband link-ups. I would like the Department to take a radical approach towards encouraging business, for example, to provide computers to local communities, schools and so on.

I would like a tax system that would encourage computer scrappage schemes which could provide for the upgrading of computer equipment in schools, libraries, community associations and so on. With a little imaginative thinking, we could provide worthwhile incentives to businesses to do that and also close loopholes to prevent people abusing it.

I would support giving tax breaks for specific reasons rather than taking a blanket approach. I do not buy into the concept that any tax breaks given will be abused by big business. I welcome the fact that the Minister has gone this far but I encourage him to be more ambitious in terms of assisting the Minister of Communications, Marine and Natural Resources in rolling out broadband by upgrading IT facilities for people, encouraging businesses to invest in their communities and offering them a tax break to do so.

On the benefit in kind proposals for the use of company vans and cars in section 8, the criteria for qualifying is a somewhat farcical section which needs to be re-examined. The explanatory memorandum states that for somebody to qualify the following criteria apply: first, the private use of company vans which are essentially for the purposes of the employee's work; second, where the employer is required to bring the van home; third, where other private use is prohibited; and fourth, where the employee spends most of his or her time working away from the employer's workplace. All these conditions must be satisfied to qualify for a benefit in kind exemption.

I understand what the Minister is trying to do, and I have some sympathy for it, but we are trying to impose a restriction that is impossible to police. People will use company vans at weekends. There are very few people using company vans which will be consistent with all of those restrictions. I could not think of any examples when I read section 8. There is an attempt to introduce a section that is unenforceable.

I welcome the leasing arrangements regarding agricultural land in section 14. It is essential that young farmers have access to leased land in the future because scale is all important in agriculture if one's only source of income is from farming. I encourage the Minister to continue the freeing up of leased land by providing annual tax exemptions of increased amounts in the Finance Bill.

I agree with some of the speakers who contributed last night, particularly regarding the lack of imagination in the Department in respect of promoting biofuels as a new industry to reduce greenhouse gas emissions. Huge amounts of greenhouse gas are being emitted in the transport sector but all this Bill offers is some limited tax incentives for pilot projects. We are way behind the game in a European context. Germany now has a significant biofuels industry because of clever tax treatment but we are falling behind, despite the fact that we have a natural competitive advantage.

The Deputy must conclude. There are time slots for everybody and it is unfair, in a limited debate, to take the time allocated to other Deputies.

As I did in the budget debate, I support the general thrust of the measures taken in the budget and welcome the details outlined in the Finance Bill. Having listened to the debate and some of the comments made by the Opposition Members, it appears they see the budget in the context of one year and the review of the decisions taken either in the budget or the Finance Bill, but it has to be viewed over the lifetime of a Government and the programme set out.

Since the programme set out in 1997, enormous changes have taken place in the economy and many people have benefited significantly across the social spectrum as a result of the budget decisions taken. I commend the Minister, Deputy McCreevy, on the initiatives he has taken in every budget since 1997.

In managing any of our finances, we have to be prudent and understand the amount of money we are taking in and the amount left over to spend. It is the same in terms of the Department of Finance. We must target the spend and ensure we get value for money, and it is in that context that I want to address the issues in the Finance Bill.

Revenue set about collecting taxes in an equitable way, as detailed by the Minister for Finance and as stated in the policy of the coalition Government since 1997. Revenue has been extremely successful, not only in collecting the taxes due in an efficient way, including on-line — it is to the fore in that respect — but it has also looked back historically on the amount of taxes due to the State and set about collecting those taxes. We regularly see newspaper reports of that. Reports coming before the finance committee and the other commentary made to the Committee of Public Accounts gives us a clear indication that Revenue is very diligent in its work of collecting taxes due.

On the political side, the policy is fair. We have a low tax economy which is extremely attractive to outside investors and to our own home-grown businesses, and it is fair also to the people who pay those taxes.

On the other side of that budget line is the issue of how we spend that money. I take issue with the way some of it is spent and question whether we get value for money. There is a need now for every Department to examine its methodology in terms of how it achieves a full spend in any one year and to question whether it gets value for money, a phrase that is used often and perhaps it is a little worn at this stage. We are concerned with getting value for the taxpayer, ensuring a fair spend and that the money is spent as diligently as it is collected.

The evidence in terms of whether we get value for money is not good because every week in the Committee of Public Accounts, of which I am a member, we have examples of Departments that do not achieve value for money. There are huge overspends in many areas. For example, enormous overspends on information technology projects in Departments have been recorded. There are enormous overspends on the delivery of the transport and roads infrastructure throughout the country. Departments must take steps to ensure those overspends are stopped. There is a need for greater scrutiny by Departments to ensure projects are delivered on time and within budget, but we hear about the exact opposite every week in the Committee of Public Accounts. Whatever the contractual arrangements are, they have to be changed and each Department should have a section that will ensure we get value for money and projects delivered on time. If that were to happen, judging on the past 18 months, we would have saved a good deal of money which could have been redirected to areas in greater need, or more could be spent on the projects in hand.

Departments that go about their business correctly, trim their sails during the year and achieve savings on the various projects should be rewarded in some way. They have a budget within which they have to live. If they achieve a saving they should be allowed retain that saving and spend the money within the Department on services at the coalface where the public can feel its benefit and, perhaps, fulfil some policy other than what was originally set out in the budget for that year. That would encourage people to look at the various projects and to achieve savings. Given the amount of money spent by Government every year I see no reason that type of saving could not be achieved. It is incumbent on each Department to put in place measures to achieve value for money, efficiency of spend and greater monitoring of the money spent.

Something should be done at national level in regard to the employment of consultants. In each local authority and health board massive sums are spent on consultants of one kind or another, relative to particular capital projects. Within the various Departments there should be the ability to provide consultants at a much lower cost than that being paid on a one-to-one basis by individual local authorities and individual health boards. If a pool of consultants were set up through the various Departments we would achieve value for money in this area. We need to look beyond what is happening within the Departments at national level and look at what is happening within every local authority and every health board.

I note from the Committee of Public Accounts that enormous amounts of money have been returned to the Exchequer. For example, under the urban renewal scheme, up to €80 million was returned in one particular year. Where money is set down to be spent on projects, there are many local public representatives who could identify how it could be spent in the context of the local authority and local projects. That it should be returned when projects are not completed is frustrating. There is a need to examine how those allocations are decided and how best to introduce corrective measures to ensure that does not happen in the future.

On the other side of the budget, particular projects and issues relative to social justice should be taken up to ensure an all-inclusive society so that when the economy improves all boats are lifted. There is a need to look at social enterprise and the initiatives taken to date which have been successful but which need to be expanded and funded in a better way. For example, the various family resource centres throughout the country have proven to be great value for money and of great benefit to local communities. The services housed within those family resource centres are being expanded due to the the demand. To break the cycle that keeps people in a marginalised position we need to look at that success story and understand how it was achieved and how better the money can be spent in that direction in the future. The whole issue of those family resource centres, homework clubs and the various other schemes undertaken by them, through the Department of Social and Family Affairs, needs to be examined and supported given their positive impact on local communities.

Information technology was mentioned in the context of section 8 and the relief provided. There is a need to provide further relief for social enterprise given that the family resource centres are now becoming enterprise centres for marginalised communities. They create jobs on the back of much needed projects within their communities and use information technology in some cases to achieve this. That being the case, more funds should be directed into those community projects to ensure they grow and prosper.

Not enough is being done in the area of information technology and commerce. Section 8 spells out certain reliefs. In the last Administration, the Oireachtas Committee on Enterprise and Small Businesses prepared a report stating that one of the initiatives to be taken was some form of personal tax relief on computers purchased on a once-off basis or upgraded. It recommended that tax relief be put in place. The sooner the better PCs and a broadband connection are in every home because that is the way forward.

Likewise, in terms of Government and e-procurement, millions of euro could be saved in that area if we get up to speed and on-line ahead of our European partners as soon as possible. The only way to achieve this is by direct Government intervention in the context of some form of tax relief to encourage people.

We saw in Ennis, Castlebar, Kerry and in Kilkenny how the community responded to the Eircom information age project and how an information base community can attract its own form of jobs simply because it has a community interested in information technology and willing to use it in the context of their lives, work and the creation of new jobs.

Many jobs can be created if Ireland puts itself to the fore of what is happening within Europe and beyond. For example, Ireland is now well ahead of America in terms of putting new software products on the market. I would like to see a design centre for that activity, such as existed in Kilkenny for the textile business, which would become the central location within Europe for the design and distribution of software. We have the population of interested people to achieve that. What is needed to kick start it and move it forward is other tax incentives built on the back of section 8.

I presented to the Minister an initiative in Kilkenny City around the Maltings buildings, an enterprise centre dealing with training and information technology employment. We should look at initiatives such as that with a view to supporting them, be it through Enterprise Ireland or by direct grant assistance. Where it is proved to have a major positive impact on a local community, particularly those with high levels of unemployment, the Government should intervene. That is part of a social justice programme that could be planned and supported and could result in sustainable employment in a huge growth industry across the globe.

I highlight Kilkenny Industrial Development Company which is non-profit making and provides enterprise units on an IDA industrial park. That is the type of enterprise project that is real and tangible and which the Government should support. There is every reason for it to do that.

In the context of employment I express my disappointment on an aspect of the general package before us in the Finance Bill. I thought a particular issue regarding County Kilkenny, which was raised in the House, would have been addressed. A Leas-Cheann Comhairle, you were involved in the debate on the Comerama factory closure in Kilkenny. Efforts should have been made in this Bill regarding the commitments entered into by the Tánaiste with the delegation representing the unions and employees of Comerama. The amount of money due to the workers of that enterprise is not significant. They are now out of work and the factory is gone but the commitment was given and must be honoured. Perhaps the Finance Bill is the vehicle which should be used to ensure that the cost of the commitment is catered for on a once-off basis. I appeal again to the Tánaiste to consider what was said and the commitment given, and to examine the matter with the Minister for Finance and the unions. This could be done on a once-off basis, to see if the commitment can be honoured in some manner in the context of this Bill in order to deal with what is considered a serious issue at local level in Kilkenny, and which is as yet unresolved.

Regarding the Bill's treatment of housing, much earlier discussion concerned the rent subsidy. I recall a debate in 1997 or 1998 in which it was said that the costs of rent subsidy were in the region of €5 million per year at that time. I would hate to think of the cost now because it has snowballed and is a huge drain on the Exchequer. I take issue with the Bill not in regard to rent subsidy, which is a must and is now part and parcel of the delivery of accommodation to people throughout the country, but because the great housing success stories were the housing estates constructed by local authorities in the 1950s and 1960s.

Members will canvass such estates during the forthcoming local election campaign and will see that they are success stories in their own right. They brought far greater success to the housing issues of that time than the voluntary housing schemes currently in operation. Due to the demand on housing lists, there is need for the House to re-examine housing policy so that the money committed in this regard in the Bill would, over a period, enhance that area of housing, and could be redirected to full-blown local authority based housing projects.

I realise that the policy was changed and that we moved slowly from our previous to our current position in regard to the delivery of local authority houses. However, there is an argument for a return to the position pertaining in the days when large-scale local authority housing projects were constructed. Perhaps funding could be redirected into the many housing schemes which are now being built in the private sector to allow local authorities greater freedom to purchase more houses in order to satisfy those on housing lists.

I urge the Minister to consider this because times change. We now consider budgets not on a one year basis but on a rolling basis across five years or so, and the Minister has delivered every budget since 1997. There is no harm, therefore, in considering the policies in those budgets to find whether we can achieve better results, greater efficiency of spend and greater value for money. That is simply to be pragmatic with the money collected and spent on behalf of the taxpayer. We should examine again the policies in this area in order to satisfy the demands of those on housing lists by perhaps encouraging local authorities to return to an old but very successful policy.

I am glad to see the Minister of State at the Department of Health and Children, Deputy Callely, in the House. He might consider the point I wish to make regarding care for the elderly. Every health policy should be, if you like, elderly proofed to ensure that the best deal possible is obtained in regard to care of the elderly.

Hear, hear.

The Minister of State visited St. Canice's Hospital in Kilkenny where a €2.4 million project is to deliver a 30-bed unit. It is a worthwhile project and one which has been debated at length for the past 20 years, but is now on the verge of being delivered. The health board is willing to contribute €500,000 of the necessary capital which will bring that required from the State down to €1.9 million, which I know can be delivered. Moreover, while I realise there are also issues regarding the provision of jobs in the new unit, they can be dealt with.

Some 140 acres of zoned land was identified by the health board as being above the amount required. The Minister of State was correct to state on his visit to Kilkenny that the land should be disposed of as quickly as possible. He should allow some form of bridging so that the 30 bed unit and, perhaps, an Alzheimer's unit could be built on site with the money raised. I encourage the Minister of State to again contact the health board to ensure the efficient delivery of these two units. He should do so with the utmost speed because the units are badly needed.

The Deputy puts a strong and forceful case.

I wish to share my time with Deputy Cuffe.

Is that agreed? Agreed.

The Bill we should have before us today is a Finance Bill providing for real tax reform, real equity in the distribution and management of national wealth and real delivery for people in their daily lives. However, we have instead the implementation of the threadbare 2004 budget, the seventh budget of inequality introduced by the Minister for Finance, Deputy McCreevy. Although he gave no indication of it in his budget speech, this could well be the Minister's last Finance Bill. A Cabinet reshuffle has been signalled for June this year-——

Deputy O'Connor could be in there.

——after the people punish Fianna Fáil and the PDs in the local and EU elections. I wonder if the Minister has put money on his chances of remaining in the Department of Finance after June. Will the prize go to the PDs, whose influence on the policy of the Government seems to grow by the day? The PDs are now the ideological wing of Fianna Fáil and seem to have a firm ally in the Minister, which may help to ensure he survives a reshuffle. When he delivered his first budget, the Minister described it as the first chapter in a book — the book of McCreevy. He started off with Great Expectations but has finished with Bleak House, if he is finished. As with previous budgets and Finance Bills, this legislation leaves our tax system unreformed and, again, the opportunity to make real progress is spurned.

Few countries have experienced 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. While the Minister and his colleagues throw spending figures around this Chamber like confetti, they cannot hide the fact that the gap between rich and poor has widened since they took office nearly seven years ago.

That is not true.

The proportion of our population living on under 50% of the average income has increased since 1997. The Government's national anti-poverty strategy recognises that nearly 25% of children are living in poverty, some 300,000 children, which is an indictment of the failed policies of the past seven years.

The Government does not see the taxation system as it should be seen — a key resource of the people to help ensure the just distribution of the nation's wealth. The State has the lowest level of taxation as a percentage of gross domestic product of any EU country yet, as a result of the budget, over 50% of taxpayers in the State now pay at the higher 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 18% of the top 400 earners in the State paying an effective tax rate of less than 15%. Therefore, we have the worst of both worlds.

Overall the tax take here is remarkably low by European standards, yet 25 years after the tax marches in 1979 the burden is still borne disproportionately by ordinary PAYE workers, 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 should enjoy. Who suffers as a result? The average worker who cannot afford to pay private health care and who feels the brunt of stealth taxes, the elderly, the unemployed and the youth. Who benefits? The wealthiest earners who have been allowed by the Government to escape their obligation to pay their fair share of tax.

That is not true.

These people enjoy the benefits of private health care and reap the rewards of the battery of property-based tax shelters created by the Government and retained and extended in the Finance Bill.

What hypocrisy.

The retention and extension of these shelters is the most disgraceful aspect of the Bill. The Minister of State knows that developers of private hospitals, sports injuries clinics, hotels, holiday cottages and multi-storey car parks do not need tax breaks. There is no estimate of the monetary cost to the Exchequer of these and other tax breaks which allow the wealthy to avoid tax. We hear about it every day in this House.

There is no estimate or analysis of the supposed benefit to the economy and to society of these bonuses to property owners, landlords and speculators. Naturally, in this Government which is dominated by Progressive Democrats ideology, a far cry from what Fianna Fáil once stood for, there is no evaluation of the option of direct State investment of these funds in projects that would be of real social and economic benefit. We know that the massive sums lost to the Exchequer by these scams could be used to improve the lives of ordinary people the length and breadth of this country. The Government's motto is property, not people, property before people.

The Minister's fondness for horses and stables is well known. The provision in section 87 of the Bill giving more power to the Revenue Commissioners to deal with tax evasion through offshore bank accounts is a prime example of closing the stable door long after the horse has bolted. We will probably never know how much wealth was siphoned out of the economy in offshore bank accounts during the past decade. What is clear is that the unmasking of the DIRT and Ansbacher fraudsters has not altered the activities and values of the super-rich in 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.

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 and €2 million. This is on top of the €684 million already collected as a result of detection of DIRT tax fraud, €26 million paid by Ansbacher account holders and the €47 million retrieved from the National Irish Bank clerical medical international scheme. A study by KPMG, the international accountancy and consultancy firm, found that more than €4 billion had been lodged in the Isle of Man bank accounts of six Irish subsidiaries between 1998 and 1999.

In October last, the Revenue Commissioners notified Irish Permanent and Life 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 economy?

Last October there were howls of protest from multi-millionaire, Denis O'Brien, because people in Ireland dared to question his tax exile status which is estimated to have saved him €55 million in tax before he sold Esat in 2002 for €2.3 billion. The Minister must have smiled when he heard Mr. O'Brien saying that we are fast turning into a communist state. The Minister knows how well he has looked after Mr. O'Brien and many others like him. They have nothing to complain about in this Bill or in any of the Minister's previous Finance Bills.

The Bill does nothing to alter the gross inequality in society. It does nothing to reverse the growing poverty trap in which a greater percentage of people now find themselves. It does nothing to address the plight of the 300,000 children existing on or below the poverty line. It does nothing for the people most in need in society. Effectively what we have is a continuation of the Progressive Democrats-Fianna Fáil Thatcherite policies.

I wish to confine my remarks to sections 25 and 26 of the Bill. I want to talk for a few minutes about the building aspect of Ireland, the kind of Ireland we are constructing and have been building over the past ten or 15 years, going back to the very first tax incentives for construction in 1986. Given these incentives, are we building a better Ireland? Are we encouraging quality and sustainable building methods? Are we building and extending communities for which our grandchildren will thank us? I suspect we are not.

The past ten or 15 years have been characterised by builders making a quick buck, sloppy and sub-standard construction and taking away from the legacy of buildings that were built in our towns and villages in the 18th, 19th and early 20th centuries. I suspect that in generations to come we will look at the kind of buildings, apartments and car parks built in the late 20th and early 21st centuries and judge them badly. We will think again about the kind of incentives provided.

From a financial perspective, one of the most significant questions that must be asked is what was the amount of foregone tax to the Exchequer? I wonder will we ever know how much tax was foregone by giving such massive tax breaks to construction over almost a 20 year period. I wonder could that tax have been used better.

I want to come back to the main argument. Have the changes over the past ten or 20 years improved our towns, villages and cities? Through my background as an architect and town planner, I have huge respect for the legacy given to us from the 18th and 19th centuries. At that time people built well. They built streets, squares, market squares and public buildings that have stood the test of time. In more recent years, we have squandered that legacy. I have seen multi-storey car parks built on the town walls of some of our most historic settlements. I have seen the legacy of centuries squandered as the bulldozers moved in and destroyed what we inherited from our forefathers. I wonder could we have encouraged quality. Could we have tailored the tax incentives to provide more encouragement to retain the buildings that were there, for their quality construction, and provide more support for people trying to refurbish or build on to a single building they had built rather than encourage the clean sweep? We would have been much better off if we had gone for quality rather than quantity with the tax incentives provided.

When I look at the apartments that have been built in my city of Dublin, I wonder will they stand the test of time. I certainly do not think they will become tenements overnight. They provide a roof over the heads of many existing residents, including many people who have come to Ireland in recent years, but I do not think they provide for a quality family life. They do not provide for a good place in which to grow old gracefully. We should think again about the design quality which should be encouraged. We should seek better quality apartments that will be homes, with decent sound insulation, open spaces, parks and playgrounds, integrated child care facilities and shops within walking distance. The concrete wallpaper legacy in many of our towns and cities has not added to the built environment.

I remember an advertising campaign that was run by either Bord Fáilte or Aer Lingus in the mid 1980s in Italy. There was view of Dublin looking down the Liffey quays with the slogan in Italian "Volare diretta al cuore”, fly straight to the heart. The view east from Seán Heuston bridge showed a magnificent 18th and 19th century townscape, the tourism product we were selling to Italy. Almost all that townscape has been demolished in the past 20 years and replaced with third-rate apartments that add nothing to thecity. They certainly do not attract tourists and will not feature in the advertisements we will show people to encourage them to come to our capital city.

This is not just about Dublin; it is about the small towns and villages that survived for centuries. In the past 15 years they have changed dramatically for the worse. People have moved from the flat above the shops to bungalows in the country while the shop buildings have been pulled down and replaced by anonymous apartment blocks that are not the sort of place someone would want to raise a family. They do not encourage family life and are surrounded by a sea of car parks. The quality of building is so poor that people often have no option but to move away from the morass of car parks and third rate apartment blocks. It is no wonder that people want to build a one-off house when the choice they are given in towns and cities is mediocre at best.

We should re-examine the tax incentives we give. We should encourage quality and sustainability and provide incentives for low-energy apartments that incorporate passive solar technology. The fines that will be imposed as a result of the Kyoto agreement — from the pronouncements of the Minister, they will be passed on to the average punter rather than industry — could be averted if we think about how to incorporate low-energy, low-emission building techniques. It is not rocket science. It is relatively easy from a construction point of view, and from a fiscal perspective it would be easy to transform the incentives we offer to encourage better design quality and sustainable construction.

Tax incentives for holiday villages have created the worst kind of American suburban sprawl in our coastal resorts. Did we encourage quality construction in the communities on the coast? Did we encourage people to live there all year round or sustainable business activity? No, we encouraged people to come for a month in the summer, clog up the sewerage system and pollute the sea. We put new communities miles away from the towns they were meant to support, leaving people dependent on their cars. It did not have to be that way. We could have built properly, added terraces to the towns and created communities where people could cycle or walk. Now it is impossible to push a buggy on the footpaths because the cars are parked so close together. That is not a good legacy to pass on to the next generation; it simply perpetuates mediocrity.

The omens were not good when the first tax incentive development was built in 1987, the petrol station on the quays of Dublin. We knew then that design quality would not be encouraged. It could, however, be so much better. In recent years, some architects have built quality structures. The county council offices in Donegal, Fingal and Dún Laoghaire show that we can do better. We should lead by example and our tax incentives should promote higher quality construction and family-friendly building solutions that cater for all stages of people's lives. We do not seem to have an integrated approach to building communities. Child care is here, nursing homes there and tax incentive apartments somewhere else. There must be a way to encourage better construction through tax incentives.

There are many good examples of construction in Ireland, from the Commissioners of Wide Streets in the 18th century to those who built quality towns and villages. It is regrettable that tax incentives in previous Finance Acts and this Finance Bill do not do enough to encourage better quality and solutions of which we will be proud in future. I hope that, in a future Finance Bill, through tax incentives, town renewal plans, integrated and local area plans, we will promote quality and sustainability.

I wish to share my time with my colleague from Galway East, Deputy Callanan. I welcome the opportunity to contribute to this debate. I have listened to it carefully in the House and on the monitor while working in my office and I will follow up on the contributions I made on the budget and the Social Welfare Bill. I was amused to hear about the availability of scripts from press offices. That has passed me by because, since I entered the House, I have represented my community, spoken from the heart and brought to bear the experience I have from my own life. That is the positive way to speak.

I agree with Deputy Ferris about the book that the Minister for Finance has been writing for the past seven years. It is clearly a best seller and, unlike some of the contributions from the Opposition benches, it is not fiction. The public realises that and supports the Minister.

The Deputy is seeking promotion.

History will be kind to the Minister for Finance and I do not believe the view being propagated by Deputy Boyle that the Minister is going somewhere else. He is doing his job well and enjoys the confidence of everyone on these benches.

There has been much negative comment but there are many positives in this Bill and my colleagues are wrong when they talk about the public's reaction to it. The polls reflect a Government that is doing its job well.

The Government would lose 20 seats in an election. Deputy O'Connor's seat could be one of them. Is that positive?

We will see who loses 20 seats. I am a democrat and will always accept the verdict of the people. I cannot see any alternative Government in my lifetime, although that may be a bad thing too.

I am glad to note the presence of the Minister of State, Deputy Michael Ahern, but am disappointed the Minister of State, Deputy Callely, had to leave the Chamber for a few minutes. He has been subject to a little criticism, totally unfounded, from across the floor in recent weeks. He, like his colleagues, is doing his job and he communicates with other Members at every possible opportunity.

He invented the European Union as well.

I praise him for what has been achieved for the elderly. I attended a conference recently at which elderly people were of the view that, in terms of him carrying out his remit, the Minister of State, Deputy Callely, is like a breath of fresh air.

Perhaps on Clontarf beach but not here.

Clearly, he is a Minister of State who is doing his job, and the only reason the Deputies opposite are giving out about him is that he is doing his job to the best of his ability——

He does it to the best of his ability but how good is that?

——and representing the people, which is what, like the rest of us, he was elected to do.

I acknowledge the support for the elderly in the Bill, an area in which I have a personal interest. I welcome the increase in the tax exemption limits for persons over the age of 65, which is now €15,500 for single persons and €31,000 for couples. On many occasions I have made the point that many of the constituents who come to any of the seven clinics I hold each week——

Where are they, Charlie?

They are in Tallaght, Firhouse, Greenhills, Templeogue and elsewhere in Dublin South-West. I am always available to people who want to see me. I, like other colleagues, was here yesterday and I went for a little walk during the course of which I met several people from Tallaght who were shopping around Grafton Street, taking account of the vibrant economy which this Fianna Fáil-Progressive Democrats Government has generated.

I am sure the Deputy did not miss the opportunity to get a vote? Where were those people from again?

I am sure if the Deputy walks around the streets of Dublin he will meet many of his constituents who are happy to be spending money that they are making under this Government.

Some 400 people are sleeping rough on the streets of Dublin, that is what the Government has done.

I am concerned about that too.

I hope the Deputy noticed some of those people when we was walking around Grafton Street.

Of course, I do, and I take my time to do so. I try to help those people. I do not just sit here making statements, I do my work.

Many of those people come from Tallaght and other suburbs, but they do not vote anymore.

Prior to being elected to the Dáil I had another life and did many jobs, with which I will some day regale the House.

Tell us, Charlie.

One of jobs I had when I first moved to Tallaght in 1969 was shop steward. I welcome the increase to €200 per annum in the allowance for trade union subscriptions.

An increase of €40. One would not want to spend it all on the one night.

It represents progress and the Government is responding to needs. In these times of high employment — there is no question about that and I will not take a lecture from the Opposition about jobs being created and sustained by the Fianna Fáil-led administration — it is important to note the levels of activity in the Labour Court and the Equality Authority. I welcome the fact that compensation for infringement of employees' rights and entitlements will be tax free.

On the benefits-in-kind exemptions I, like other colleagues, received many representations on these changes. The extension of the existing benefits-in-kind exception to employer-provided travel passes, which will include the Luas line that will serve Tallaght, is welcome.

That is eight times I have heard that word mentioned.

The Luas line to Tallaght is well anticipated and the people there are looking forward to it.

Some 13 years after Fianna Fáil announced it.

Tell us about the Red Cow Roundabout.

When I was driving into town this morning the Luas was being tested on the Embankment Road towards Tallaght.

That is nine times I heard that word.

We are looking forward to that service. I noticed in Dublin South-West yesterday people were delighted with the progress being made.

The Deputy is milking the old Red Cow.

Fianna Fáil created the Red Cow.

The Minister, Deputy Brennan, is to be complimented and the chairman of the Oireachtas Committee on Transport, Deputy Eoin Ryan, put his finger on the button yesterday when he validly made the point that the people of Dublin, not only in the south of the county but also in Tallaght——

That is ten times.

——and nearer to the city, are looking forward to the Luas. He made the point that Fianna Fáil must continue to provide that infrastructure, and I compliment him on that.

People have been waiting for it for a generation.

I hope that next year the Minister will reconsider the taxing of special employee awards. It is necessary to control the value of them, but such recognition awards up to, say, €500, provided they are available to only a specified percentage of staff in a company, should be exempted.

Many of the representations I receive as I go about my constituency relate to the ever-rising costs of dental treatment. There is no need for the Deputies opposite to heckle me on that — I know the story and there is a problem in that regard. I put up my hand and acknowledge that there is a problem, and it needs to be sorted out. The provisions for dental insurance allowances in the Bill are a great help and will be warmly welcomed.

I have often praised the facilities and highlighted the difficulties in my constituency, particularly in Tallaght, which is the third largest population centre in the country.

That is 11 times.

I am also aware of my role as a Member of the Dáil and I am happy to take an interest in other parts of the country. I take an interest in Galway, the midlands, Louth and other parts of the country — that is why I am here. I support the sections of the Bill that provide exemptions in respect of income received by persons in the Gaeltacht areas under the Irish language student scheme. I also support the increase in the rental income to €7,500 and €10,000 which can be earned by members of the farming community on the leasing of their land. There is a farming community up the hills in Tallaght and I am happy to support its members, and will continue to do so.

That is 12 times.

Other colleagues have spoken about the support the Minister has given to the Irish film-making industry, which I hope nobody criticises. The industry strongly lobbied for it and such support is welcomed by us all.

I will tell the Deputies one of my little secrets if they do not tell anybody. I go to the pictures the odd time, usually in the UCI in Tallaght.

That is 13 times.

It is good that we all support the Minister in assisting the Irish film industry. I hope he will continue to do that. There will always be politics and people are entitled to raise the odd negative point, although it is a pity sometimes that they do, but the Bill introduced by the Minister, Deputy McCreevy, is having an impact. People are of the view that the Minister is popular and does his job, and I continue to support him in that regard. I also support the Bill.

I welcome the Bill. Ireland has survived the economic downturn better than most countries due to good Government, particularly a good Minister for Finance. Only a fortnight ago the Government fiscal policy was endorsed by the European Commission. The public realise the need for fiscal restraint and to avoid too much borrowing — borrowing is the real stealth tax. We need to limit our spending to what we can afford.

The budget protected the weaker sections of the community through substantial real increases in welfare payments. It also improved the tax position of the lower paid. It introduced measures to foster enterprise and protect our jobs base for the future, many of which will be given legal effect in this Bill.

We have sought to spread the fruits of growth on a regional progressive basis, especially through our programme of decentralisation. I welcome the decision on the decentralisation of many Departments, especially the decentralisation of 110 staff to Ballinasloe and 50 to Loughrea. This will give confidence to Ballinasloe town which has suffered heavy job losses due to the closure of Square D and the A T Cross factory. Ballinasloe will welcome these civil servants with open arms. With the new leisure facilities just opened, the new marina, the new secondary school and the latest announcement of the go-ahead for a new gaelscoil, Ballinasloe is an attractive location.

The Government has spent billions on roads. No matter what route one takes one will notice major developments. We look forward to the new N6, which will provide a dual carriageway from Dublin to Galway.

The Deputy should not hold his breath.

It is going ahead.

The Government is doing its job.

This year's roads programme provides for more than €7 million for the Loughrea bypass. It has been a bone of contention for many years but it is now going ahead. The future opening of the western rail corridor will open up the west for new developments.

The increases in the budget in social welfare benefits, especially in the old age pension and child benefit, are welcome. The extra €30 million provided for the disabled is also welcome. The increase in the income disregard in the carer's allowance to €500 for a married couple is necessary. If a person called to me a few years ago seeking to apply for a carer's allowance, I would have told him or her that it would be difficult to obtain, but now with the income disregard many more applicants will qualify. I hope the Government will introduce a home-based subvention in the future. This will give people a choice to be cared for in their own homes rather than in nursing homes. I have nothing against nursing homes but if a person chooses to stay at home he or she should receive help that allows him or her to be cared for at home.

I compliment the Government on looking after the disabled, the elderly and children. Any Government that does this will be thanked in the future. The country is progressing very well under the Government and anybody who comes home after having been abroad for some years finds it very hard to understand how it has developed in such a short time. It has new houses, new roads and other developments because of good government.

Let us consider some difficult areas. When pensioners get their increases, unfortunately the local authorities decide to increase the deferential rent, thus reducing the increases. This should not happen. The increase pensioners receive should be the real increase and the local authorities should not decide to siphon off part of it.

The Deputy is in Government and can do something about it. Why does he not do so?

We are and will continue to do so and now we are promoting——

He does not mention this when he mentions the €10 rise or state that €4 goes back to the local authorities.

The Fine Gael Party is in control of most local authorities.

Why does the Minister of State not do something about it in those councils under the control of his party?

We would hope that Fine Gael would support us in the local authorities to address this.

I would like funding to be provided for sewerage schemes for small towns and villages because we are now talking about settlement areas, providing planning and a section around every town. If we do not provide the services, this will not be possible. I am very much in favour of the provision of small sewerage schemes.

The new development charges will pay for them.

The development charges will be looked after by the county councils——

What will the Deputy say about development charges?

What the Minister decided to do in that regard was give the authority to the councils to make decisions rather than the county manager.

That is because he would not pay for the infrastructure.

I know the councils in Galway will look after this issue.

Hear, hear.

I welcome the increase in the minimum wage to €7 and the benchmarking process. In future, when everybody's income is benchmarked——

We are on benches here.

Backbenches, I am afraid.

——we should consider having no further increases in terms of percentages — we should give real increases. If the cost of living increases by €10 per week, we should give €10 across the board. When we are benchmarked, if one gives a 5% increase to people earning €10,000, they will receive €500, and if one gives a 5% increase to people on €100,000, they will receive an extra €5,000. Surely this makes the rich richer and the poor poorer.

That is what the Deputy's Government does.

Deputy Paul McGrath speaks from the position of the rich.

The Deputy is reading the wrong script.

It is about time we decided to take care of this matter. The Government will consider such matters because it is a caring Government and it looks after the people.

It cares for itself.

It has developed Ireland into what it is today, namely, a thriving and rich country.

I welcome the roll-out of broadband to 88 other towns. I congratulate the Minister for Communications, Marine and Natural Resources on this initiative. This is very necessary because broadband is one of the necessary facilities for employment in the future.

I congratulate the Minister for Finance. He is doing an excellent job and has brought the country back to a thriving state. I wish him the best of luck.

I wish to share my time with Deputy O'Dowd.

Is that agreed? Agreed.

When I listen to some of the speakers in the House, I get a little amused. I commend my good friend Deputy O'Connor because, based on a rough count, he managed to mention Tallaght 12 times in his speech. I do not believe this is his all-time record but he is moving towards it and doing well. Having said that, I found his remarks on the creation of jobs strange. Where has he been since he was elected? His Government has presided over an economy that has suffered the loss of about 1,000 jobs per week since he was elected to this House. Furthermore, it is making it more difficult for those who lose their jobs to obtain social welfare. It is reducing the time on which one can stay on social welfare and the incentives for those who want to get back to work. Deputy O'Connor should live in the real world.

The Deputy knows that is not true.

I am sorry, but it is true and the Deputy will not face up to the reality of it.

The Deputy should consider the money being invested in social welfare.

Deputy Callanan, who has now left the Chamber, concluded on the point that the Government has brought us back to prosperity. I was on local radio with a colleague of mine not so long ago and he spoke about the budget and the fact that there was a desire to return to the old times of borrowing money. I asked him across the airwaves if he was aware that we are borrowing at present. He denied that we are but the reality is that we had a deficit of €1.5 billion in 2003.

That is the lowest in the EU.


This year, we are heading for a deficit of twice that amount, almost €3 billion. The Government inherited an Exchequer surplus. What has it done but return to the days of borrowing? We are borrowing, and borrowing heavily.

The Deputy should look at the bigger picture.

I welcome section 14 of the Bill on the leasing of farm land. The amount of rental income one can obtain tax free from farm land has been increased from about €7,500 to €10,000 annually. This means a farmer who is retiring or leaving farming can lease his land and obtain up to €10,000 tax free. This is a welcome measure, but the Government has failed to address the nub of the problem associated with farm leases. The Minister of State, Deputy Michael Ahern, is very familiar with this because he would have dealt with it regularly in his previous role as an accountant. The nub of the problem is that a farmer can lease his farm to a stranger, let him work the farm and get tax relief on the money he receives. However, if he wants to lease his farm to his son, daughter or relative, he will not receive tax relief. The Government supports the leasing of land to a stranger but not to a family member. From this we can conclude that the measure is anti-family. It is a disgrace. The measure was introduced in the Finance Bill 1993, when the current Taoiseach was Minister for Finance. It is about time the problem was addressed.

One of the other anti-family measures of this budget is——

That was not a measure in this year's budget.

It was not but I am entitled to mention it because the Government is changing it in section 14. The Minister of State knows well I am entitled to do so because he is long enough in the House.

The second disgraceful anti-family measure results in couples who live side by side and earn the same income paying different rates of income tax. For example, consider the case of two couples in this position. The first couple has one income and is earning €60,000. The second couple, also earning €60,000, have two incomes. Is it not frightful to think that the couple with one income are being penalised because they have only one income, that they are forced to pay an additional burden of tax which at the €60,000 level of income is €90 a week? Is that fair? Is it fair that we should impose that burden on a single income family when they have probably taken the best measure for society in that one of them has decided to stay at home to look after the family? Is it fair that we should treat them in that way? I certainly do not believe it is. It is anti-family, it is wrong and something should be done about it. We on this side of the House have committed ourselves to changing that when we go back into Government. We will balance the books for families in terms of income so that they pay the same rate of tax.

I want to mention another matter which is extremely important. On this occasion the Minister rather quietly slipped in a little piece on pensions for the public service which I believe is wrong. The Minister announced that the minimum pension age would be increased to 65 for Members of the Oireachtas and officeholders elected or appointed on or after 1 April 2004. Let me give a very practical example of the impact it will have. The Minister of State at the Department of Enterprise, Trade and Employment, Deputy Michael Ahern, is in the House today. He is a junior Minister, and fair play to him. If in the reshuffle on 1 June or whenever it happens, Deputy Ahern is upgraded to the position of full Minister, and if he subsequently decides to retire, he will not be able to draw his ministerial pension until he is 65 years of age. That is a serious change in the conditions of employment of Members of this House. Deputy Peter Power has been a very fine performer in the House since he was elected recently and I admire him. Deputy Power is a young man. If, in due course, he is elevated to the position of officeholder in this House and subsequently serves perhaps 20 years and then retires, he will have to wait until he is 65 years of age to draw his ministerial pension.

The Minister did not consult with any Member of this House before announcing this measure even though a very basic element of changing people's terms and conditions of employment is they have a right to be involved, to hear about the decision in advance and to enter into negotiations on it. The Minister did not do that in relation to these measures and in not doing that he has failed miserably. I hope — and I speak particularly to backbenchers on the other side — that when this comes to the crunch Deputies will stand up and be counted because this will change the conditions of employment for many people in this House. It probably will not affect me. I do not expect I will ever be elevated. However, there will be others coming after me who will be affected.

The measure also means that persons who come into this House after we have gone will get no pension until they are 65 years of age. We have plenty of examples of young Members in this House, for example, my colleague, Deputy English, who is 25 years of age. I acknowledge that the measure will not affect him, but it will affect others who come after him. If they work in this House for 20 years from the age of 25 and then retire or lose their seats, they will have to wait a further 20 years to draw their pensions. That is not an incentive to young people to enter politics. Thinking people will stand back and say there is no way they would do it. We need to examine it.

A serious change in pension criteria for teachers is proposed. They are now being told that they cannot draw their pensions until they are 65. I must declare an interest here because I was a teacher for 20 years. I have many colleagues in the teaching profession and I see the burn-out rate of people in that profession. The question I put to this House is whether a teacher at 55 years of age who is burned out but has to stay until he or she is 65 can impart any real benefit to pupils during the ten years he or she is forced to be there. There must be a measure of being able to get out. This change, again without agreement from the teachers' unions, is something we must fight against in order to bring about real negotiations and real change in what is being pushed forward by the Minister.

The same applies to gardaí. Gardaí now have to retire at 57. The retirement age is being pushed to 60 for new entrants. I am very much in favour of gardaí continuing to work until the age of 60. My father, who was a garda, worked until he was 65, but that was in different times. At the same time, as one garda said to me, a garda at 65 might not be able to rush in and quell a riot or engage in crowd control, but he would realise when it is best to withdraw, when it best to draw his baton, or when it is best to walk away from a situation, and could advise others. They have an important role to play and it is foolish of this Government to do what it is doing.

I very much agree with my colleague. Many people who go into teaching, do so later in life, in their early to mid-20s, and would not have a full pension without full service up to the age of 65. The opportunity to make additional voluntary contributions addresses that to a certain extent. However, teachers in particular ought to be able to retire early. I worked as a teacher for many years I know the rate of attrition is very high.

Deputy McGrath has put his finger on a real issue to be addressed. That is that the alternative ought to be possible. If people in any job have their health and wish to work after the age of 65 I do not see why the benefits of increased service should not accrue to their pensions. The problem with the changes the Government is making is that the benefits can only accrue to people going into service as and from 1 April 2004. That is a retrograde step. Every person currently working in the public service, particularly teachers, should be allowed to benefit if they wish to do so. The same applies to gardaí. I know a garda who had to retire early because he had reached retirement age. He had a young family and found it practically impossible to rear them and put them through education. He had at least ten good years left during which he could have and would have contributed significantly to his profession in a profound and very important way.

The budget surplus of around €1 billion that came out of the blue at the last minute last year, about which we knew nothing, was, I believe, based on the backs of the poor, the sick and the elderly in our society. In County Louth in the past year under the current regime if people had serious cardiac problems and could not climb the stairs in their house because of their illness, they could not benefit from a disabled person's grant unless they had applied in the previous year. While there is some flexibility regarding money allocated for disability through the Department and administered by the county council, this meant that nobody in County Louth could get a disabled person's grant in that calendar year. Since then the situation has been assessed and those applications are being re-examined on the basis of extreme medical need. However, many people continue to suffer because this Government does not give adequate financing to local authorities to allow people to live out their lives in their own homes, which is infinitely preferable to living in institutional care. That is an issue which should be addressed.

The other issue is medical card limits. Many people who come to my clinic talk about the need to get a card. Many are now in low-income employment. They are working, but on low incomes which are, however, in excess of the medical card limit. Many people are devoid of the health care they so badly need which they would have if their incomes were lower or they were unemployed or on benefit, for instance. Future budgets ought to tie in the medical card limits to the average industrial wage, not inflation. They should keep pace with the average industrial wage. A recent parliamentary question I tabled revealed that the number of people in the North Eastern Health Board region who hold medical cards has reduced significantly from the mid-40% mark to 38% or 39%. That means fewer people now have a medical card and yet never was so much money available to cater for people who could genuinely benefit from such a change. Will the Minister address that?

Another issue I would like to raise is unemployment assistance and the way in which it is means-tested. I know the census of population figures show that an increasing number of people are living at home. Higher numbers of adult children are living at home with their parents because they cannot afford to buy a house, nor can they access public housing and so on. One of the real issues that concerns me is that the means of parents are taken into account in many cases where young people are assessed for unemployment assistance. In many cases this has driven them out of the family home and into living in a flat on a rent allowance and receiving the full rate of unemployment assistance. This costs the State a great deal of money when the preference of both the young people and their parents is for them to live at home. It would make a significant difference if more discretion were used in this area.

Another issue about which I am concerned is care of the elderly, especially the problem of nursing homes which was referred to by a speaker on the Government side. Nursing home care is something many people need when they cannot live in the community and the support services can no longer keep them there. If the services are not there, as often happens, they will seek to enter nursing homes. The problem, certainly in the North Eastern Health Board area, especially in County Louth and, I imagine, throughout the country, is that nursing home subvention has been severely cut back. In the past year, the only nursing home subvention given was equivalent to the limit the health board had used in the same month of the previous year. In other words, the limit given in January 2003 was based on what was given in January 2002 and so on.

The reality is that people who would be willing and able to pay for nursing home care if they received the subvention and who cannot go home because they are unwell end up in acute hospital services. This is a serious need that needs to be addressed. Somebody who needs care in a nursing home and cannot access it ends up holding an acute bed he or she does not want because the Government does not release enough money to the health boards for nursing home subventions. People qualify in every respect for such accommodation but cannot access it because the health boards are not provided with the necessary funding.

Another issue I would like to address is public transport and transport issues in Dublin generally. The Minister for Finance provided tax exemptions for park and ride facilities in a Finance Bill some years ago. I am not aware that this has been availed of to any great extent. If one approaches the city of Dublin from the north, as I do coming from Drogheda, nowhere can one avail of park and ride facilities. They are not available on the Ashbourne or Swords roads. That needs to be addressed. Perhaps it is a transport policy issue involving the Dublin local authorities; I am not sure. I know the exemptions were provided, but I have not seen themutilised.

There should be a more proactive examination of the numbers of people whose journeys originate outside the capital and who would avail of decent park and ride facilities on the northern approaches. I would be one such person. I would love to do that and cannot. Therefore, I am in one of those cars that clogs up the city every day — that is, when I do not take the train. It is not being adequately addressed and I know the Minister provided for it in the past. Perhaps he could, in reply, inform the House what he has done in this regard.

Before dealing with the specific provisions in the Bill, I wish to refer to the announcement yesterday from EUROSTAT regarding the relaxation of the Stability and Growth Pact rules and its interpretation thereof. While I welcome the changes announced, it is important to emphasise that they bring about no alteration in the basic fundamental rules of the Stability and Growth Pact. This is wrong. We all know the interpretative changes yesterday relate primarily to public private partnerships, PPPs, and how the EUROSTAT rules assess matters in terms of the availability risk and construction risk. Provided they are borne by the private sector, they will be considered as off-balance sheet accounting.

While I accept that, we must realise that only a minor proportion of our infrastructural projects and the national development plan depends on PPPs. I support them generally, but it must be accepted that the vast majority of the roll-out of the NDP is done in the normal way by traditional procurement. The changes announced will not alter the Government's ability or inability to borrow for traditional procurement methods such as the roll-out of the roads programme, the vast majority of which is under way.

I made the same point in the debate on the Finance Bill last year and on many of the money Bills throughout the year, namely, that the Stability and Growth Pact should be renamed the "rigidity and slow pact", because it is a rigid agreement. It applies equally to every country throughout Europe, no matter what its economic, financial or budgetary position may be. That is wrong. It is a "rigidity and slow pact" because it has slowed down the roll-out of our infrastructural developments for a number of years. This country is in a unique position to borrow extensively in the international arena to fund projects and accelerate their roll-out, but because of the rules as set out, it cannot do so.

A brief example will illustrate what I am trying to say. Where two companies each have a turnover of €100,000 with one having no debt and the other borrowings of €130,000, under the Stability and Growth Pact rules as they currently apply, both companies may still only borrow €3,000. That is unrealistic. The real test should be that a country should borrow up to a limit defined as a percentage of its gross domestic product, GDP. Normal commercial borrowing rules should be applied such as the ability to repay and the level of debt of the country. The Stability and Growth Pact as it now exists prevents countries such as Ireland with a low debt-GDP ratio from borrowing appropriately to roll out its infrastructure. Ireland has an infrastructural deficit and should be allowed to address that. Any private entrepreneur with little debt will be told by his or her accountant that he or she is underborrowed. He or she is trading well but is not borrowing enough to provide for the future. This is a fundamental weakness in the EU and it is something that should be addressed by Ireland over its six months in the Presidency. The Minister for Finance is aware of my views on this.

The budget provides the framework for an early return to growth. Current indications are that the policies adopted by the Minister during the past two years have proven correct and justified despite almost daily criticism from economic commentators, the Opposition and the media. The prediction this morning by PWC, whose economic forecasts are generally widely regarded, of a growth rate of up to 5% of GDP next year is higher than Government or other predictions.

We are now in a position to return to relatively high levels of growth because we adopted a prudent approach when it was obvious the world economic situation was deteriorating. However, the United States has effectively let its budgetary position get out of control. I caution in that regard. It is something over which we have no control, but it is a worry. I have a couple of points to make on the taxation provisions contained in the Bill.

The thrust of finance legislation during the past six or seven years has been to reduce taxation across every band, including corporate and capital taxes, stamp duties, personal taxes and, to a lesser extent, indirect taxes. That has been the cornerstone of our budgetary policy. It is unfortunate that, to this day, some people do not accept that that simple and straightforward strategy has worked. It has been the catalyst for economic growth in Ireland to the benefit of all. I accept it has benefited some more than others but on the whole, taken as an average, everybody has benefited from that policy. The promotion of wealth creation and risk taking is not anathema — I know Deputy Michael Higgins has strong views on this issue — to making strong in-roads into social exclusion and disadvantage. They are not mutually exclusive. One simply cannot take place without the other.

The Government does not have the money to do it.

Yes, it has.

The Government has not done it.

Deputy Ferris referred to the tax incentive schemes. Some people in this House believe the words "tax incentive schemes" are dirty. They are trotted out here almost on a weekly basis as part of allegations and accusations that there is a grand conspiracy by Members on this side of the House in line with risk-takers, developers and people willing to invest in Ireland to line their pockets. Deputies Cuffe and Ferris made such points in their contributions.

Anybody who has witnessed the regeneration of Limerick — I can only speak from experience — in the past ten years knows that the proposition made by Deputy Ferris, in particular, is demonstrably untrue. I am fortunate to have chaired the inner city renewal committee for a number of years. From my direct interaction with all the developments which have taken place in Limerick, I can say without fear of contradiction, in Limerick, that a great deal of that redevelopment would not have taken place without such incentives. To suggest we are involved in a grand conspiracy defies reality.

The inner city renewal schemes have served their purpose and it is time they were wound down, but we must ensure we do so in an orderly way. They should be phased out over a number of years. I welcome the Bill's provisions in that regard. I also welcome the provision for further tax credits for international companies willing to relocate their regional divisions, headquarters and research and development departments in Ireland. They are the most important provisions of the current budget. The international scene in terms of attracting foreign direct investment, from which my area benefits enormously, has changed in the past 18 months or two years. Every country has become aggressive in terms of marketing for foreign direct investment and of altering their taxation regimes to make them more attractive to such companies. Such relocations are fundamental to our economic growth. We must keep a watchful eye on what is happening in that regard.

Only last week I was contacted by a small company, with which I had previous dealings, informing me of its decision to relocate its global headquarters to Ireland. While tax in that regard is tax foregone, it is greatly outweighed by the benefits which we will accrue in the long term. I apologise to Deputy Michael Moynihan for eating into his time.

I welcome the opportunity to contribute to the Second Stage debate on the Finance Bill 2004. Deputy Power referred in his contribution to tax incentives, the benefits of which can be seen throughout the country. Many people ask what it costs the State to provide such tax incentives. I, too, believe their benefit to the economy outweighs the cost.

I would like to refer to a few specific issues in the short time available to me. One such issue is the provision of wind energy throughout rural Ireland. Ireland is obliged to comply with EU and international legislation in that regard. While many multinational and national companies are willing to harness wind energy across the western seaboard and throughout the country, a number of community groups and organisations, based loosely around the former dairy co-operative movement and involving farmers and landowners, have come together to construct windfarms and to try to tap into the national electricity grid. I am aware that there are many issues surrounding tapping into the national grid and the upgrading of that grid to ensure it can harness wind energy.

The Government and the Department should examine the possibility of providing tax incentives to community groups and organisations in this area. It is often felt that multinational companies come in, harness whatever they want and go. It would be beneficial if we could assist local groups wishing to invest in this area. Many co-ops in the Duhallow region have invested money in wind energy projects. Perhaps the Minister will examine the possibility of providing assistance in that regard.

Designated areas in rural Ireland have received immense assistance through the introduction of CE schemes and farm-assist payments. That is to be welcomed. Funding from CLÁR has had a massive impact on disadvantaged areas. The RAPID programme is being run in tandem with the CLÁR programme. I am not too familiar with the RAPID programme because my constituency is not classed as disadvantaged. However, the CLÁR programme has had a significant impact on disadvantaged areas and the increased funding provided under it for simple works on class three roads, footpaths and so on is welcome. Leader programmes have also been availed of together with CLÁR programmes to roll out these schemes.

I refer to community employment schemes and the policy adopted by FÁS whereby people who have been on such schemes for three years cannot be retained. I call on the Government to re-examine this policy. Community employment has become a social scheme and many people who avail of community employment in both urban and rural Ireland cannot secure employment in the mainstream workforce, particularly those aged over 55, people who live in disadvantaged areas and people with disabilities. Even though many of them have been on a scheme for three years, they should be permitted to take up a place on another scheme. This issue should be examined.

The legislation will implement a few new measures together with those announced in the budget. Every constituency is affected by the drugs issue and, like every other Member, I have visited secondary schools to speak at CSP classes. If the students interact, they give a good outline of what is happening. Sometimes it is exaggerated but, more often than not, it is accurate. The prevalence of drugs throughout the State is crazy. Drug abuse has reached epidemic proportions. We all thought in rural Ireland we were sheltered from it for many years but drug use has spread nation-wide. The issue must be taken seriously and consideration must be given to whether more drug treatment programmes or harsher penalties are needed for drug pushers. It is similar to driving the manufacture of poteen underground but the issue must be examined seriously to address the problem.

Deputy Paul McGrath referred to tax relief on farm rental income. If a farmer rents his farm to a non-family member, the legislation provides for tax relief on the first €10,000 of his income. Members have argued this discriminates against farm families and encourages farmers to rent their holdings to non-family members. However, the original relief was introduced in 1993 to encourage more parents to transfer their land to their sons and daughters rather than renting it to them. This relief must be re-examined because medium-sized and large farms that generated a significant income ten or 15 years ago are not being taken over by the next generation. While I accept the logic behind the introduction of the farm rental income provision in 1993, it should be re-examined because many parents are willing to transfer their farms to sons and daughters at an earlier age.

I have spoken on Second Stage of most Finance Bill since I was first elected in 1997 and I always sought the decentralisation of Government offices to Duhallow. I hope the Government continues the good work in that regard. The Minister has announced the decentralisation programme and OPW officials have been examining sites throughout the State, including one in Kanturk. I welcome the Government's drive to ensure the programme comes to fruition.

I welcome the opportunity to contribute to the debate. The Finance Bill has changed over the years. A few years ago it had a strength of economics to it, that is, it suggested choices and exercised discretion as to whether a choice would be made. More recently, the Finance Bill has contained a set of measures that have been retained without good reasons for doing so and this is particularly the case this year. It is to be expected for that reason that the debate should have a quiet charm to it. The Minister impresses the Fianna Fáil Party and to some extent the Progressive Democrats. It is an achievement on his part because I am not quite sure what exactly he is proposing but it has such an appeal that it transports Fianna Fáil Members into the most worthy flights of aspiration regarding the economy and society.

I assure Deputy Peter Power I have no intention of attacking people who are efficient or risk takers. The difficulty is risk taking is a serious element of economics and it must be for real. The unfortunate aspect of a number of the Minister for Finance's tax incentives is they involve no risk at all. They are a rather collapsed version of an old dog, whereby one must be totally assured there is no risk whatsoever in order to put one's toe in the water. There are many of those brave types in Ireland but I assure Deputy Power that taking risks is a wonderful aspect of economics. However, this form of economics does not underscore the legislation. There is something to be said for winding up this exercise and introducing more coherent legislation.

Many Members had their worthy attack, which is good, and then they assumed everything will happen by accident because nothing is deliberate. According to them, nobody ever systematically sets out in a pure, greedy fashion to amass as much as they like. This is never described. According to them, there are good people around the place who want to give people houses, cars and so on and it is good that such benevolent feelings are at the heart of the Government.

I will outline one example that should shock Members at some stage during the coming year. What do they think of what has happened to housing in the State? Is it something Irish, Roman Catholic and, therefore, spiritual to want to own up to 20 houses? Why should one want to keep appropriating more houses and recycling one's rents through the beneficence of the Minister, Deputy McCreevy, who has stated that he will encourage house building, etc.? Even yesterday it was stated in the newspapers that house prices will increase by 6%. Will Deputy Peter Power tell me what is good about that particular housing phenomenon?

What is good about the building of 60,000 houses?

This is where we differ. The newspapers like to suggest that the people have won again because house prices continue to rise. People like to be assured that they will increase by a further 6%. The suggestion is that this appalling, poisonous effect on social life will continue and will give rise to a series of secondary effects.

I will provide an obvious example. In the first instance, there is the notion that people must own an increasing number of houses. That is accepted and we shall leave it be. We must then take account of the effect of this on a young couple purchasing a house. We are aware that both members of a couple have no choice and are obliged to work to pay a basic minimum price for a house. We also know that both have less time to spend with their children. That is a fact. Many parents must deal with the logistical business of delivering their children to school, etc., each morning and collecting them each evening.

I wish to raise a specific question because I want to see if there is some tolerance for it at this time. In many circles there is no tolerance for this type of question. At present, children have less time with their parents and vice versa. Parents must then face long journeys to and from work each day. Let us then take a simple figure — we would not have done so in first year economics because it was so obvious — namely, a person's average lifespan and the amount of time he or she spends working. Let us then ask him or her how much of his or her life is taken up with the business of purchasing a house. I am not stating that people need to purchase houses because there are those who rent and so forth. I simply draw attention to what is happening in society in respect of this circus.

Members are entitled to differ from me and they do so all the time. However, I must make the point that, if a political policy choice is made to not interfere with windfall profits in cities or with housing speculation and to allow the existence of a so-called free market — it is, of course, not a free market because it is not totally free in any economic sense — an enormous price must be paid. There is an atmosphere of self-congratulation about today. Next week there will be further speeches offering more congratulations and stating that people throughout the world envy us and are dying to be just like the Irish. I know many people who are not trying to buy houses in Ireland. I know some individuals who regard it as somewhat absurd that a house would be more expensive in Ireland, especially Dublin, than in Paris. There are people who lose the run of themselves and go on with that kind of stuff, which would be all right if it was not so vicious in terms of the effect it has on the lives of young people.

Imagine people with all their young lives ahead of them but which they must use up on the basis of having to pay the going rate for houses. This is all because of some withered people, such as some in Galway city, who want to own 15, 16 or 20 houses and who think that this is great. Is that innovative or creative or are these people risk takers? What risk-taking is involved in crawling after one property or another until it is in one's possession? It is not an admirable pastime. Let us abandon this type of behaviour.

I pay tribute to those who helped the economy. If, however, there is one flaw at its heart, it is the importance given to the building of houses. The latter affects wages, people's capacity to return to Ireland to work here and those who simply want to live normal lives.

It is about time some of my brothers and sisters in the trade union movement woke up to the fact that there has been a running down of jobs, both in terms of security and conditions. There has been a major expansion in cheap jobs. It is clear that many other things are also being done to try to wipe away some of the old securities relating to work and employees. There is a suggestion abroad that everything can be done on a temporary basis. One's life belongs to one's house and, in addition, one is seen as capable of being removed from one's work towards the end of one's life.

In the past year I have not said enough about the Tánaiste's idea that everyone should work until they are 70 years of age. Who stated that this is the reason for which we are on this planet? Who said that we should remain in work just in case the economy needs us? This concept is especially relevant to people who we are able to abuse because we can control their employment. We can say to them that they must stay at it until they drop. For what? It is because we have created some form of monument of this country that it is a great nation in which everyone works until death. People keep at it until they fall down. Would the Tánaiste not be proud of them? She should travel about meeting people who are collapsing and inform them that it is great that they did this for the economy.

The Deputy will still only be 70 if he wins the Presidency of the country and serves out a full term.

The Deputy should not refer to that particular office in this House.

Is the Deputy ruling himself out of the running?

This is the interesting point. I sense at times an intolerance about discussing any of the matters to which I have referred. We are not to discuss social issues. I can make it simple in many instances. What I am concerned about is the amount of hours we spend consciously, the number we sell to other people and the amount of service we give ourselves because other people need us.

We can have a good laugh at the concept of citizenship. The latter means that one undertakes responsibilities for other people as well as oneself but also that, if one shortened one's life, one would be able to have some free time to do all the things everyone else is doing. There is old stuff at the basis of all this, namely, that there are certain people who occupy certain unskilled jobs and who can never be allowed to have the freedom to enjoy their lives. I have said enough about this matter. However, I have more to say about providing other things by way of citizenship.

When all the people are celebrating in honour of the Minister, Deputy McCreevy, will they tell us why basic simple things for children cannot be provided? Why is it so difficult to build things like playgrounds in Ireland or to give children an opportunity to swim or play a musical instrument? It is extraordinarily difficult to provide these facilities for children, yet a mother or father listening to their children playing is one of the things that are of life. I get more pleasure from listening to my children playing the piano than from anything else. Why is it so difficult to provide these things in a country like this?

How are people managing to pay all the new charges being imposed? At the drop of a hat there is a new charge. I looked up CORI's document listing the number of people in the different poverty categories. I continually wonder how people manage. CORI categorises people with an income of €115.01 per week as being under the 40% poverty line, those with an income of €143.77 per week as being under the 50% poverty line and those with an income of €172.52 per week as being under the 60% poverty line. A short while ago I heard a Deputy say that, in time, all the boats will rise. The boats are not rising and the gaps are widening between the income levels of the top 50% and bottom 50%.

What basis have the people who are making an economic argument for suggesting that the differences between people on the various levels of income are narrowing? The difference is not only in income. There are differences in things like access to school and third level education. Free education and holidays are important as well as all the things that are about life. A comprehensive misery is being created for many people who are unable to celebrate their lives because they are short of very small sums of money. That is a tragedy. I do not care which political party brings in significant changes so long as we are enabled to have a better kind of life, so we would have time to think.

There is a tangible aggression in the country at present and we hear much old guff, such as "moving something", "bouncing something off one", "running something off one" and similar pieces of trash which people have mixed up in their language and like saying. We need to think about how we might change our society, now that we have an opportunity.

I want to be as cheerful as anybody but I do not want to accept something that is not so. If one examines the different income groups in the country one finds that people are still stuck at the bottom. It is suggested that this is the people's own fault and that after a period of time everyone will turn into something like a gent. That kind of ignorance should not be called economics.

The Minister for Finance might ask me how I would spend money. If he changed the ratio of GDP to tax by 1% it would make a difference of approximately €1.1 billion. I would do that for the sake of children's music, playgrounds and swimming and I would not see it as a big deal. However, there is no suggestion that we should do that kind of thing.

We should challenge those strange people who simply cannot have enough. These are the people who are so wealthy they cannot afford to live in Ireland anymore and have to be abroad. Is this because we would make them insecure? Are people happy about this? How does citizenship fit into this kind of residency which allows people to slide back?

I hope we soon have an opportunity to hear Mr. Don Thornhill, who suggests that we need to privatise our universities to create the standard of Harvard. I have heard Mr. Thornhill at this racket since he came back from Canada. That would be one of the last insults of all. What else would there be then? As well as giving a huge bundle for a house we would give another huge bundle for education, everything else would be privatised and we would be told that all this, which we used to enjoy by right as citizens, was being provided by people who are risk takers. It is time to prick the bubble and ask what we want to do with our good economy over the next few years.

Does Deputy Higgins not realise we are debating the Finance Bill today?

Ba mhaith liom mo chuid ama a roinnt leis an Teachta Mac Uilcin.

Is that agreed? Agreed.

Tá áthas orm tacaíocht a thabhairt don Bhille Airgeadais 2004. Aontaím le cuid mhór den mhéid atá ráite ag an Teachta Ó hUigínn. I welcome the opportunity of speaking in support of the Finance Bill 2004. I share much of the philosophy of Deputy Higgins. Nevertheless, the Bill addresses, in a constructive way, the opportunity to distribute wealth as well as we can between those who do not have and those who have. That is the purpose of taxation. It should be used as an instrument to level the playing pitch.

To have wealth we must encourage risk-taking. One hopes there is an element of real risk in business and that it is not just a soft option allowing people to rip off a system. The Bill helps in this. The limit of the business expansion scheme is increased from €750,000 to €1 million and the seed capital scheme is extended by three years. Last night, I listened to my colleague, Deputy Devins, talking about research and development, which is an essential part of industry and has been sadly lacking in our educational institutions and within industry itself. Research and development departments have been underfunded for too long. I am glad to see tax incentivisation in this area.

Because of the philosophy of the Minister for Finance, Ireland has become an attractive base for investment by Irish and foreign investors. Sections 31, 34 and 42 provide tax incentives for multinational companies to set up regional headquarters in Ireland. That too was very important. Our inflation rates have remained relatively low. We are a competitive economy where we have witnessed growth rates over the last number of years while most of Europe has suffered a downturn. There is now something of an upturn in the Irish economy.

People from abroad are coming to work here. Some 48,000 people arrived in 2001. That is a huge change from when I was a youngster, when most people had to emigrate. That change is due in some measure to the policies of the Minister for Finance, Deputy McCreevy. I would not be so partisan as to pretend that this Government or any particular Government was exclusively responsible for the growth we have witnessed, but at least we have played a part, and Deputy McCreevy has played a significant part.

One of the interesting aspects of democracy as I experienced it as a new politician is the relationship between proposition and opposition. It seems that democracy as we know it has to survive in that manner. While that may be a healthy system, objectivity suffers quite a bit, because as a Government we are expected to unquestioningly support the Bill, while the Opposition is expected to attack and to undermine.

In the interests of balanced debate, let us look at more objective commentators, such as the Central Bank winter bulletin, which says: "Public expenditure is under control. While the state of Ireland's public finances has deteriorated somewhat from the very favourable picture of some years back, they remain essentially sound." That is a word we use quite a bit in Wexford — we say someone is a "sound" man. If the economy remains sound because of this Bill, I am happy to support it. Given its objectivity, I will quote also from the ESRI winter report 2003 which states: "The underlying fiscal stance adopted in Budget 2004 is appropriate for the underlying macroeconomic conditions." Perhaps we can agree with the objectivity of the Central Bank and the ESRI.

We are a very small economy, and I was surprised to learn before I was elected, when I started campaigning, that our entire income tax take is spent on health. I worked most of my life in education. Like most other civil servants and other ordinary workers, I resented the high taxation levels and I am glad they have come down under the Minister, Deputy McCreevy. I resented them because the question was often asked: "What do we do with all the income tax?" I talked to a doctor recently who said that people would be very happy to pay a health tax if they knew that the money would be spent on health. I proposed to him quite seriously that we might call income tax the health tax, because it is exclusively spent on health. Very little is left. The reality of that situation is not always brought home.

The weaker sections of society are helped. One has to give the risk takers the opportunity to create wealth. Along with Deputy Michael D. Higgins I would be very insistent that there should be an element of risk and that there should be no rip-off. The weaker section cannot be helped if someone does not create the wealth.

Since 1997, the average industrial earner now pays 10% less than he or she did then. The income tax take — all of which is spent on health — from those on an average industrial wage or below it is now 6%. In 1977 it was 10%. There is a tax reduction of 4% for those struggling to make a living. This is how the Bill and the taxation policy have been used to help distribute wealth among the richer and the poorer.

Taxation policies should always protect employment. I remember not so long ago when it was not worth people's time working because of the high levels of taxation. In 1997 one entered the taxation system on the sum of €97.70. By 2003, that was increased to €223 per week. This Bill increases it to €246 per week. We have gone from entering the taxation system at approximately €98 to entering it at €246.

Deputy Michael D. Higgins asked about the usefulness of building 60,000 houses. The usefulness is that builders — or rather their employees — pay income tax.

The builders do not pay. The employees pay.

Deputy Burton would say, "not enough". The builders paid so much when Deputy Burton was in Government in 1977 that most of them went out of business. That would be a tragedy. We at least need to keep the builders in business.

The year 1977 was when Jack Lynch was Taoiseach. That was when Fianna Fáil bankrupted the country.

Sorry. I meant 1997. In Deputy Burton's time in Government, many builders went out of business.

The year 1977 was when the country went down the tubes.

The last time the Deputy was in power, many builders went out of business.

They did not.

We are at least keeping them in business now and paying VAT.

The boom only started.

In 1997, the economy went into recession. What the Deputy has said is a lie. It is not true.

We got an instruction today not to use the word "lie" in the Dáil.

Sin bréag mór.

Más féidir liom leanúint, it is important to have an air of reality about making it possible to create wealth so that we can help the less fortunate. This Bill has done that and will continue to do so. We now have an economy which is attractive to business and to people on social welfare. Many of our emigrants are returning home to Ireland so they can benefit from the success of the Finance Bill and the ones that preceded it.

I am delighted to have the opportunity to speak on the Finance Bill. It is a good time to be in Ireland. Listening to some of the speakers, there are times when I could get depressed at some of the comments made. I am old enough to remember another time, when our people, my family and many other families, had to leave this country because jobs or houses were not available. Today we hear complaints because we have houses, and we are asked why we want houses, or why they are being built. It is likely that not enough houses are being built.

It is truly an amazing time for Ireland. The economic growth enjoyed in this country reflects what is arguably the greatest period of prosperity in our history. If we look at emigration, which I referred to, is it not wonderful to see that our families can stay here, be educated, get jobs, and choose to emigrate if they wish, if one could call it emigration? It is only a very short time since people did not have that choice, and it is wonderful to see it.

We should appreciate all that, along with the fine leadership that has put all of Ireland on the path to peace and prosperity. When we talk about today's Finance Bill, it is difficult not to remember the six others before it, because they carefully laid the foundation for today's prosperity. How did we get there? How did we manage nearly 8% annual GDP growth throughout the 1990s? How is it that even as the Celtic tiger departs, we maintain economic growth while our cousins on the Continent are struggling for any growth at all? We created an environment that encourages investment and creates jobs. We consistently kept taxes low and that gave corporations the confidence they needed to set up shop in our country. We did not stop with big business.

Since 1997, average tax rates have fallen for all taxpayers. Citizens earning the average industrial wage pays 10% less than they did in 1997. This Bill continues the spirit of low taxation and job creation. In April 2000, the statutory minimum wage came into effect, with less than 64% being exempt from tax. This Bill will make 90% of the minimum wage tax exempt.

While maintaining a successful tax structure, the public recognised the need to maintain fiscal restraint and have the willpower to ignore the temptation of borrowing. Borrowing is a tax, and we remember another time when our national debt was at a very high rate. Today that rate is halved. We remember when we could not pay 20% interest but today interest rates are at an all-time low. That contributes a good deal.

The only real fact that matters is that 95% of employable people are working. That is a tremendous achievement. If we listened over the years to our economists, the George Lees of this country, who appear nightly on our television screens, one would think we were living in a banana republic or were on our way to it.

There is no doubt that the high interest rates in the 1980s crippled this country but we took decisive action on public finances which was not without political cost. It was the correct action to take and it was courageous, even if it was not politically popular. We intend to see through this principle but we will do so with responsibility and concern, as we have shown today.

One of the Minister's decisions in respect of this budget was to progress decentralisation. In my own county, and particularly in the west, we were fortunate to get over 300 jobs in the town of Dungarvan. Waterford city got 200 jobs. The immense benefit of that to this country's morale, forgetting about economics for a moment, was unbelievable. Already we can see the signs of preparation for that. People are now more than willing to build the offices to facilitate that move. We see people building houses, and I compliment the Minister on finally making that decision.

The Minister, Deputy McCreevy, summed up the budget and the Finance Bill best when he said that our economy already has many strengths, including a low level of indebtedness, a strong base of modern manufacturing and internationally trading services, a competitive taxation system, growing investment in publicly funded research, unrivalled international telecommunications connectivity and an ability, because of our small size, to adapt in a timely way to changing circumstances. He said our challenge is to build on these strengths to respond to the changing competitive landscape and to take advantage of the opportunities that global economic recovery will offer. I am happy to support the Bill.

Last night we had a debate on Dáil reform. The Chief Whip promised comprehensive reform——

Is the Deputy sharing his time?

Gabh mo leithscéal. I wish to share time with Deputy Cowley.

Last night the Chief Whip promised comprehensive reform and stated she wanted to improve the role of the Dáil as a law-making assembly. Today we are discussing what is probably the most important legislation of the year, yet the debate is to be cut short by a Government guillotine. That is not good enough and it is an insult to the people we represent.

Part of our job as TDs is to monitor the effect of legislation on the daily lives and livelihoods of individuals, communities and families. On that basis, this Finance Bill is another backward step on the part of the Government, another slap in the face for ordinary working people and another give-away to the wealthy in society. More workers will go into the top tax bracket as a result of this Bill and, once again, it will squeeze those working people on or below the average industrial wage. These are the people who do not qualify for a medical card and often cannot afford private health insurance. If they are struggling to make a home, they face the colossal mortgages which are the result of the Government's disastrous housing policy.

I remind previous speakers that according to the ESRI, one in five working people, 20%, are living in poverty. They are further penalised by this Bill but property speculators and landlords are rewarded once again. What kind of Government cuts rent allowance for hard-pressed tenants in the private rented sector but awards tax breaks to developers of multi-storey car parks? What kind of Government cuts back on home helps for vulnerable old people living alone but gives tax breaks to developers of hotels and holiday homes? What kind of Government presides over queues of trolleys in our public hospitals and gives tax breaks to the private health industry building private hospitals? As far as this Government is concerned, housing for cars and horses is more important than housing for people.

Like the budget, this Bill is silent on the housing issue and on health. There are no measures in it to increase the supply of social and affordable housing and nothing to address the ongoing crisis in the public health service.

The real meat of the Bill is in the sections dealing with capital allowances and tax incentive schemes. Tax reliefs for builders of hotels and holiday camps were due to run out at the end of this year but the Minister has extended the reliefs until the end of 2006. The same extension is given to the investment in holiday homes, a scheme that has funded housing inflation and made it increasingly difficult for young couples to buy their own homes in areas their families have lived in for generations.

A belated and, on the face of it, positive measure is the introduction of tax credits for businesses which invest in research and development. There is concern, however, that the way this credit is being introduced will again reward developers rather than researchers. This new tax credit now puts it up to the businesses, and there can be no excuses or remaining obstacles to investing in research and development. This, of course, is another tax break for businesses that pay corporation tax at 12.5%, far less than the 20% and 42% rates paid by most workers.

The most bizarre double standard in the Bill are the provisions for headquarters and holding companies. These are aimed at getting more multinationals to site their regional headquarters and holding companies here. It offers generous tax write-offs and get-out clauses for transnational companies which take up the scheme. The provisions must have raised a cheer in the International Financial Services Centre in Dublin's docklands because no doubt there will be many well-rewarded contracts for the companies shielded inside those palatial office blocks. It is they who will administer the complex series of transactions and company formations that will allow these companies to cash in.

One provision to be welcomed is the exemption of stamp duty on intellectual property. This will create a better environment for research and development by business. However, it touches on another important point. Why are we building this so-called enterprise economy? The usual answer from Government is that it is to create jobs but one of the consequences of tax exemptions in all these areas is that someone somewhere must pay tax to keep all the vital public services funded and working.

One group not exempt from this tax is house purchasers who not only have to pay hugely inflated prices to buy houses but they also have to give the Government a substantial kick-back. This is the nub of the problem. Someone has to pay the tax. It is clear from the Finance Bill it will not be big business or the wealthy in Irish society. They will still have their schemes, allowances and reliefs. The rest of us will pay tax and foot the bill not only for running public services but to help subsidise the lifestyle of Ireland's rich and wealthy.

Last October we heard howls of protest from multimillionaire Denis O'Brien because people in Ireland dared to question his tax exile status which saved him €55 million in tax before he sold Esat——

People outside the House should not be mentioned.

I withdraw his name. An individual saved €55 million in tax before he sold Esat in 2000 for €2.3 million. The Minister for Finance, Deputy McCreevy, must have smiled when he heard the same individual say we were fast turning into a communist state. The Minister knows how well he has looked after that same individual and many like him. They have nothing to complain about in this Bill or in any of the Minister's previous Finance Bills.

I am pleased to contribute to the debate on this Bill. People would be prepared to pay more tax if they thought it would help those who need help. They do not want any tax increase because they are afraid of how the Government would spend the money.

There has been doublespeak from the benches opposite vocalised by the backbenchers on the Government side. We are hearing a spoon-fed line of thought which comes from spin doctors. We heard it about the emigrants and how the Government gives them millions, because of pension entitlements. If older people abroad got anything extra it was because they deserved it, not because it was their entitlement. The Government was ignorant of the large numbers who were entitled to this relief as it had underestimated the numbers involved. It was by accident and not by design that these people got their entitlements. To make a virtue out of mismanagement as the Government is doing is disingenuous and unfair and is spin of the highest order.

This is the same spin we heard when those over 70 years of age got medical cards. The Government miscalculated the number of older people in Ireland and the scheme cost much more than anticipated. No matter how much spin is put on it, the Government cannot get away from the fact that there are 200,000 people who were promised medical cards and who needed them but did not get them. The Finance Bill does nothing to help that situation,

I spoke before about the Hanly report but the response I got was not a coherent argument but pure insults. A mark of our society is how we treat our most vulnerable citizens. How can we treat our citizens equally if they cannot access the services? The acid test is when they are ill and if they cannot access the services they need. That is a serious question to which a proper answer needs to be given. However, answers are not being given.

I have always taken a national view on issues because we are a small island and need to work together to ensure things happen for the best. In County Mayo, approximately 1,600 people are waiting for neurology services. They are waiting for a service but there is no consultant in the local hospital. Those people will wait five or six years for a first appointment. One might ask whether the treatment purchase scheme would solve the problem. Having seen a consultant, one has to be on a waiting list for one year to qualify for that scheme. I know many people who died and were buried while waiting for a neurology appointment they never got. That is the reality. People die while waiting for this treatment that never comes. That is disgraceful. In the meantime, those who live in hope, particularly older men, have to get up five times a night, while they wait for an operation that may take 20 minutes. This does not make sense. If these men had money that operation would be carried out within weeks.

Two neurologists come to Mayo General Hospital and see ten new patients per month. With a list of 1,600 patients one can imagine how long it will take. There is a need for more than one neurologist in Mayo General Hospital. The waiting list is getting longer.

Where there are specialists there are no waiting lists. If people have money they will get treatment. The only way a person will get an urgent neurology appointment is if the person has a cancer obstructing the kidney outflow. I bear witness to that inequality as a GP. There is a great need to do something about this. I know about all those people who are waiting for medical cards and are on the bread line. As a result of the eligibility rules these 200,000 people cannot get medical cards. These are people who cannot access the service — the primary care service, the GP service. What kind of system is that? What kind of Finance Bill is this that does not provide for those families with children? What the Minister is talking about is something different.

A matter which the Finance Bill does not deal with is the downgrading of a number of hospitals. We will be left with 12 centres of excellence and in the other areas glorified nursing units. We are aware of this from the first Hanly plan, which is the blueprint for Hanly. The second Hanly plan has yet to come. We know from the blueprint that Nenagh and Ennis hospitals are to be downgraded. The trolleys in Ennis and Nenagh hospitals will have to join the trolleys in Limerick. We are transporting one whole tier of service to tertiary care which is much more expensive than secondary care. That does not make sense. Hanly is great in that it will employ more consultants but the consultants will have to look after those on the trolleys because there will not be enough beds. Some 3,000 beds were taken out of the system in the 1980s but were never put back.

We had a glimpse yesterday of the reality of what is to come when a child was born in an ambulance between Monaghan and Cavan hospital. Thankfully that child did not die. Children have died, such as Bronagh Livingstone. If one is going to mobilise an entire population of very ill people, say 30% of the 22,000 people who attend Ennis hospital, they will not have the service they need at the local hospital and will have to go further. Those in need of services are at risk. Let us try to imagine 30% of 22,000 people wandering around, over a year, trying to find services in Limerick hospital — which is the major hospital — or some other hospital. People would come from places such as Bantry, Roscommon and Mallow hospital seeking services. These are displaced ill people who are forced from the highways and byways who will be prone to more complications. The Finance Bill does nothing for those people.

I accept there will be centres of excellence but the trick is to try to get to the centre of excellence alive. If, for example, a person falls off a tractor in Loop Head or if a tourist is involved in a road traffic accident and has a ruptured spleen, they could be seen at Ennis General Hospital now but after Hanly those people will have to go all the way to Limerick hospital which may take two or three hours. So much for the golden hour, the international standards and the window of opportunity. If one misses that the person has a greater chance of dying and people will die. I resent the Minister saying this is scaremongering. It is the reality.

Rural doctors, in particular, are incensed about this. They see the reality and know the situation will be difficult because they do not have the necessary back-up. While roads in the west are in poor condition and there are no helicopter emergency medical services, people must go somewhere. Therefore, they will travel on the roads looking for care which is not available to them.

The Bill does not provide for the 3,000 beds required. Even if those are provided up to 2011, it will not be enough because our population is ageing. Who decided that there should be only 12 centres of excellence? Modern international consensus no longer accepts the idea that big is better but accepts instead that the patient matters. Despite that, we are taking hospitals out of the system. Ireland has only 14 hospitals per million of population whereas the UK has 24, Germany 25 and the USA 27. Putting all the non-consultant hospital doctors we need into the system would only bring Ireland up to the European average. Who is fooling who in this regard?

What will the Bill do for our ambulance service? Ambulances break down regularly in County Mayo and one recently broke down a mile from my door. This is because half the ambulances in the Castlebar area are very old and have approximately 200,000 miles on the clock. The ambulance service has excellent staff, including emergency medical technicians who do a wonderful job. However, their hands are tied behind their backs by defective equipment and the large area they must cover. The Western Health Board area has a lower number of ambulance stations than other health board areas of similar size and does not have enough 24-hour bases which are needed to provide adequate cover.

It is recognised that all citizens should be within a 20 mile radius of the nearest ambulance station. However, the catchment area of the Western Health Board ambulance service has many areas which do not meet such a criterion, a situation unique nationally. The region has the dubious distinction of having many of its people more than 20 miles from an ambulance station. There is an urgent need for the provision of three new ambulance stations at Achill, Tuam and Castlerea. While this requires funding from the Department of the Environment, Heritage and Local Government, the Finance Bill does not provide it. It should be made available or an inequitable situation will arise.

Why does this situation arise in the west? When I discuss the area in the House, some Members say that I am being very parochial. Nevertheless, I am in the House to raise the issue of the west and represent those who elected me. While I take a national view as often as I can, I must speak for my constituents. They do not care how unpopular the subject of the west is with anybody in this House. I will represent those who elected me because that is what I was elected to do.

I was insulted by the comments of the Minister for Health and Children that anybody discussing the Hanly report or acute hospital services is in some way scaremongering. People will be forced to go to faraway institutions. General practitioners are especially upset because they know what is happening. They believe the patient should be centre stage, which is in line with international thought in the UK, the USA and elsewhere. However, the current situation is anti-rural, anti-person and against any form of equality.

The Minister for Health and Children cannot blame anybody for considering all options. If he persists with an ill-informed and ill conceived plan, he will have to bear the consequences. People are concerned and that is why hospital action groups are forming. They are doing so with the support of organisations such as rural doctors' groups and others, and they are prepared to work to ensure that the Minister changes his mind in this regard.

All that the Minister for Health and Children could say about such groups was that they were scaremongering and that it was all about fielding candidates for the local elections. I have no reason to suppose that candidates will ever be put up. However, if they were — I emphasise "if" — it would be because the Minister simply carries on bald-headed with this incorrect approach. We are wallowing at the bottom in this regard.

West Mayo, the most deprived area in Ireland, needs a scheme such as the tax incentive scheme for Shannon yet there is nothing like it in the Bill. I hope for good news on the western air corridor as that would be an extremely important development. The Bill does nothing for the defined revenue funding scheme to allow social housing projects to realise their full potential. In addition, there should be a special allowance for those who need sheltered housing but are ineligible for it.

I commend and compliment the Minister on the introduction of the Finance Bill and hope it has a speedy passage through both Houses of the Oireachtas. Since taking over as Minister for Finance, Deputy McCreevy has brought fresh thinking to his Department, and he and his Government colleagues are to be complimented on the manner in which they have run the affairs not just of the Department of Finance but of Government.

It is important to remember that, just over a generation ago, Ireland was seen as one of the poorest countries in the European Union. Since then, by taking full advantage of what was on offer from the Union and by getting to grips through various methods, of which social partnership was one of the most important, with the difficulties being experienced at home, Ireland has come from being seen by some international commentators as effectively a type of banana republic to being a country of which we as legislators and citizens can be proud.

The Economist recently stated: "Ireland's economic miracle has seen that country transformed into one of the most up-to-date countries in the European Union". Comments which I believe were made yesterday by leaders of some of our partner EU member states to the effect that Ireland should now stop looking for assistance from the European Union are indicative of how they view the progress we have made over the past 15 to 20 years. We should not be seen as the one member state which continually goes out, cap in hand, and seeks assistance. We have reached a stage where within two years we will be net contributors to the Union. It is important also that we are respected as good Europeans in assisting new member states when they join the Union on 1 May.

According to the OECD, Ireland has out-performed all industrial economies over the past decade. The economy continues to be one of the leading economic growth performers in the industrialised world. In the five years preceding 2002, Ireland's average annual growth was more than three times that of the European Union and OECD countries and one of the highest anywhere. Even in the context of a global economic slowdown, Ireland's projected growth over the next few years will still be well ahead of some of our OECD partner countries. This will maintain Ireland's position as one of the world's growth leaders.

The economy has notched up five successive years of stunning economic performance due in no small measure to the management of the Minister for Finance and the Government. No other European country has been able to match its outstanding results in a variety of dimensions. Ireland is now a trading nation with an increasingly positive outlook. A recent study names Ireland as the most globalised country in the world and comments that it has the highest degree of economic integration among the developed economies. That is a long way from our position 20 or 22 years ago.

One of the greatest success stories of the economy has been the number of new jobs which have been created, in particular since 1987. In the past 12 years, employment has soared from 1.1 million to 1.8 million today. This is a staggering 700,000 extra people in employment. Economic growth, more jobs and rising living standards have resulted in the resolution of one of the country's longest standing problems, namely, emigration, which bedevilled the country since the famine in the mid-1840s. The population of Ireland in 1845-46 bled from eight million to three million. It is just recently the population has begun to increase again. The reason for this is that there are opportunities at home and people want to stay and work in the country. Anyone who was a Member of this House during the 1980s will recall the debates that took place about the numbers of people leaving our shores in droves to find employment overseas. What a contrast now to see so many young people coming back with skills, trades and talents which they learnt overseas because of forced emigration. These people have come back to this country where they have found good and gainful employment. It is to everyone's credit that this has happened.

Economic growth, more jobs and rising living standards have led to the resolution of one of our biggest problems. The exodus over the past number of years has been turned around. Irish economic growth has not just halted this trend but reversed it, bringing expatriates, most of them young, to Ireland to contribute their skills and expertise to the growing Irish economy. The country is now getting an annual inward migration of approximately 40,000. The population of the Republic is almost four million, the highest figure in more than 130 years.

Ireland's economic success over the past decade can be ascribed to a range of factors, both domestic and international, which were mutually re-enforcing. None of these would have happened but for the foresight and strong commitment during that period of the Government and the Ministers for Finance and Enterprise, Trade and Employment, in particular, and successive Taoisigh. When the right circumstances arose, Ireland was able to take full advantage of them because it had been preparing for this for a considerable time.

Ireland's entry into the 20th century, with a fast growing surge of determination to take control of its destiny and re-establish its long and proud tradition, lies at the feet of this and successive Governments. I have witnessed the two sides of the story. With success comes difficulties. One of the difficulties most of us encounter is that of infrastructure. I ask the Minister and his colleagues in Government to fast-track some of the major infrastructural projects. The Minister for Transport has identified three of the major corridors, Dublin-Belfast, Dublin-Galway and Dublin-Cork, as priority projects. In my constituency, the N9 from Dublin to Waterford is in serious need of being fast-tracked through the planning and construction process. I am fortunate to live on the north side of Carlow. I pity some of my fellow constituency TDs such as Deputy Hogan who must commute through Carlow during busy times, which takes anything from half a hour to 40 minutes. As the Minister for Finance is aware of these difficulties, I ask him to lean on his colleagues to ensure that the N9 proposal, which is part of the National Development Plan 2000-2006, gets the go-ahead and is fast-tracked. Without this, the economic success of the south east, particularly the Kilkenny and Waterford region, will be hampered by the delays caused in trying to access these areas from Dublin in particular.

Much of the economic growth achieved by Ireland over the past decade has resulted from the success in attracting overseas inward investment. Many companies have been established in the past ten years. I would encourage the Minister to try to direct some much needed investment into Carlow town. There is a state-of-the art technology park in the town, which currently has no tenants. I know the Minister has his eye on parks in Kildare but it is important that regions down the country are given an opportunity to develop. Some €14 million has been spent, with which I am sure the Minister is familiar. I am confident that in time he will ensure investment in the area.

The IDA is to be commended and complimented on its foresight and efforts in ensuring so many overseas investments came to this country. The situation in the past two years has been a little more difficult internationally but it is still in negotiations with companies. I hope the success it has achieved over 15 years will continue.

A number of speakers referred to the lack of effectiveness in the health service. However, there are areas of the health service that are a shining example of how we should go forward. One of these is the out of hours service which was piloted in my constituency and which has proved to be a huge success. It is a win-win situation. It is a win for patients in that there is a dedicated number at which they can get qualified triage nurses to give them information and advice over the phone, possibly without having to call on the expertise of the doctor on call. Many of the problems are identified and resolved by way of a simple telephone call. There is also a win for GPs who can now organise their lives so that they can have some time off. It was pointed out to me that a GP who has worked a full weekend, and might have a number of call outs, will not be on top of his profession when he goes into work on Monday to treat patients who have waited over the weekend to see him. He will not be in a position to provide the best service if he has been out on calls throughout the weekend.

The out of hours service is one area which has been a success. I hope there will be improvements in other areas of the health service. Given that it is taxpayers' money which is being used, we must get value for money. There are areas in the health service where savings and adjustments can be made in order to get better value for money.

I would like to address the issue of greenhouse gas proposals. Recently the Department of the Environment, Heritage and Local Government mandated the EPA to set targets for various industries in regard to emissions trading. The lime industry in my constituency is very concerned about the effect this will have. Industries who have made major investments in updating their plants, and who have invested in state-of-the-art facilities, find that they are not in a position to make any more savings. These could be badly affected if the proposals currently with the EPA in regard to emissions trading are not positive. As this country signed up to the Kyoto treaty, we cannot afford to be seen not to be good and honourable members. It is important to remember that none of the major producers of greenhouse gases, such as the United States, Russia and China, is a partner to this treaty. Even though they are not part of it, we must compete with them on the international scene because many of their products are exported. If there is not a level playing field they will be at a serious disadvantage. The Minister should bear this in mind when discussing the matter in Cabinet and at European level. While our European partners have signed up to it, we must look further afield to see where the competition will come from in future — countries such as China.

I welcome the opportunity to contribute on this Bill and commend it to the House.

I welcome the Minister to the House. This is the seventh Finance Bill that he has brought to the House and it may be his last — we cannot predict the future, even when the Tánaiste is organising the reshuffle, not the Taoiseach.

The concept of a low tax economy has been good for everyone and I agree with the Minister's philosophy of lowering the tax rates on personal income and capital. He is following the Fine Gael philosophy on taxation and the good work done by the Fine Gael-led rainbow coalition on corporation tax that was agreed at EU level during the 1994-97 Government. The seeds were sown then for a buoyant economy that allowed expenditure to go unchecked for a period before the last election.

To be fair to the Minister, he made no apologies for the 20% increase in public expenditure. He said afterwards that his job was to win the election. He has, however, made major strides since then to bring the nation's finances under control and we now have single digit growth in expenditure. The Minister is attempting to get better value for money, although he is not getting the co-operation he should from other Ministers. All Departments can become more efficient.

I am frustrated when I see the media concentrating on protests at Carrickmines, slugs in Kildare or delays in other infrastructural projects around the country. These projects are vital to the country but a handful of people are abusing their position to generate noise which is not in the interests of the common good. Millions of euro extra are required to pay the resultant bills. I also wonder about the role of consultants and their charges. How are they policed?

The atmosphere in 2004 is different from that of two years ago. There is a problem with infrastructure and I welcome the slight relaxation in the EU rules for Government borrowing that will allow some new projects to commence. I hope the Minister for Finance will be in a position to assist the Minister for Transport to complete the ring road extension in Kilkenny. It has been on the agenda for a long time and many commitments have been given by Fianna Fáil politicians to fast-track the project but it appears that Fianna Fáil politicians in my area do not have the ear of the Minister for Finance or any other Minister when it comes to the ring road extension. I ask the Minister to look at it personally with his colleague the Minister for Transport to see if that major piece of the infrastructural jigsaw can be added in 2004 to ensure there is proper management of the local economy.

Young people face enormous pressure in the housing market while huge sums come into the Department of Finance from housing levies and indirect taxation. The topsy-turvy development of housing policy through the Bacon reports has not stabilised the housing market for young couples. More and more of their parents' income is required to help them to get on to the property ladder. Imagination is required to assist young people in getting on to that ladder. The three bedroom semi-detached house will cost more this year as a result of the development levies imposed by the Government to find the money for sewerage, water and road services.

There is pressure in the jobs market. In 2003, we saw the highest number of redundancies recorded in the past ten years. This is due to our higher costs. We are the dearest country in Europe according to the living standards index and disposable income does not stretch as far as it did some years ago. This will become worse for people because the Finance Bill does not index link tax credits for the first time in many years.

The Minister of State at the Department of Enterprise, Trade and Employment, Deputy Fahey, understands that insurance is still a major issue for people. In spite of the insurance reform package the Tánaiste has tried to implement, there is no sign of a reduction in insurance premia for small businesses. We must be more assertive in reducing the costs for processing claims and generate more competition in this market. The only way we will get competition in the insurance market is through cross-country trading.

This Finance Bill will increase diesel charges, a retrograde step that will add further costs to employment and business. The pressure from eastern Europe and the Far East in manufacturing employment is strong enough to dissuade us from adding further stealth taxes in the form of higher diesel charges.

The research and development tax credit is welcome but it is too restrictive. The Tánaiste's investment in Science Foundation Ireland is worthwhile but we need a more liberal regime to attract more research and development investment from the private sector and from foreign companies. The challenge in competitiveness was brought to the attention of the Government in 2001 but all we have seen since are stealth taxes and indirect taxes on employers. We are not fast-tracking infrastructural investment and we are not strong enough in research and development to have a meaningful impact on diversification in projects. Commercialisation of research and development is the way forward.

I welcome the extension of reliefs for urban renewal schemes. They played a major role in getting rid of the blight of derelict sites and built up many of the core centres in our towns and cities. The town renewal scheme should be reviewed, however, because it is too restrictive. The reintroduction of a proper renewal scheme would go a long way to helping communities that wish to help themselves in building on the great work done in the 1980s and 1990s. Tidy towns groups and community organisations made the best use of the fund to ensure towns and villages were pleasing to the eye and it generated activity in the local community.

The Hanly report calls for the downgrading of many county hospitals. There are centres of excellence but there must also be general hospitals like the one in Kilkenny. The threat in the Hanly report will be resisted in every local community.

This Finance Bill has been introduced in a different context from previous Finance Bills because of the pressures people face. Those pressures should be examined before the budget in 2005 so the Government can reduce the costs faced by people and ensure that the cost of living is more compatible with household incomes.

The Bill has been described as a minimalist exercise. It is the shortest of the Finance Bills, at 160 pages, introduced during the Minister's time in office. Its most notable provisions relate to tax reliefs The Minister has followed through on his budget promise to extend a range of property reliefs until mid-2006 despite the fact that after the introduction of last year's budget and Finance Bill he received many plaudits when he said he would scrap them. I welcome the extension of the urban and rural renewal schemes — we do not benefit from the rural renewal scheme in Kerry, but we should. These schemes are important in generating economic activity in rural areas, including in the west, and go some way towards offsetting the obvious differences between the east and west of the country. The film relief scheme was also extended.

The Minister responded to calls over a number of years from business and tax advisers to change the legislation to encourage holding companies and corporate headquarters to establish here. A generous package of changes should allow Ireland to compete with other locations, particularly the Netherlands, to attract the European headquarters of major multinational operations.

A similar provision to attract high profile investment in research and development is behind the new tax credit in this area, although the initial reaction of business was rather cool and not over-enthusiastic. Nevertheless, the Minister could improve the provision on Committee Stage and make it more attractive.

There is not much more in the Bill than what was announced on budget day. The Revenue Commissioners are to be given new powers to examine the records of foreign subsidiaries of Irish financial institutions to underpin their existing trawl in this area.

I wish to refer to a few specifics in the Bill and to suggest a few amendments. When I was Minister of State at the Department of Agriculture some years ago, land policy was one of my areas of responsibility. I introduced proposals on land leasing and I improved the existing arrangement substantially. That was the first time we tied it into the taxation system. I am glad the Minister has moved on this incentive and made it more attractive. The one way we will loosen up land is by exempting from taxation in so far as possible land that is leased. Because of decoupling, the flight from the land and the large number of farmers getting out of farming, a large area of land will be available for leasing, but landowners will not lease it if such revenue accruing from it is subject to tax. Therefore, this is a good provision. The Minister should also examine the social welfare system in this regard. There are many old people who have land but if they lease it, they will be penalised in terms of their old age pension payments. An exemption should also apply in that respect similar to that which I introduced in respect of REPS payments seven years ago, whereby half of a participant's REPS payment is exempt from tax.

I welcome the exemption for the film industry. I thought the tactics pursued by the Government in this area were extraordinary. On the one hand, the Minister raised various questions about film relief in response to my raising the matter on numerous occasions, including a response to an amendment I tabled to the Finance Bill 1998 while, on the other hand, the Minister, Deputy O'Donoghue, was the champion of the relief. Despite the reservations raised by the Minister on numerous occasions, he was credited with winning the argument. Therefore, the Government did not lose. It was accused, on the one hand, with removing the relief and, on the other hand, the Minister was credited with winning it back. It is strange politics that is being pursued by the Government, but is seems to be effective and obviously it is orchestrated.

While I welcome the extension of film relief from 31 December 2004 to 31 December 2008 and the capping from €10.5 million to €15 million per film, momentum has been lost in the Irish film industry. Ardmore is empty at the moment. There was a promise that "Artemis Fowl" would be shot at Ardmore, but it is still in negotiations. Damage has been done because of the uncertainty created by statements made by the Minister for Finance in this House on that whole debacle. Those of us with some connection to the film industry warned about such damage being done, but it was not heeded at that time and damage has been done.

I regret that the Minister had to leave the House because I have a number of specific amendments I would like him to include in the Bill. Under section 25(1) of the Finance Act 2003, the annual rate of writing down allowances on hotels was reduced from 15% to 4% in respect of expenditure included post 4 December 2002. However, there were exemptions, for example, in the case of "a planning application (not being an application for outline permission within the meaning of section 36 of the Planning and Development Act 2000) in respect of the building or structure, made in accordance with the Planning and Development Regulations 2001 to 2002, [and] an acknowledgement of the application, which confirms that the application was received on or before 31 May 2003 ..." There were exemptions for those categories.

I know of one such instance, in which I have an interest, a hotel in Listowel where outline permission was granted well before this date. Unfortunately, the impression was created that if full outline permission was granted that was sufficient because the legislation mentioned full outline permission made, but there is a subtle difference there. I have spoken to one of the senior officials dealing with this matter because such provision could mean the difference between having or not having a hotel in Listowel. I asked the official to examine it and give a concession in respect of outline planning permissions received prior to the cut-off point of 31 May. There are very few such projects. Any structure for which outline planning permission was granted prior to 31 May and for which full planning permission for the same building was granted prior to 31 December 2004 should be exempt.

I wish to raise the taxation allowance for inter-county footballers and hurlers, a matter I raised some time ago. I totally support the GPA's campaign to extend to inter-county footballers and hurlers the provision in the Finance Act 2002 that they should be granted an appropriate taxation allowance. They believe the allowance that was included in that Act should be structured on a broader, inclusive basis such that those who play a lead performance in other amateur sporting codes are in a position to avail of this provision. The GPA proposes a taxation allowance attributable to lead sports people, falling outside the scope of the Finance Act, who compete at a level defined, subject to certain criteria. The issue of criteria applicability is contentious.

I am aware the Minister is concerned about the term "amateur" being equally attributable to weekend golfers as to inter-county footballers. The GPA has conducted discussions with the Sports Council and it has come up with an amendment, which I will table on Committee Stage, which, in one way, would be restrictive, but in another would put in place what is deemed necessary for inter-county players, footballers and hurlers to enjoy this relief. Inter-county footballers and hurlers are now professional in every sense except that they do not get paid. They are making a lot of money for the Government through the various schemes throughout the country. They are unsung heroes and are generating massive amounts of money in the economy without receiving any benefit. The tax relief would reward them to some extent.

I will table a Committee Stage amendment on VAT for non-resident entertainers who come to Ireland. Festival organisers are liable to pay VAT at a rate of 21% on fees they pay to non-resident performers whereas performers from this country are entitled to a tax exemption. This is a major anomaly.

Like Deputy Deenihan, I support the GPA proposals. Something should be done for footballers and hurlers by way of tax relief.

I listened with interest and amazement to some of the speakers on the other side of the House who spoke about what the Government has done to attract foreign investment. They must not be aware of what has been happening over the past two to three years. The Government has totally failed to attract foreign investment and larger multinational companies are no longer encouraged to come to Ireland. In my constituency of Wexford, many of the major factories have closed and moved to eastern Europe or elsewhere, where they can avail of cheaper labour. Other factories have downgraded because they are not getting the orders from other countries, which they would have got in previous years. This is very worrying.

I know we have reduced incentives for workers but we must examine who is really supplying the labour. Deputy Hogan mentioned the cost of insurance and the phenomenon of rip-off Ireland. Fine Gael has hosted a website on this for some time and it has had many hits. One of the main issues raised by those who e-mailed the website is the cost of insurance for companies and the cost of wages. It is a matter of cost over cost every time.

I visit factories on a regular basis to see how they are getting on. As I stated, they are not receiving the orders they got five or six years ago. This is very worrying and must be addressed immediately. If we do not do so, most of our bigger multinational companies will be gone in a couple of years. Not many have come to Ireland in recent years and more have been going than coming. The IT industry provided great employment throughout the country but I am worried that we will be in major difficulty if it fails.

Other speakers referred to the distribution of wealth. When I stay in Dublin and walk back to my place of accommodation, I note that there is an unbelievable number of homeless persons on our streets. This worries me greatly. Without the great work of some of the voluntary agencies, who go on sandwich runs and deliver hot drinks to the homeless, we would be in very serious trouble. The rich are getting richer and the poor are getting poorer. I would not have to walk too far from the gates of Leinster House on Kildare Street to see homeless people sleeping in doorways and seeking shelter. They have no money to get accommodation and the hostels are full. We should consider this matter seriously. Night after night, we see that the same people are homeless.

Some Members spoke on the Hanly report, which I feel very strongly about, even though Wexford General Hospital is not yet directly involved. However, it is one of the hospitals that is to be downgraded. Waterford Regional Hospital will be the centre of excellence. It will be very sad if a pregnant woman who needs to go to hospital or a person who needs to go to an accident and emergency department must travel from Wexford to Waterford to be treated.

If we are to run a proper health care system, we should have a service in every county. Deputy Cowley stated that nursing home-type hospitals will come into being. This is exactly what will happen. If somebody has a very bad accident in Fethard in the south of my constituency or in Gorey in the north, he or she will have to travel up to 100 miles to a hospital which is meant to be a centre of excellence and that could put the person's life in danger. In the past two or three weeks, many people have died because they have not got the proper services in their general hospitals. I do not want this to happen in Wexford General Hospital. I want it to be left the way it is. I hope that when it comes to the crunch, all five Deputies in Wexford will try to save the hospital and maintain its existing services. I hope they will not be in favour of the Hanly report.

I hold clinics on a weekly basis and very often I hear people complain that they have to pay the full cost of keeping their elders in a nursing home or that the nursing home subvention is inadequate. We have carers in the home who are not being rewarded for their work. Those being cared for are not able to get any home help or perhaps they get two hours' home help per week although they need ten. Some older people are being left at home with nobody to care for them. These problems are very worrying.

During every local and general election campaign since 1986, we have been promised an extension for St. John's Hospital, Enniscorthy, which has a unit for geriatrics. I know my party was in government for four years or so at the time the extension was promised but a Fianna Fáil Government was in power for 90% of the time since then. Fianna Fáil made promises before every election and did so again after Christmas because of the upcoming local elections. The Government will tell the people of Enniscorthy that building will commence but this could be another empty promise. However, I will make sure it is honoured.

The position on the disabled person's grant and the home improvement grant from the health boards is an absolute joke. In my town of Enniscorthy, a certain woman has been waiting for a small extension to her house, including a toilet, for the past two and a half years. The health board states that it has no money, yet it underspent in the order of €6 million. I call on the Minister to incorporate the disabled person's grant and the home improvement grant, even though it might not be in his remit. Many Deputies across the House have called for this and something should be done about it soon.

Deputy Higgins spoke about the cost of housing and the fact that people are unable to get on the property ladder. As a young person, I know that people working in not so well paid jobs, with both partners working, cannot afford to get on the property ladder. VAT increases, extra development charges and other charges are worsening their position. They are going on council housing waiting lists and this is driving waiting lists through the roof. In Enniscorthy a considerable number of council houses have been built over the past two years since I was elected, but the waiting list never seems to get shorter. As a public representative I make representations on behalf of people looking for council houses and I am amazed by some of the people now looking for houses. They tell me that if they could afford to buy or build a house they would not come looking for a council house, that if they got some incentive to provide their own housing they would do so. They are given no incentive whatsoever to buy or build their own houses.

The extra charges that have come into effect over a short time since the first-time buyer's grant was abolished and the charges to be introduced in local authorities at the end of March will push many more people on to the council housing waiting lists right across the country because they will not be able to afford to build or buy their own houses. People who have already bought or built a house are being put to the pin of their collar to pay back the mortgage. Deputy Higgins was right when he said people are working long hours seven days a week, unable to see their families, to pay the bills.

The cost of living has gone up. Nowadays people cannot afford to go out to socialise because they have to pay large mortgages on their houses, whereas many years ago people went out on a Friday, Saturday or Sunday. However, now people are genuinely unable to go out for a meal with their spouses or partners because the cost of living has gone through the roof in the past few years.

Road bypasses are another hobby horse of mine. In my constituency we are waiting for three of our towns to be bypassed, Gorey, Enniscorthy and New Ross. These bypasses, as well as two rural realignments, the Rosslare Road and Moneytucker to Jamestown, have been promised by many Ministers. The completion of a bypass in 2002 was laudable. It was to be the greatest day of all prior to the general election in 2002 and the Minister for Transport was to come down to open the new road but some landowners had not been paid for their land. At present there are ten or 15 farmers involved in the Camross bypass and most of them have been paid, but there are three farmers who have not yet been paid for their land, and that case goes back to 2002. We must get our house in order and find out why these people have not been paid. The Gorey, Enniscorthy and New Ross bypasses are crucial if we are to attract factories and so on. We need to have the infrastructure to create some incentive for multinational companies to come to Wexford and many other counties.

Deputy Hogan spoke on urban and village renewal. Under the rainbow coalition comprising Fine Gael, Labour and Democratic Left, the former Minister for Agriculture, Food and Forestry, Ivan Yates, introduced urban renewal to Enniscorthy and it transformed the town. Two hotels and a swimming pool were built. The Department of Agriculture, Food and Forestry was decentralised to parts of Enniscorthy and to Johnstown Castle. All this improved the town. It is telling that we had two senior Ministers at the Cabinet table, former Deputy Ivan Yates, and Deputy Brendan Howlin, but unfortunately we have no Minister now. I call on the Government to seriously examine urban renewal and give people an incentive to improve town centres.

Village renewal is also important. There are many villages in my constituency. One is Duncormick and there are others in the Wextford, Gorey and Enniscorthy areas. If there was an incentive those villages would be improved. The Minister should seriously consider giving people, voluntary organisations, builders and so on an incentive to improve rural villages and give a boost to rural areas. It would greatly improve the landscape if there was some encouragement of village renewal.

I compliment some of the voluntary organisations and agencies, Age Action Ireland, CORI and others, on bringing to our attention the failings of the Government. There are some frightening statistics in their reports. I call on the Minister for Justice, Equality and Law Reform to look seriously at their reports because they are working on the ground and see exactly what is happening.

I am glad to have an opportunity to say a few words on this Bill. I used to take pride in the fact that I spoke on every Finance Bill, but unfortunately when the rules of the House changed it became more and more difficult to participate. Hence, one catches up occasionally.

In the context of this Finance Bill, it would be no harm to review progress to date. The Government will want to take credit for all the positive aspects and none of the blame for the negative aspects. We need to assess the economic concepts that have been pursued for the past few years. The Government states that it has a low taxation policy. That is meant to be positive because everybody is supposed to benefit. The problem is that we do not have low taxation levels because there is a multiplicity of what I would call "sneak" taxes which have been imposed by various bodies and institutions in such a way as to compensate for losses incurred by the Exchequer in the pursuit of the so-called low taxation policy.

There is another problem. We have a poor health service. We need to make up our minds what we want. I know the response from the Government side will be to ask whether we want higher taxation. My response to that is simply to ask do we want a proper health service and do we have one now. The answer is that we do not. Nor is there a possibility of one in the foreseeable future. Do we have a proper education service? Are our educationalists housed in proper schools? The Chair will be familiar with this territory. How many schools throughout the country are substandard in structure, with children sitting in corridors. School officers and boards of management must literally beg and become involved in an undignified scramble for the words from the Internet which tell them whether they are lucky or unlucky. That is another part of the downside of present economic policy. Is that good for the economy? Is that positive? To what extent does Government take responsibility for that?

In order to explore the positives Government should take full responsibility for the consequences. For example, do we have law and order? The prisons are going to be closed, according to all reports. I do not know what will happen to the prisoners. We apparently do not have law and order. There is general public recognition that there is a serious deficiency in that area. According to Government we have low taxation — or do we? We certainly do not have law and order.

Do we have housing? Does the Government care about the housing situation? Various speakers have talked about people sleeping on streets in the capital city. What about all those who are virtually homeless — the 48,000 who are on local authority housing lists? When one raises this the best the local authorities can do is count them again or they ask for a further application form to be sent in to update the file. What about all those who are not eligible to be housed by a local authority whose income is more than €32,000 per annum and who are expected to buy a house in the present market for €300,000? To what extent is the Government addressing the housing needs of the people? Its record in that area is appalling. A basic ingredient in any community and in the life of any family is the right to have a home. That has long since gone from people's grasp and for as long as this Government is in power, it will not be within their reach. There have been section 23 and other incentives of all descriptions to encourage virtually everything except the provision of houses for the first-time buyer. Why is that?

Others spoke about the disabled person's grants. Given the much-vaunted economy we have been living in over the last few years, I would have expected the Government to produce some initiatives. In the year of the Special Olympics or the year after, there should have been some initiative for people with disabilities who are applicants for disabled person's grants through the various local authorities. I would not have expected the Government to have frozen the number of grants available to such people over the last 12 months in order to make ends meet. The Government should have shown some compassion and said: "This is a deserving cause, we should be seen to be doing something for these people now, and we will do it." Not only did the Government freeze the money, it also forced the unfortunate applicants to go through a procedure that takes about a year. This procedure is time wasting, costly and frustrating. The victims are those who are least able to cater for themselves and who are dependent on society to help them out. They have been disappointed.

Previously we were a low-wage economy. Now it is the national objective to become a high-wage economy — a sophisticated group of people. This is something we have aspired to — we should always aspire to these things, of course. Now we are looking more steadfastly at the notion of the high-wage economy. However, in the last couple of years we have seen the relocation from this country to lower wage economies of several thousand jobs. These economies may well have the ability to become high-wage economies much quicker than Ireland. They may be competing with us in a couple of years as high-wage economies as well. It will not take them as long as we think. They have both the tradition and the technology to avail of opportunities now.

A number of things that have happened in this country over the last ten years need to be questioned. We need answers and we do not get them. There was a discussion in the House yesterday about the famous marina in Kenmare, County Kerry. What is there in the end? A pile of rubble. It cost €600,000 or €700,000. It was not authorised so there is much work now involved in removing the material in wheelbarrows that was used in this particular complex, for whatever reason. It was an experiment, I presume, that went wrong. We must question why it went wrong. Who supervised it? Who authorised it? We heard about that yesterday, as well. On what basis was it proceeded with? Who was fired when it did not go right? When the project had to be demolished, who was called in and told in effect: "I am sorry, but your services are no longer required — and to ensure this does not happen again, you are gone."

We had an ongoing debate about a sewerage scheme on Mutton Island in Galway, from my days on the Committee of Public Accounts and on the Joint Committee on European Affairs. Various people came forward with a good idea. Environmentalists, who may or may not have been right, came forward with a good idea, but it was not coterminous with the first one. The result was great amounts of money were spent in continuing, redrawing, delays, further delays, appeals, objections, appeals to commissions and appeals to different Commissioners. One Commissioner supported the project and another was totally opposed. In the end the unfortunate taxpayer and the Irish economy paid again.

I am glad to see my good colleague, the Minister for Finance, Deputy McCreevy in the House now.

I am delighted to see the Deputy.

He, like myself, will be familiar with the angistor vertigo, the whorl snail that held up the Kildare bypass for several years.

It cost many millions of pounds.

It cost millions. This is serious, as the Minister knows. A serious problem exists in the country. Unless it is dealt with the institutions of the State will fall into disrepute. This slug decided that he had greater rights than the people who were parked on the roadway trying to get through Kildare town. For five years or thereabouts the bypass was held up. The exact number of millions lost escapes me, but questions need to be answered. When did it become known that this little animal had to be protected and how imperative was this? What was the total cost? How was it that the project designers in the beginning were not aware of his existence? When they became aware of it, why were immediate steps not taken to ensure the delay was minimised? If these questions cannot be answered the people concerned need to be told, in effect: "I am sorry, but this is a mess and is costing millions. We must dispense with your services because we do not want a recurrence."

We also need a post-evaluation to find out where he is now.

That is the next question. It is time we looked at these things.

He is in Prosperous.

I am clear in my mind that he is not at all unique. There are several of his species all over the country——

Would he be in Leinster House?

Some of them have been in here as well.

I have looked at television over the last couple of weeks and heard Carrickmines Castle being mentioned. This is another area of public expenditure. I would have thought the planners and architects would have been aware of the ruins at Carrickmines. I am informed An Taisce was happy for the project to go ahead and gave it the all-clear. However, another problem arose and the matter went to court. I am now informed that the cost and loss to the Exchequer in terms of extra expenditure as a result of the procrastination of this element of the scheme is €50 million. We cannot allow this nonsense to continue without calling in those concerned to find out how this happened and how they propose to prevent it happening again.

I am not suggesting people should not have a right to object, rather that if objections are not well founded and the procedures have been gone through ad nauseam, there must come a time when the question of cost arises. Everyone involved in this case has had a great laugh at the expense of the Irish and European taxpayer. Something must give at some stage. I have tabled a series of questions on this matter to all Departments. We must ensure that people's right to object and counter-object are protected but such objections do not go on forever. Unless action is taken in the near future, the economy will come to a halt because no one will want to invest in Ireland. I am informed that US investors now look carefully at Ireland before locating here.

Ireland's competitiveness, or lack of it, was referred to by other colleagues and my party leader. The issues about which I have already spoken contribute in a positive or negative way to our competitiveness, or lack of it, and all are part of the extra costs borne by the taxpayer, businessman or investor. Eight years ago, Ireland was one of the most competitive countries in the world. We have come from that positive position to being among the least competitive countries. This may well be part of the strategy to achieve a high wage economy, the benefits of which I am not too sure about, but we are losing heavily in terms of competitiveness. The economic consequences of continuing on that route will be serious. I have tabled a number of questions on that issue to the Minister for Finance and am quite sure he is of the same opinion because his replies indicate that is so. However, the show goes on and we continue in the same direction.

The one minute remaining to me is not sufficient to encompass all the nasty things I would like to say about the negative elements of the economic policies being pursued by the Government. I bear no acrimony towards the Minister who is my constituency colleague. He is a decent man and I am fond of him, but there comes a time when one must call a halt to nonsense. We should call a halt to that nonsense as soon as possible. The public should take this opportunity to consider the promises made to it a year and a half ago when there was good feeling throughout the country and when people felt that, while we were not yet in Utopia, we were definitely knocking at its door. We must ask the Government when it will take the plunge, apologise to the people for its actions and provide them with an opportunity for retribution. I hope it will be sooner rather than later.

I thank all Deputies who contributed to the debate yesterday and today.

Deputy Richard Bruton emphasised the importance of a strategic approach to our economic development and there we agree. However, I do not accept his view that there is a lack of strategy in what we do or that the budget process militates against prudent economic and financial planning and reduces parliamentary scrutiny. The budget booklet contains more than 160 pages of detailed and explicit information on economic and budgetary strategy, medium and long term.

This House debates the budget, the Estimates and the different tax provisions announced in the budget and implemented by way of the Finance Bill. Deputy Bruton referred to the challenges to competitiveness, the Lisbon agenda and learning lessons from Europe. Our economic strategy is the envy of many member states and is widely praised by all the main reputable economic commentators. Reference is often made at ECOFIN and at European Commission level to lowering the tax burden on labour and capital to stimulate the EU economy and of the need to keep the ratio of public spending to gross domestic product low to allow Europe to regain competitiveness. These policy prescriptions are shared by right and left in Europe and have been already implemented by the Government.

Many Deputies spoke on various aspects of tax incentive schemes. Deputy Burton appears confused between the unacceptable practice of exploiting tax loopholes and citizens legitimately availing of explicitly designed tax incentive schemes to promote particular objectives. My track record in closing off tax loopholes stands for itself. In each Finance Bill, I have introduced measures to tackle creative attempts by tax advisers to use legislation in an unintended way. The debate on tax incentive schemes deliberately included in tax legislation for specific public policy purposes is a different one. On the one hand such schemes provide undoubted economic and social benefits. On the other, they narrow the tax base, have a cost, and inevitably are used by high earners to reduce their tax bill. A judgment must be made as to whether the advantages outweigh the disadvantages but it is misleading to suggest that availing of tax incentive schemes provided for in legislation is artificial tax avoidance. This is true whether schemes are, as described by some Deputies, good or bad.

Deputy Bruton made a series of comments on how the case for tax relief should be made, costed and assessed. However, this was not the practice when the parties opposite were last in Government. One need look no further than the seaside resorts scheme introduced by Deputy Quinn in 1995. I supported that scheme, but that relief was introduced without precise data on its potential cost. It was also extended, following extensive lobbying, from the original eight resorts announced on budget day to 15 resorts by way of amendment on Report Stage of the Finance Bill.

Various important and wide-ranging ministerial amendments were tabled on Report Stage of Finance Bills during my time as Opposition spokesperson on finance from 1995 to 1997. Also, the multi-storey car parks scheme was introduced by way of amendment on Report Stage of the Finance Bill 1995 and was extended to new areas in 1996, also on Report Stage of the Finance Bill. Similarly, 11 new enterprise areas were made eligible for special tax reliefs by way of amendment on Report Stage of the Finance Bill 1997. Many Opposition Deputies think that the various area-based schemes were of benefit to investors only. This is not the case. Several other Deputies spoke of their benefits. Last night Deputy Curran instanced the difference such a scheme made to Rowlagh, Clondalkin, and stated how much the local authority welcomed the time extension which allowed more time for projects which had required a great deal of encouragement and planning to be completed. For the information of Deputy Bruton and others, I have received extensive representations on the benefits of the extension of such schemes from Deputies on all sides of the House.

Will the Minister give way?

Yes, provided the Deputy does not take up too much time.

The Minister is making a good argument in favour of my proposal to establish a protocol to govern these schemes so that the benefits and costs can be accurately weighted. He is endorsing what I said, not rebutting it.

The benefits and costs of these schemes are always evaluated. Some of the schemes I have introduced have had tremendous benefits and others have had no benefit because they were not taken up. For example, I introduced a park and ride scheme and the following year I made it even more attractive to encourage people to take it up. However, no proposal has gone ahead. One proposal had been mentioned. It was a good scheme and, therefore, I made it doubly attractive the following year but it has not been taken up.

That is not an argument for lack of assessment of costs and benefits.

A decision must be made at a particular time to bring in the schemes I mentioned. A trait of socialist parties throughout the world is that one should evaluate and analyse beyond belief and then one eventually ends up with a scheme that is so complicated it never has an effect.

That is not true.

It is much better to make a decision based on the best advice available, implement it and then terminate the scheme when it has fulfilled its policy objective.

The Minister promised to do that in budget 2003. He said certain schemes had passed their sell by date but then he extended them for his party's supporters.

The Deputy will be aware the extension is to allow for a logical and more timely cessation of the schemes. Representations were made to me regarding the schemes by Members from all parties.

Deputy Burton asked about the background to the provisions in section 25 relating to capital allowances for hotels in cases where a building is not subject to the Planning and Development Act 2000. Last December the Irish Hotels Federation brought my Department's attention to the scenario whereby the rules for transitional relief for the hotel capital allowances were based on planning applications being made by a deadline, which meant that the relief could not apply where planning permission was not required, for example, for refurbishment works.

I agree with Deputies that better costs are needed in respect of tax relief schemes and my Department and the Revenue are working on this. I am concerned that better information on ongoing costs should be available. Tax returns for 2004 are being redesigned to require a breakdown of information, which will allow more cost information to be captured on capital allowances, where currently we have no breakdown by type.

I refer to the new research and development tax credit. Section 33 provides that a company will have to specify the relief claimed. This will allow for the capture of cost information. I am pleased with the general welcome given to the research and development tax credit by Members in all parties. While we will discuss the detail of the measure on Committee Stage, I would like to make a few comments in this regard. I do not accept the suggestion that it will not be of benefit to SMEs. The minimum of €50,000 per annum is the base level of research a company must conduct to qualify, not a minimum for the qualifying incremental amount. This is not much more than the cost of one researcher and the associated costs. If a small company spends €50,000 one year and €51,000 the next year, it will get credit on the additional €1,000.

On the separate treatment of research and development buildings, there is no question this will lead to the creation of a new property-based scheme, as a number of Members suggested. Industry representatives put it to us that in an incremental scheme such as ours, the inclusion of major capital expenditure would distort the calculation of incremental spending. The credit is only available to companies using the expenditure themselves, it is not available to passive investors or landlords. If built by a third party and rented by a company, no capital credit is available but the rental cost to the company will be included in research and development spend for calculation of the credit.

On a certification process I consider the normal self-assessment basis for companies with subsequent audit should be the appropriate course. The consensus among those we consulted was that advance certification was one of the factors that militated against the success of the previous scheme.

Deputy Richard Bruton and others suggested that there should be automatic indexation of bands and credits. Decisions on tax must be made each year in the context of the overall budgetary situation and going down the route of automatic indexation could have dangerous consequences in terms of our ability to maintain budgetary flexibility and target resources where they are most needed, as we did this year.

Deputies Richard Bruton, Noonan, Ó Caoláin and others referred to more than half of all PAYE taxpayers paying tax at the higher rate in 2004 and suggested that the Government has abandoned its policy of having 80% of income earners pay tax at no more than the standard rate. It gives the wrong impression to suggest that approximately half of all PAYE taxpayers are paying tax at the higher rate this year. If one refers to taxpayers rather than income earners, perversely, the more people exempted from tax, the higher the percentage of taxpayers paying the top rate, even if there is no increase in the numbers.

Deputy Noonan also mentioned shifting the basis for comparison. This was necessary once we moved from tax allowances to tax credits, otherwise we are not comparing like with like. Under an allowance system one does not enter the top rate band until allowances are used up while under the tax credit system the bands apply from the first euro with credit deducted afterwards.

Deputies Dennehy, O'Keeffe and others pointed to the reduction in the tax burden for those on average incomes. Since 1997 the average tax rate for a single worker on the average industrial wage has reduced by ten percentage points from 27% to 17%. In addition, it is expected that in 2004, those earning at or under the average industrial wage will contribute approximately 6% of the total income tax take. The equivalent percentage in 1997 was 14%. The figures speak for themselves.

I was asked about the change to the leasing provisions in section 35. This provision is designed to address specific issues that arise from the phasing out of the IFSC regime. There is considerable business and employment in leasing short life assets. Accordingly, 100% capital allowances are available in year one. Once the IFSC regime is fully phased out, such business will fall under the normal capital allowance regime of eight years, in which case it is unlikely business would continue to be conducted from Dublin. Allowing accounting treatment in such circumstances is still not as favourable as the current 100% capital allowance regime but it will keep Ireland competitive.

Deputy Connolly suggested that cigarette excise duty had not been increased sufficiently given the objective of discouraging smoking. All excise decisions must be considered in the budgetary context bearing in mind a number of factors, including the impact on inflation. Ireland has the second highest tax on cigarettes in the European Union.

Deputy Twomey raised the issue of tax concessions for patients in nursing homes. Nursing home expenses can be claimed as medical expenses at the marginal rate of tax. I amended the scheme to allow the expense to be claimed when paid by a family member or others on behalf of someone.

I note the welcome for the improvement in the farm leasing exemptions. However, I do not accept Deputy McGrath's suggestion that the provision is anti-family. A standard anti-abuse provision in a number of areas of the tax code is to disallow leases between connected persons.

I note the comments regarding the Revenue powers group report. I published the report before considering implementation of the recommendations to facilitate a debate on the issues raised. With regard to the issue of structures for prosecutions, also raised in that context, Members will be aware that the Government asked the Law Reform Commission to examine the question of a fiscal prosecutor and a Revenue court. The Law Reform Commission produced a consultation document in July 2003 and it will produce its final report soon. Members will find it of interest to consider the issues examined in that report, with the Revenue powers group report.

Many Members mentioned the clarification in EUROSTAT rules on accounting for public private partnerships under the Maastricht criteria. Like others, I welcome this greater clarity in how the rules will be applied. For once, however, I agree with an editorial in The Irish Times, which reminds us that whatever rules govern the calculation of the deficit for EU purposes, the need to ensure value for money in all investments remains paramount. That is sound advice indeed.

Time does not permit me to respond on all the points raised but I look forward to Committee Stage, which will offer an opportunity for a more detailed discussion.

Question put.
The Dáil divided: Tá, 71; Níl, 56.

  • Ahern, Dermot.
  • Ahern, Michael.
  • Ahern, Noel.
  • Andrews, Barry.
  • Ardagh, Seán.
  • Aylward, Liam.
  • Brady, Johnny.
  • Brady, Martin.
  • Callanan, Joe.
  • Callely, Ivor.
  • Carey, Pat.
  • Carty, John.
  • Cassidy, Donie.
  • Cooper-Flynn, Beverley.
  • Coughlan, Mary.
  • Cowen, Brian.
  • Cregan, John.
  • Davern, Noel.
  • Dempsey, Tony.
  • Dennehy, John.
  • Devins, Jimmy.
  • Ellis, John.
  • Fahey, Frank.
  • Finneran, Michael.
  • Fitzpatrick, Dermot.
  • Fleming, Seán.
  • Fox, Mildred.
  • Gallagher, Pat The Cope.
  • Glennon, Jim.
  • Hanafin, Mary.
  • Haughey, Seán.
  • Hoctor, Máire.
  • Jacob, Joe.
  • Keaveney, Cecilia.
  • Kelleher, Billy.
  • Kelly, Peter.
  • Killeen, Tony.
  • Kirk, Séamus.
  • Kitt, Tom.
  • Lenihan, Brian.
  • McCreevy, Charlie.
  • McDaid, James.
  • McDowell, Michael.
  • McEllistrim, Thomas.
  • McGuinness, John.
  • Moloney, John.
  • Moynihan, Donal.
  • Moynihan, Michael.
  • Mulcahy, Michael.
  • Nolan, M. J.
  • Ó Cuív, Éamon.
  • Ó Fearghaíl, Seán.
  • O'Connor, Charlie.
  • O'Dea, Willie.
  • O'Donnell, Liz.
  • O'Donovan, Denis.
  • O'Flynn, Noel.
  • O'Keeffe, Batt.
  • O'Malley, Fiona.
  • O'Malley, Tim.
  • Power, Peter.
  • Power, Seán.
  • Ryan, Eoin.
  • Sexton, Mae.
  • Smith, Brendan.
  • Smith, Michael.
  • Wallace, Dan.
  • Walsh, Joe.
  • Wilkinson, Ollie.
  • Woods, Michael.
  • Wright, G. V.


  • Boyle, Dan.
  • Breen, Pat.
  • Broughan, Thomas P.
  • Bruton, John.
  • Bruton, Richard.
  • Burton, Joan.
  • Connaughton, Paul.
  • Connolly, Paudge.
  • Costello, Joe.
  • Cowley, Jerry.
  • Crawford, Seymour.
  • Crowe, Seán.
  • Cuffe, Ciarán.
  • Deasy, John.
  • Deenihan, Jimmy.
  • Durkan, Bernard J.
  • English, Damien.
  • Enright, Olwyn.
  • Ferris, Martin.
  • Gilmore, Eamon.
  • Gormley, John.
  • Gregory, Tony.
  • Higgins, Michael D.
  • Hogan, Phil.
  • Howlin, Brendan.
  • Kehoe, Paul.
  • Lynch, Kathleen.
  • McCormack, Padraic.
  • McGinley, Dinny.
  • McGrath, Finian.
  • McGrath, Paul.
  • McHugh, Paddy.
  • McManus, Liz.
  • Mitchell, Gay.
  • Mitchell, Olivia.
  • Morgan, Arthur.
  • Murphy, Gerard.
  • Naughten, Denis.
  • Neville, Dan.
  • Noonan, Michael.
  • Ó Caoláin, Caoimhghín.
  • Ó Snodaigh, Aengus.
  • O'Dowd, Fergus.
  • O'Sullivan, Jan.
  • Pattison, Seamus.
  • Penrose, Willie.
  • Perry, John.
  • Quinn, Ruairí.
  • Rabbitte, Pat.
  • Ring, Michael.
  • Ryan, Eamon.
  • Ryan, Seán.
  • Shortall, Róisín.
  • Stagg, Emmet.
  • Upton, Mary.
  • Wall, Jack.
Tellers: Tá, Deputies Hanafin and Kelleher; Níl, Deputies Durkan and Stagg.
Question declared carried.