Joan Burton (Dublin West, Labour)
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I move amendment No. 1:

In page 7, before section 1, to insert the following new section:

"PART 1

Cost Benefit Analysis of Tax Expenditures

1.—The Minister shall within one month from the passing of this Act prepare and lay before Dáil Éireann a report on a cost-benefit analysis of tax expenditures provided for by this Act, setting out the costs of tax foregone, and the benefits in terms of job creation or otherwise.".

The purpose of this amendment is to ask the Minister to do what he committed to do in the debate on the Finance Bill last year and what he indicated to us would become a standard part of the Finance Bill - that is, the presentation of a cost-benefit analysis of tax expenditures provided for by the Act.

Despite the suggestion, which has been strongly made by Fianna Fáil in recent times, that tax expenditures and tax breaks for very wealthy people are in some ways being curtailed and phased out, the reality is that while there is a promise of curtailment of some tax breaks in this budget, the only tax expenditure which has been entirely removed is the tax relief on trade union subscriptions. We do not have a particular difficulty with that but people who pay subscriptions to professional associations, if their firms pay them, will continue to get full tax relief.

I am concerned that we have a number of new schemes in this budget, yet have no idea what their cost-benefit analysis is. I am disturbed that Fianna Fáil has decided to reject evidence-based policy-making in extending a major new programme of tax breaks to different private firms. We have already welcomed some of these breaks, such as those that amend investment in research and development. However, we now have a major change to what was the business expansion or BES scheme, which is now to be transformed into a new scheme. We were told that in the 2006 survey of the BES scheme there was no cost-benefit analysis but a survey of the beneficiaries of the survivors. We also got the names of the various companies. At that point, however, the Government's own advisers, Indecon, recommended that extensions to tax-incentive schemes should only be considered after evaluation of the results in a formal cost-benefit appraisal.

The purpose of this amendment is to ensure that that analysis takes place and is published within one month of the enactment of the Finance Bill. The new BITES scheme, which succeeds the former BES scheme, is designed to support innovation and employment. Those are two tax-support concepts which the Labour Party would support provided they are targeted and costed. In addition, their timespan must be clearly planned and set out.

We know that previous and current property-based tax breaks were a key part of the downfall of the Celtic tiger. The landmark Regling-Watson report on the cause of the Irish financial crisis and banking collapse, clearly stated that the crash was home made. It also said that a significant contributor to the crash was the extraordinary availability of tax breaks linked to property development and construction. Despite all the rhetoric we still have tax breaks focused on building private hospitals, even though the HSE has announced that the private hospital initiative is at an end. We have all received a significant number of representations, both from individuals who are using section 23 tax breaks, but more significantly from professional lobbyists for these breaks, including accounting and legal firms. In addition, charities have been established for the purpose of availing of private hospital tax breaks. Essentially, however, we have no costings. What we got from these organisations was a case as to why their commercial activity of selling schemes, on which they charge very high fees to those investing in them, should be continued.

There is almost no solid information explaining who are the people who currently have and would be affected by changes in section 23. The Minister gave us no such information. Individuals who have invested in one property for a pension could be very easily dealt with, as opposed to some of the schemes involved. Investors in these schemes got ripped off big time by some of the firms selling such schemes because a large amount of their putative tax saving was taken in fees they paid to professional advisers to set up and structure the financial deals. That is one of the reasons this country's economy, banks and construction boom crashed. If we want to prevent that from recurring in future there is a role for targeted tax incentives which are subject to a cost-benefit analysis. As well as having a specific timeframe, they should have a clear consideration for employment and innovation content. The Labour Party would be happy to support something like that, but this country simply cannot afford to extend tax breaks willy-nilly without any idea of the cost-benefits involved.

Last year, the Dáil voted to accept this amendment and the Minister produced an evaluation of schemes a month afterwards. There were very few hard figures in it concerning the cost-benefit analysis. There was just a summary of the lobbyists' views of what the schemes would do, together with some notes from the Revenue Commissioners and the Department of Finance. This country's tax breaks industry expects to write the Finance Bill and to make amendments to it which are favourable to the industry. Given my own background as a chartered accountant, I understand that it is a legitimate part of the roles of accountants and lawyers to provide taxation services but these schemes have brought the economy down. At this late stage, we ask that they be subjected to a cost benefit analysis to be published within a month.

I wish to speak about the transfer of the business expansion scheme to the BITE scheme. The Department of Finance and the Revenue Commissioners know that because it constitutes a state aid, it must go to the EU for examination and evaluation. This big new scheme seems extraordinary. It is very wide in its potential reach. While I agree with the objective of transforming the business expansion scheme to concentrate on innovation and employment, I suggest we should ensure it is ring-fenced to avoid a build-up of the abuses of the past, with which we are all so familiar.

I would say the Minister has known since early last autumn that he needed to change the business expansion scheme. Although the scheme was responsible for a great deal of important investment at certain stages, in its later days many clever accountants and tax lawyers were able to convert it, like everything else, into a largely property-based scheme. Many hotels availed of it. Such use of the scheme is among the reasons we ended up with a tragic over-supply of hotels. Many owners of traditional family hotels, who had made a long-term business commitment to the hotel and hospitality trade, became disadvantaged as a result and were jumped into availing of tax breaks at the end of the property boom. Their firms have been left with serious financial and structural difficulties.

I wish to comment on the system of tax breaks for business that we would like to see develop. We do not want tax breaks like those of recent years, which existed to boost the construction industry and caused the bubble to rise to an extraordinary extent before it collapsed. Equally, we do not want a system that serves as a corporate welfare scheme. We want a rigorous debate on the various schemes. We want the employment, innovation and research benefits of schemes to be clearly laid out for all to see. We want investment criteria to be in place. We want them to be targeted at investment, employment, research and innovation. That has to happen. We will need to do our business in such a way, which is implied in the memorandum of understanding with the IMF and the EU, in the future. I recommend the Labour Party amendment to the House.

Seán Barrett (Dún Laoghaire, Fine Gael)
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On a point of order, am I correct in my understanding that sections of this Bill have been grouped?

Charlie O'Connor (Dublin South West, Fianna Fail)
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Yes.

Seán Barrett (Dún Laoghaire, Fine Gael)
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What is the first grouping?

Charlie O'Connor (Dublin South West, Fianna Fail)
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In accordance with an order of yesterday, if a division is demanded on an amendment in this group, that will be put at 1.30 p.m. There will be opportunities to vote on the other sections.

Seán Barrett (Dún Laoghaire, Fine Gael)
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What are we debating now?

Charlie O'Connor (Dublin South West, Fianna Fail)
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We are debating amendment No. 1, which relates to section 1.

Seán Barrett (Dún Laoghaire, Fine Gael)
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No. What sections are we debating in this group?

Charlie O'Connor (Dublin South West, Fianna Fail)
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Sections 1 to 38, inclusive.

Seán Barrett (Dún Laoghaire, Fine Gael)
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It is a disgrace that some important sections in this group will not be debated. We will be lucky to get through two or three amendments. There will be no debate on the proposed changes to pension arrangements, for example. I am keen to draw the attention of the House to this unsatisfactory situation.

Charlie O'Connor (Dublin South West, Fianna Fail)
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The Deputy will understand that the Chair is obliged to implement the order of the day, as agreed yesterday. I remind the House that the composite questions on each group will be put at 1.30 p.m., 3 p.m., 4.30 p.m., 6 p.m. and 7.30 p.m. today.

Michael Noonan (Limerick East, Fine Gael)
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On a point of order, we are debating sections 1 to 38, inclusive. Deputy Barrett has a particular interest in the sections that relate to the reform of the private pensions regime. Is it in order for him to speak at this stage on one of the sections in this group, rather than confining his remarks to the amendment before the House?

Charlie O'Connor (Dublin South West, Fianna Fail)
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Yes, I think so.

Seán Barrett (Dún Laoghaire, Fine Gael)
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As long as it is clear.

Martin Mansergh (Tipperary South, Fianna Fail)
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Would it be better for me to reply to the points made by Deputy Burton before we move on to another subject?

Seán Barrett (Dún Laoghaire, Fine Gael)
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I have no problem with that

Michael Noonan (Limerick East, Fine Gael)
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I would like to comment on the same matter.

Joan Burton (Dublin West, Labour)
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I am happy to facilitate the Deputies. It is important that we have a brief debate on another one of my amendments, which relates to bank bonuses. I would also like us to discuss this section as a whole because I have a number of questions on the Minister's amendment dealing with the universal social charge.

Charlie O'Connor (Dublin South West, Fianna Fail)
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I understand Deputies Noonan and Costello are offering to speak on Deputy Burton's amendment No. 1. I propose to take those contributions before asking the Minister of State to respond to all three Deputies. Is that agreed? Agreed. The Chair is seeking to facilitate Members as much as possible.

Seán Barrett (Dún Laoghaire, Fine Gael)
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I thank the Chair.

Michael Noonan (Limerick East, Fine Gael)
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I want to make a few remarks on Deputy Burton's amendment. The introduction of a tax break as a lever should be available to the makers of public policy. When people get a tax break if they behave in a certain way, they are likely to behave in that way. When that course of action is more expensive, they are likely not to pursue it. The first time I heard about the use of tax breaks was in the context of efforts to encourage the redevelopment of port areas of certain American cities. Derelict parts of the port area of New York, for example, were revitalised. A beautiful urban development was facilitated principally through tax breaks. The redevelopment of old areas of infrastructure, such as railway yards, which had become obsolete was driven in that way. I have seen the huge tax-driven developments that revitalised the city of St. Louis. That was imitated here.

When I was in Government in the 1980s, the late John Boland introduced a raft of tax incentives. He was the first Minister to legislate for urban development in Ireland to be driven by tax breaks. He designated 39 acres of dereliction in my home city of Limerick. It was revitalised and rebuilt over a period of seven or eight years. Such an approach works well.

A social response is sometimes required. I recall a time when there was a huge shortage of nursing homes and nursing home beds in this country. After discussing the issue with us, the then Minister for Finance, Charlie McCreevy, introduced a tax break to encourage the supply of nursing homes. The investors came in very quickly and, for a short period, we probably reached a point at which there was a surplus of availability in nursing homes. That was driven by tax breaks. We should not dump on the concept of tax breaks as a lever of public policy because they can encourage investors to meet economic and social needs. People respond to the profit incentive.

I agree with Deputy Burton that tax breaks were carried too far in Ireland. The stimulation of building and development through tax breaks, regardless of the end product, became one of the objectives of the tax break industry. Problems arose when it was decided to allow people to write off the rent of whatever they built against their rental income elsewhere in the State. That was fatal. There was no real analysis of whether the existence of 25 houses on the banks of the River Shannon in County Leitrim was of economic benefit to the local area. How could it have had any viability in itself, if its purpose was to ensure one did not pay tax on property one rented in Dublin? That kind of cross-matching destroyed the situation.

I always thought it extraordinary that tax breaks were treated as farmers used to treat milk quota, in that it could be bought and sold separately from the farm. It was a tradeable asset. I could never understand how tax credits became a tradeable asset. In one case I know of, a building was built with capital allowances and sold to an investor who took in the rent, while the tax credits arising from its building were sold as a tradeable commodity-----

Joan Burton (Dublin West, Labour)
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Yes. Was that in Limerick?

Michael Noonan (Limerick East, Fine Gael)
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-----to somebody who had never had anything to do with building or development. It was a deal purely to reduce the person's income tax liability. It was the extension of the tax break industry that destroyed it. This has resulted in a situation in which the man and woman on the street are saying that tax breaks are a bad idea and they should all be abolished. It was in view of this that the Minister, when introducing the budget, said that all section 23 allowances and other capital allowances would be abolished immediately. I always thought that had a doubtful legal basis, because people who had entered into arrangements when investing in property were under contract, and the concept of legitimate expectation applied. There was a legitimate expectation that the arrangement would run until the end of the period for which the contract was signed.

I always thought - and I suggested at the time - that it would be a better arrangement if the Government had, because of the financial crisis and in the national interest, suspended the benefits for four years, so that in 2015, when times were better and the Exchequer could afford it, investors could again receive the benefit of the tax break. I think this would pass legal muster, and many investors would not have objected to it because rents are currently so low that they are not availing of the full tax credit anyway. Another major issue is that people have made arrangements with their banks for schedules of repayment, and the removal of the tax break would take the floor out from under these schedules. A deferral would not have done that, and it would have allowed investors to renegotiate deals with the banks.

Deputies Costello and Barrett are anxious to speak, so I will not continue. However, I ask the Minister to consider this again, as he has said he will do, and take these views into account.

Joe Costello (Dublin Central, Labour)
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I am pleased to have an opportunity of speaking on this series of amendments. It is quite a large group, covering amendments Nos. 1 to 38, but I will focus only on one or two points.

Deputy Burton referred to the tax break industry, and that is effectively what it is. At the IBEC annual forum in Tralee last year, it was stated that approximately €11 billion worth of tax reliefs are given to the private sector annually. That is an incredible amount. If we take out of this mortgage relief and so on, we are left with the three major areas of property, landlord and pension tax relief. All three of these are effectively out of control. Some people have collected enormous pension pots. We have heard that Mr. Fingleton, for example, has a pension pot of €28 million and that he may have organised tax relief on all of it. It is incredible that the man was getting all his millions virtually scot free. It is unacceptable that this has not been regulated until now.

It boggles the imagination to read, in the Minister's introductory speech on Second Stage, his comments on property-related tax expenditure. What was announced in the budget was that tax relief on such expenditure was to be abolished or substantially cut. Guess what the Government has decided now, in the intervening six weeks? The Minister stated that the provisions "will now be subject to a commencement provision which may only take effect in the next tax year following the preparation and publication of an economic impact assessment on the proposed changes". Imagine that. One would have thought that before putting it into the budget the Minister would have carried out an assessment of the proposal, which would be properly researched and published.

Having introduced the provision in the budget, the Minister now says he must do all the ground work. Where are we going? What he said was code for saying that the property tax relief industry got to him, and he has taken the provision out of the Finance Bill. What we thought was a substantial measure in December has now disappeared. What will happen now? The Minister, God help us, will not even be here another month, but he will do some research and produce a paper which will appear some time in the future. What is being proposed is outrageous.

This is the kind of thing that gives the Finance Bill a bad name - when vested interests get to the Minister in the period between the Budget Statement and the introduction of the Bill. We should be considering all property-related tax exemptions. I am not saying they should be abandoned, although by and large it is time to move away from them. Section 22 and section 23 property tax reliefs were part and parcel of the collapse of our economy and one of the reasons for the state the country is in. We should seriously consider phasing out such reliefs. A total of €11 billion is handed over by the taxpayer to various interests, largely in the form of pension-, landlord- and property-related incentives. It is not good enough. Until this is dealt with transparently, we are going nowhere. The proposed change by the Minister is a bad one, and I welcome the proposal by Deputy Burton to ensure we assess all such measures in the future so that if they do not provide decent value we can get rid of them.

There is a valuable proposal in the Finance Bill to introduce tax reliefs for improving energy efficiency in residential premises. That is very welcome. However, the total amount of relief available in a year for this is €30 million, which compares badly with the €11 billion in existing tax reliefs of various types. For a tax relief that will achieve something desirable and get some economic activity going in the building industry we are providing a measly €30 million, while we refrain from abolishing the reliefs that are going into the pockets of developers to make obscene profits. I find the Finance Bill to be obscene in this regard.

One issue that should be dealt with by the Bill is that of self-employed people who receive nothing if they lose their jobs. They are not entitled to normal social welfare payments and they have no pensions. For example, as spokesperson on transport, I am dealing with this problem as it pertains to taxi drivers. There are 27,000 taxi drivers in the State and, in the old days, they had the nest egg of the value of the taxi plate. That has disappeared. When they cease to drive their taxis, they will not have a penny for their retirement. There is no lump sum, there is nothing for them except what they might get from social welfare, which is difficult enough at present.

Taxi drivers are not the only ones facing this situation, even in the transport area. Self-employed hauliers also have no pensions. Is this not something that should be considered seriously by the Minister? Surely we should be bringing self-employed people into some kind of pension bond which would provide an incentive for them to contribute. We could use the National Pensions Reserve Fund as a mechanism to encourage something of this nature, rather than leaving such people high and dry.

Finally, I will say a word about bonuses. I was speaking, I believe, on the last day of the Dáil in December and the Minister for Finance was on the other side. The Minister for Finance said that he was going to introduce a 90% tax on all bonuses being received by the financial institutions that were subject to the banking guarantee. Those are the institutions, effectively, the State has bailed out and some of them are now nationalised. He further said, because we were discussing the Credit Institutions (Stabilisation) Bill, that he could not introduce it in that legislation, although that seemed the most relevant Bill to provide for it, as the notice was too short, but by God he was going to have his 90% tax on those bonuses in the coming year in the Finance Bill. Lo and behold, it has disappeared entirely, just like the snow we had in December. It no longer exists.

Deputies will recall we were discussing the €40 million in bonuses for AIB managers in December, that had just been announced. I understand that is due to be paid out next month. The Minister had his opportunity to act on that but he has not. Neither has he acted as regards any future bonuses. Unless the Minister comes clean and says these areas, which have the country driven mad, are rooted out then this Government and this legislation that have no credibility.

Serious issues arise in sections 1 to 38, inclusive, that need to be addressed and which should be amended in the opposite direction to that being proposed by the Minister. The Labour Party believes strongly that the areas of property tax breaks and bonuses, which have corrupted the banking sector, should be addressed in this Bill because they are live, demanding issues and have brought the country to its knees.

Charlie O'Connor (Dublin South West, Fianna Fail)
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I remind the House that section amendments, by order of yesterday, must be submitted to the House before 1.30 p.m. I am calling on Deputy Seán Barrett, to be followed by Deputies Noel Ahern and Pearse Doherty.

Seán Barrett (Dún Laoghaire, Fine Gael)
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Following on from what Deputy Costello had to say as regards people having some type of pension, I believe a system should be introduced whereby everybody contributes towards an old age pension. It is the easy to arrange. Again, we have been fiddling around with private pension funds to satisfy the failure to deal with this issue. I shall expand on that in a moment.

Everybody should have to make a PRSI payment, including the self-employed. An unemployed person should get credits, in the event, until he or she can get employment to retain his or her benefit. It is crazy that in the case of those who do not contribute the only thing they can apply for is a non-contributary old age pension. As a result of this stupid changes are being introduced here to the present approved retirement fund, ARF, system - where people cannot avail of an ARF unless they have an income of €18,000. They then have to put a lump sum into an approved minimum retirement fund, ARMF, and leave it there until they are 75. This is a crazy way of interfering with people's personal rights. None of it was mentioned in the Budget Statement. It came out of the blue and was leaked to some people in the industry.

I received this Bill on Monday, today is Wednesday and we are being asked to make major changes in respect of an ARF scheme within two days. There is no reason why this section should not be taken out and re-introduced in the finance Bill (No. 2), which I understand is under preparation within the Department of Finance. There is no loss of revenue involved, other than what was announced on budget day, so it is simple to do. I appeal to the Minister to stop messing around with these.

The then Minister for Finance, Deputy Charlie McCreevy introduced this in 1999, because the only option somebody had on retirement - given the amount of money in the fund - was either to take the benefit, if he or she was in a scheme or, if self-employed, to purchase an annuity. Annuities, by and large, die with the person, however, which means that the State gets less income tax as a result of somebody dying after the guaranteed period of five years. The funds then go back to the insurance company and no tax is paid on them. It was discovered in 1999 when this was introduced that the annuity rates were based on a male living until 81, which was totally out of order. It was a rip-off. For the first time we loosened this up and people did not like it, particularly those in the annuity market, because they were losing a great deal of revenue.

The introduction of the ARF scheme meant that the State got tax on every penny in the fund, irrespective of when a person died, because the fund would pass into his or her estate and tax would be collected. From the State's viewpoint it is far better to have people in an ARF, therefore, than in an annuity, yet the Government is now introducing changes that push people out of ARFs, and making them less attractive. Who wants to leave money in a fund until he or she is 75? Either one has a State pension or one does not.

For those who are not drawing down, the amount that they must take is increased from 3% to 5%. What is the reason for that? Very little extra tax will be collected but for those on small pensions the funds will run out quicker than normal. The whole idea of the ARF system was to make it flexible for people because, for example, people who retire sometimes might have children in full-time education or children getting married and therefore need more money in the early years of retirement as against what is required in the latter years. This gave flexibility, so that somebody could take more in the first couple of years than in the last couple of years of retirement. That flexibility is not available in annuities. I do not understand why these changes are being rushed in when there is no need for them, with the effect of upsetting this whole market.

On the question of pension funds, it is far more important to encourage people to save. We should be trying to make certain, as far as possible, within the restrictions being imposed by Ireland's membership of the European Union, to make it attractive for those funds to be invested in this country, and not outside. To do this a small levy should be imposed on such funds on an annual basis. Fine Gael, in its budget submission, recommended that 0.5% of a fund should be taken by the State. These are changes that could be made, while at the same time protecting the whole pensions industry.

In case anybody believes I have a vested interest, I was an insurance broker, but am no longer involved in that area although I happen to have a knowledge of it. What is being displayed here shows that those who are imposing these changes do not have a clue what they are doing. I ask that members of the pensions industry be into a committee of the Oireachtas where we can debate all these issues. It is for these reasons I am upset this will not get proper attention during our consideration of this Bill. I appeal to the Minister to remove this measure from the Bill and leave it until the finance (No. 2) Bill.

A large volume of money could be used for investment to create jobs. The Minister can tax it but he should not start fiddling with what people can put into their pension fund. In any case, they will pay tax when money is coming out. The idea of pensions is that one receives tax relief when putting money in and one pays tax when it is taken out. The only thing the State must worry about is the amount of money that can be taken in a lump sum. This section contains that point. I do not have great difficulty with it. I have a slight difficulty with the amounts chosen because there can be a conflict between a pension fund that is part of a pension scheme where the employee can take 1.5 times the final salary and how this compares with the lump sum under an approved retirement fund.

The Department of Social Protection was charging PRSI on payments from approved retirement funds and insists these are investment funds. That is incorrect; they are the same as an annuity and one should not pay PRSI on them. Those who are retired should not pay PRSI. The Department has now come round to the idea that one should not pay PRSI beyond the age of 66. There is no reason why they were charging PRSI because no benefit is given to the person paying PRSI.

As a result of changes in the budget, those receiving the approved retirement funds are being taxed at the January 2011 rates and are also being charged the universal social charge when the payment is from the 2010 fund. I ask the Minister of State to contact his officials to find out why one can tax someone from payments in 2010 at rates included in the Finance Bill 2011. Insurance companies tell me they are obliged to do so by the Revenue Commissioners. I fail to understand why we should have to pay tax at the new rate when the tax did not apply to the moneys earned in the previous year. This should be checked out. I appeal to the Minister of State to leave this section until the finance (No. 2) Bill.

Noel Ahern (Dublin North West, Fianna Fail)
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I was going to comment on amendment No. 1 but there is nothing wrong with it and perhaps I should not interfere when there is an obvious disagreement between the Labour Party and Fine Gael. I am on the side of Deputy Noonan. The report of Regling and Watson is being misquoted by Deputy Burton. It was made clear by Mr. Regling that every country in the world, and certainly in the EU, has tax breaks and arrangements such as this. The point concerns the extent and the level-----

Joan Burton (Dublin West, Labour)
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On a point of order-----

Noel Ahern (Dublin North West, Fianna Fail)
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I am being brief and Deputy Burton spoke at some length. The report by Mr. Regling and Mr. Watson concerns the extent, duration and level of some of the property tax breaks. I agree with Deputy Noonan that they are an important stimulus tool for a Government. Deputy Costello made the same point. The Minister of State has more or less agreed with the amendment by deferring the changes to section 23 until after the assessment. It was always the intention to carry out an assessment during the year. He has deferred the implementation until the assessment is done.

The Minister announced changes to the universal social charge. After the budget, an issue was highlighted concerning the theoretical self-employed person on €300,000. This person might have benefited from the budget. The change recommended by the Minister puts an extra charge on people over €100,000 whereas the original anomaly concerned those earning over €300,000. Self-employed people earning between €100,000 and €150,000 feel the change has overcompensated. In his closing contribution on Second Stage, the Minister for Finance referred to a document showing the different levels. I would appreciate a copy of such a document. The suggestion is that in regard to company directors or employees, the self-employed person on a salary of over €100,000 has been jumped on. A correction was needed for those earning €300,000 but the compensation has been overdone.

Charlie O'Connor (Dublin South West, Fianna Fail)
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I call Deputy Pearse Doherty.

Joan Burton (Dublin West, Labour)
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On a point of order, an amendment of mine has been accepted by the Ceann Comhairle in respect of the publication of bankers' bonuses. My other amendments were not accepted and I ask Deputy Doherty to allow me a moment to point out that amendment No. 4 reads:

In page 7, before section 1, to insert the following new section:

"PART 1

PUBLICATION OF CERTAIN BONUSES

1.—Each credit institution that is participating in the eligible liabilities guarantee scheme shall be required, within 30 days of the passing of this Act, to submit to Dáil Éireann details of the names of all of its officers, employees or contractors to whom bonuses have been paid between 30 September 2008 and the date of passing of this Act, and the amount of the bonuses in each case.".

Pearse Doherty (Donegal South West, Sinn Fein)
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I refer to the amendments in my name that have not been ruled out of order. This is an act of political codology. A number of speakers referred to the truncation of this Bill and the inadequate time allocated to it. In reality, the party finance spokespersons have facilitated this Bill in truncated form. None of the arguments I have heard were raised at the meeting with the Minister for Finance.

We must be honest. It is extremely unlikely any of the amendments tabled will be accepted. We are trying to make our position again and again to the Minister and pointing out that when this blows up in the Government's face, the record will show that we believed this to be a damaging Finance Bill for the people of the country. It will not get us out of the economic difficulties we are in.

Amendment No. 4 deals with the bankers' bonuses and it is important that we deal with it. When the budget resolutions were passed in December 2010, what priority did the Minister for Finance give to his officials? Did he tell them that bankers' bonuses were an issue? I have already pledged to introduce a scheme to tax bankers' bonuses at 90%. Did the Minister tell his officials to prioritise bankers' bonuses in view of the fact that a couple of months remained to get the Bill through? Did he tell them to prioritise the universal social charge, which takes people earning as little as €80 into the tax net?

I listened to members of Fine Gael say yesterday that they would accept the universal social charge if the threshold was increased by €1,000, which would mean people earning less than €100 would come under the application of the universal social charge.

The first amendment deals with the economic impact assessment-----

Séamus Kirk (Louth, Ceann Comhairle)
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I advise the Deputy that I am obliged to put a question to the House at 1.30 p.m.

Pearse Doherty (Donegal South West, Sinn Fein)
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I will conclude on this point. The first amendment deals with the economic impact of provisions of this Bill and how they will impact on the job creation. We have read in the newspapers of massive job losses in the retail sector. We know that they are happening already because the Minister has reduced the spending power of every citizen. I refer to the people who spend all the money they have day in, day out. The Minister has taken primarily €2 billion out of their pockets through a range of measures, brought them deeper into the tax net through the tax bands, made changes to tax reliefs, introduced the universal social charge and abolished reliefs such as the reliefs on university charges. These measures will blow up in the Government's face when the time comes.

Séamus Kirk (Louth, Ceann Comhairle)
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I ask the Deputy to co-operate with the Chair.

Pearse Doherty (Donegal South West, Sinn Fein)
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It is a disgrace and I am sure the Minister of State will acknowledge that. These are such important issues-----

Séamus Kirk (Louth, Ceann Comhairle)
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Please, Deputy.

Pearse Doherty (Donegal South West, Sinn Fein)
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-----and an opportunity is not even being given to discuss them. We will have a finance (No. 2) Bill-----

Séamus Kirk (Louth, Ceann Comhairle)
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We are obliged to implement the order of the House and I am obliged to do so.

Pearse Doherty (Donegal South West, Sinn Fein)
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-----and more than likely we will have to have a finance (No. 3) Bill to deal with this mess.

Séamus Kirk (Louth, Ceann Comhairle)
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I call Deputy Barrett and ask him to be brief.

Seán Barrett (Dún Laoghaire, Fine Gael)
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I just want to formally move the amendments in Deputy Noonan's name.

Séamus Kirk (Louth, Ceann Comhairle)
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As it is now 1.30 p.m. I am required to put the following question in accordance with an order of the Dail of 25 January: "That the amendments set down by the Minister for Finance to sections 1 to 38 and not disposed of are hereby made to the Bill and in respect of each of the said sections undisposed of, that that section or, as appropriate, the section, as amended, is hereby agreed to." Is that agreed.

Deputies:

It is not agreed.

Séamus Kirk (Louth, Ceann Comhairle)
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We will now move to Part 2, sections 39 to 51.

Pearse Doherty (Donegal South West, Sinn Fein)
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On a point of order, we have just voted on 88 amendments out of 101 in the Finance Bill. We were given one hour and 20 minutes in which to debate them. My point concerns the ordering of business in the House. It is clear that the rush in dealing with the amendments was to facilitate the Fianna Fáil leadership debate and election at 2 p.m. Fianna Fáil has put its interests and the election of its leader above democratic debate in this House. It is appalling. There are only 13 amendments remaining and six hours in which to deal with them.

Séamus Kirk (Louth, Ceann Comhairle)
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We will now deal with sections 39 to 51.

Martin Mansergh (Tipperary South, Fianna Fail)
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For the information of the House, section 18, which has been agreed to, will be amended on Report Stage.

Joan Burton (Dublin West, Labour)
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On a point of order, the Minister of State undertook to explain to us what the amendments would be. Will he at least outline, for the information of the House, the heading of the section to which he is referring? Does it pertain to bankers' bonuses being taxed at 90%, which we were promised? Will the Minister of State clarify what the amendment will be about?

Séamus Kirk (Louth, Ceann Comhairle)
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Did the Minister of State say the amendment would be introduced on Report Stage?

Martin Mansergh (Tipperary South, Fianna Fail)
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That is correct.

Joan Burton (Dublin West, Labour)
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Will the Minister of State clarify the heading?

Martin Mansergh (Tipperary South, Fianna Fail)
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It is "Self-assessment - due dates for preliminary tax and pay and file".

Joan Burton (Dublin West, Labour)
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What has happened to the promise-----

Séamus Kirk (Louth, Ceann Comhairle)
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We cannot open a debate at this point.

Joan Burton (Dublin West, Labour)
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-----that we understand the Independents extracted to have a tax of 90% on bankers' bonuses?

Séamus Kirk (Louth, Ceann Comhairle)
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We will have an opportunity on Report Stage.

Martin Mansergh (Tipperary South, Fianna Fail)
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That is coming later. The Minister signalled this morning that was coming in, and the amendment will be introduced at a later Stage.

Séamus Kirk (Louth, Ceann Comhairle)
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On Report Stage.

Martin Mansergh (Tipperary South, Fianna Fail)
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It will be done.

Séamus Kirk (Louth, Ceann Comhairle)
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We are not going to have a debate on it now.

Pearse Doherty (Donegal South West, Sinn Fein)
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As a new Deputy, I seek clarification on whether the Minister of State needs to announce to the House on Committee Stage that he intends to table an amendment on Report Stage.

Séamus Kirk (Louth, Ceann Comhairle)
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The Minister of State has just told the House he will be tabling the amendment on Report Stage.

Pearse Doherty (Donegal South West, Sinn Fein)
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Let me finish, with the indulgence of the Ceann Comhairle. The section to which the Minister of State is referring has been agreed to and voted upon. It is now concluded. The Opposition cannot refer to any amendments that it wants to table on a section that has already been dealt with in the House.

Séamus Kirk (Louth, Ceann Comhairle)
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The Minister of State advised the House he is bringing forward the amendment.

Pearse Doherty (Donegal South West, Sinn Fein)
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Did he advise the House at the proper time, namely, when we were discussing the relevant sections, that he is to table the amendment?

Séamus Kirk (Louth, Ceann Comhairle)
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He has advised the House that he will table the amendment.

Martin Mansergh (Tipperary South, Fianna Fail)
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I wish to be of assistance to the House. I am not the Minister for Finance. Rather, I am the Minister of State at the Department of Finance and the message came to me too late to handle the matter before the vote.

Pearse Doherty (Donegal South West, Sinn Fein)
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I am entitled to a clarification on the rules of the House.

Séamus Kirk (Louth, Ceann Comhairle)
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The Deputy has been advised that the amendment will be tabled on Report Stage.

Arthur Morgan (Louth, Sinn Fein)
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We cannot amend the amendment.

Michael Noonan (Limerick East, Fine Gael)
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On a point of order, I always understood the position to be that a Report Stage amendment was not in order unless the material to be contained therein had been mentioned in the course of the Committee Stage debate, but not necessarily during the debate on the section in question.

Joan Burton (Dublin West, Labour)
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By the end of Committee Stage. It is a general rule.

Séamus Kirk (Louth, Ceann Comhairle)
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As a long time Member of the House, Deputy Noonan is aware that there is provision for a recommittal.

Seán Barrett (Dún Laoghaire, Fine Gael)
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He is being helpful.

Séamus Kirk (Louth, Ceann Comhairle)
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We can facilitate the debate via a recommittal arrangement on Report Stage when the amendment is introduced. We need to move on, as we are on a tight timeframe.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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If I might assist the House on this matter, is this the pay and file issue, a stand-alone section?

Séamus Kirk (Louth, Ceann Comhairle)
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We are on Part 2, sections 39 to 51.

Arthur Morgan (Louth, Sinn Fein)
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We have moved on.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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We have moved past the pay and file issue.

Séamus Kirk (Louth, Ceann Comhairle)
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Yes.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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It is being mentioned after the fact.

Pearse Doherty (Donegal South West, Sinn Fein)
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I do not mean to hold us up, since our debate time is limited. For future reference, is it the case that, when one wants to propose an amendment on Report Stage, one does not need to announce it during the Committee Stage debate on the sections in question? Instead, one can announce it after the sections have been voted on by the Dáil. Is it in order with the rules of the House that an amendment can be announced at any time even though the section to which it refers has been debated and voted upon?

Séamus Kirk (Louth, Ceann Comhairle)
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The timing referred to is somewhat different.

Michael Noonan (Limerick East, Fine Gael)
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By the end of Committee Stage.

Pearse Doherty (Donegal South West, Sinn Fein)
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I need a clarification as to how the Ceann Comhairle is implementing the rules.

Séamus Kirk (Louth, Ceann Comhairle)
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There is a provision for a recommittal by which we can effectively have a Committee Stage debate on Report Stage, with the agreement of the House.

Michael Noonan (Limerick East, Fine Gael)
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I understand these sections address excise rates and a number of other matters. I am particularly interested in the provisions on excise rates in respect of hydrocarbon products. The Green Party's position was to seek to impose carbon taxes on various items, but differentiating between carbon taxes, excises and VAT impositions is difficult, given that all three apply to hydrocarbons. What are the proportions of excise, VAT and carbon tax levied on, for example, a litre of petrol or diesel?

I drive a diesel car and I find diesel to be more expensive now than it was last year. A barrel of oil costs approximately $90 whereas it cost $140 just prior to this time last year, yet what we pay at the pumps now is significantly more than what it was then. This despite the fact that the price of the raw material has almost dropped by 50%. In Ireland, the higher prices must be attributable to new taxes. Since the Government went easy on its excise increases, which would kick on into VAT, the new carbon tax introduced on the proposal of the Green Party must be causing the difficulty. The middle of a recession when jobs are being lost hourly is not a great time to increase the costs to industry and to employment. Does the Minister of State possess a breakdown, Schedule or other information that shows which elements of the price are excise, VAT and carbon tax?

Arthur Morgan (Louth, Sinn Fein)
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I am opposed to these sections, which will impose a significant additional cost on businesses across the State. The consequence will be a significant drop in competitiveness, which will cost us jobs. The increase in the excise on diesel is punitive.

The Government constantly preached to us that it needed to cut the minimum wage to make the economy more competitive and to help business, yet here it is doing the exact opposite, namely, increasing the cost of doing business. Jobs will fall asunder as a result. We are constantly told by the Government that it is doing something about jobs, but we never see anything concrete being done to create or save jobs. This significant gap is one of the reasons the Bill will be a disaster for the people of this island, never mind this State.

The Government also expects people who live in rural areas to pay an additional cost for fuel when they have no alternative. Large swathes of this land have no public transport, so people have no option but to have motorised transport of their own. The Bill will apply a considerable additional punishment on people in rural areas. It is unacceptable, but I will listen to the Minister of State.

Michael Ring (Mayo, Fine Gael)
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I agree with my colleague, Deputy Noonan, concerning this tax. The price of diesel and petrol is having a terrible effect on rural Ireland. I have often put on the record of the Dáil my belief that the Green Party's carbon tax is simply a tax on rural Ireland. It is not right. This winter, people needed to buy fuel to cope with the cold weather. Deputy Noonan made a valid point. If oil is $90 per barrel, the Government and the country have not dealt with the problem of the price we pay at the pumps. We are being ripped off again. It is the old thing of rip-off Ireland at every opportunity. In the week prior to the heavy snow and before we were promised bad weather, I bought two bags of salt for €7. The following week, I went to the same place on behalf of a neighbour and found that the price had increased to €7 per bag. This is the reason our country is the way it is. At every opportunity, we rip one another off.

We all want to be environmentally friendly, but a carbon tax affects people's pockets and we in rural Ireland need our cars or other vehicles. We do not have Dublin Bus, the Luas or other forms of public transport.

Michael Kennedy (Dublin North, Fianna Fail)
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The Deputy should be sure to give me metro north when he is in government.

Michael Ring (Mayo, Fine Gael)
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Last Sunday, I canvassed at a house where a child was sick. The woman needed to bring her child to Westdoc. She travelled approximately 50 miles from Carratigue to Ballina to meet a doctor, not a consultant in a hospital. Her family is in receipt of social welfare payments and cannot afford this type of cost. It is fine for the Green Party and for the Fianna Fáil Ministers. For the past 13 years, the latter have not bought a gallon of petrol or diesel, have not had a meal they needed to pay for and have not known what has been occurring in the real world.

Séamus Kirk (Louth, Ceann Comhairle)
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We are losing the focus of the debate.

Michael Ring (Mayo, Fine Gael)
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This tax is wrong. I am glad Green Party Members walked out of Government. It is just a pity they ever went in.

Martin Mansergh (Tipperary South, Fianna Fail)
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The first point to make about the rate of mineral oil taxes is that the expected yield from the increases in 2011, inclusive of VAT, is approximately €106 million. Were we not to proceed with these changes, we would need to find €106 million elsewhere. While it is correct that people in rural areas are more dependent on car and motorised transport generally, in principle the carbon tax affects everyone who drives regardless of the parts of the country in which they live.

I was asked for the details concerning the current percentage component of carbon tax.

Anyone who crosses the Border will be aware that petrol and diesel prices are still significantly higher in the North than in the South with an approximate difference of 10% to 15% in price. The carbon tax element on a litre of petrol costing €1.19 is 4.2 cent, inclusive of VAT. In the case of diesel, it is 4.9 cent on a litre of diesel costing €1.10. Despite what Deputy Ring assumes, I buy diesel and if I knew anywhere it was being sold for €1.10 a litre, I would be around there pretty smartly. In my experience of recent pricing, it is more likely to cost €1.36 or €1.38. I think the tabular information with which I have been supplied is somewhat out of date.

The total excise on petrol is 57.6 cent per litre, of which the carbon tax is 3 cent. The point being made in the information is that carbon tax is a small additional element. I suspect that the next international crisis could be an oil-related one. We have to try to be more efficient and more economical in the use of petrol. A small level of carbon tax is a financial incentive to be economical. Irrespective of this one element, it is also a case that the State needs the revenue.

Seán Barrett (Dún Laoghaire, Fine Gael)
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I wish to raise a point relating to section 46 of the Bill which makes a number of amendments to Chapter 1 of Part 2 of the Finance Act 2002, in connection with the taxation of betting and related activities. Subsection (2) provides for the repeal of sections 17(2) and (3) of the Finance Act 2009, relating to the rate of betting duty. This provision was made in 2009 which allowed the Minister to increase the betting tax from 1% to 2%. I am aware of the changes being proposed here and to which I have no objection. However, I find it extraordinary that the Minister sees it necessary to repeal this subsection. It is included as a precaution. In the event of the new system not working, it would be easy for the Minister to increase the rate from 1% to 2%.

With regard to betting tax in general, one of the most important industries outside of the cities and towns in this country is rural-based horse breeding and horse training. It supplies a great number of jobs in areas where it is extremely difficult to get employment. Regardless of whether we like it, the number of jobs is reducing. A total of 85% of foals born in this country are exported so this is a valuable export industry in itself. People will not breed horses unless there is a reasonable chance of a reasonable return in prize money when the horse is put to race. Horse Racing Ireland does not have the money to give to prize money or to provide any other grants for improving conditions at race tracks or at dog tracks in the case of the greyhound industry. Both industries are vitally important.

When Fine Gael went into Government in 1982, betting tax was 20%. In his first budget, Alan Dukes reduced the tax to 10%. Over the past number of months and years, we have heard whingeing from bookmakers about a 1% or a 2% levy. We cannot expect the taxpayer to fund racing and those involved in the industry do not want the taxpayer to have to fund it. I enjoy a bet from time to time and I have no problem paying 2% tax on my bet. For every €100 bet, I will pay €2 and 20 cent for every €10 bet. Kids will not pick up a 20 cent coin off the street nowadays and yet we are allowing an industry to collapse. We are fussing around with bookmakers who are complaining, the Paddy Powers and the Ladbrokes of this world. They go on about the jobs they are creating but they forget about the jobs being lost.

I appeal to the Minister not to include this provision as there is no reason to repeal that subsection. It should be left in the Bill in the event that a future Minister may think it necessary to increase the rate from 1% to 2%. I ask the Minister, not from a party political stand point but in the event of helping the industry as a whole, to leave the tax alone. If the new provisions do not work then there is a fall back to increase the rate from 1% to 2%. I ask the Minister of State to ask the senior Minister to agree to delete this provision on Report Stage if not now and to allow the rate stand. I welcome the efforts being made by all concerned, including those in the Department of Finance, to deal with offshore betting and the attempt to deal with the exchange betting. Great efforts have been made and I congratulate those involved.

We must ensure that an important national industry does not fall by the wayside like it has in other countries. It should be borne in mind that Ireland and Britain are among the few countries with off-course bookmakers. All other countries depend on funding racing and the greyhound industry through Tote betting. I have no vested interest other than to see an industry thriving as it is a great flagship industry for the country. Ireland is renowned for its horses and nothing should be done to damage that industry. This provision is completely unnecessary, in my view.

Joan Burton (Dublin West, Labour)
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I concur with much of what Deputy Barrett has said. Almost 30,000 people are employed on a full-time or part-time basis in various sectors of the horse and greyhound industry. I regret the complete shambles made of the arrangements over the past 13 years by Fianna Fáil and its various Government partners. We saw a parade of different vested interests all looking for an angle, all promising to deliver a high-quality product. One of the reasons many people from other countries come to Ireland is because of their interest in racing and horses. I refer to a regrettable result of the collapse of the boom which attracts media coverage. At the edges of my constituency, in Dunsink, horses, mostly palominos, are running wild. Many of them were starving during the cold spell. People may have bought a couple of horses and had them in training or in a field or paddock and now that the construction industry has collapsed some of these horses have been left almost to fend for themselves. It is not good in a country with a long reputation in the horse industry. People who emigrated from Ireland over the past century and a half and their descendants have been heavily involved in horse racing and breeding in countries to which Irish people traditionally emigrated such as the United States and Australia. The mess we have the moment is a reflection on the fact that Fianna Fáil in government caved in to vested interests with no clear insight as to what was best for the long-term future of the industry.

My perspective is that the earlier model was more attractive, with a number of tracks for horses and greyhounds throughout the country where people can go, as opposed to being bent over a computer screen consumed by the type of gambling which has a very high risk of addiction. There is potential for much money to be contributed to the national purse and ploughed back into the industry if we can get this right.

I have seen some of the Independent Deputies lobbying heavily for slot machine casinos in Ireland. The last proposal for a slot machine casino was in my constituency on the edge of the Phoenix Park, at the old Phoenix Park racecourse which had many deficiencies, as I am sure Deputy Barrett would have known. However, it was a wonderful tourism amenity for the Dublin area. The proposal collapsed and it never happened because it was for a casino with 1,600 slot machines. I want to say to people who are being persuaded that the best thing for Ireland when we are on our knees is that we have Las Vegas style slot machine casinos, that they would wipe out most of our horse racing industry and do the same to our greyhound industry.

I am probably one of the few Deputies in the House who worked in Atlantic City when I was a student. Unfortunately, people who go to slot machines are not James Bond in a dickie bow going to play blackjack or cards at a table in a casino. I have no problem with this type of operation where most of the people have quite a lot of money. However, I certainly do not want to see pensioners and people on social welfare incomes being shipped by bus to slot machine venues where they are relieved of much of their meagre income. In the United States a huge body of work is being done on the slot machine casino industry in areas of land and reserves owned by Native Americans. In South Africa at the time of apartheid, bantustans and areas such as Swaziland and Lesotho were used as venues for slot machine casinos. This is a personal view of mine and I know other views are held in the House.

In the Fingal County Council area in north County Dublin, where I was a local authority member, and in Dublin city long campaigns were fought, certainly by Labour Party politicians, to get rid of slot machines and slot machine arcades where much gambling was occurring, which was very damaging, particularly to young people and those with an addiction to gambling. People are holding up slot machine casinos as a way to save Ireland. This is a trap and we would live to regret the social impact on society. A day out at the races or a night at the dogs is a great and enjoyable experience and very attractive to visitors. We should think about how best to encourage and promote this as part of an overall development of leisure amenities and tourism in this country and leave the mega slot machine casinos. Anyone who has ever worked in a casino environment will realise that a casino with 1,500 slot machines is the size of three very large supermarkets. It is a gigantic undertaking and one would need very large bus loads of people who are very often on very low incomes to feed the machines. That is how it works.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Ba mhaith liom labhairt ar an cháin bhreise atá á ghearradh ar peitril agus díosail. Tá sé go huile agus hiomlán dírithe ar ghnáthdhaoine na tíre, ina measc an lucht gnó atá ag brath ar iompar a gcuid stuif timpeall na tíre. Tá sé go huile agus hiomlán i gcoinne aon rud a bheimid ag iarraidh a dhéanamh amach anseo chun an geilleagar a athógáil.

The Minister of State accepted that he somewhat underestimated the cost of diesel and petrol when he read out the figures. When he corrected the figure it showed the scale of the change in the price of diesel and petrol in the past year alone. This has a specific consequence for small businesses in particular and those living in rural Ireland. Those living in larger cities have a public transport network and I will come back to this. However, in huge tracts of Ireland people are totally dependent on motorised vehicles. Small businesses trying to export our goods are also dependent on trucks and vans to shuttle their goods around the country to ports. The biggest problem is that the public transport network and the train network have been reduced and undermined in recent years by a lack of proper investment. An alternative is not there for many small businesses dependent on motorised transport.

This is a very penal tax increase and it should be resisted in every way. I am not one to encourage more and more cars in the street. However, in this city the Government has reduced the subvention to the public transport networks in recent times. So much for the Green Party and its endorsement of public transport. Years of underfunding have meant that even in this city where one would expect public transport to be the most effective and efficient for everyone to use, it has not delivered and it has not been delivered upon by the Government.

Small businesses have already been screwed by the Government because additional taxes have made it more difficult for them, as have the lack of credit from the banks and the rates increases from local authorities. I do not blame local authorities. The problem with local authorities is that over the years the Government has underfunded local authorities so their only recourse in many ways is to further tax local businesses and shops.

I urge that this Bill be totally rejected. The only part of it which I support - but which should not be there - is the reduction in the travel tax. If we are to build Ireland the travel tax should be removed altogether. There should have been an opportunity to remove that tax altogether.

On a point of order, I ask that a quorum be called.

Seán Power (Kildare South, Fianna Fail)
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The seats feel okay over on this side.

Seán Sherlock (Cork East, Labour)
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I would be happy to get any seat at all, myself.

I wish to speak to section 46 and in particular the betting duties. Section 46(2) provides for the repeal of sections 17(2) and 17(3) of the Finance Act 2009 relating to the rate of betting duty. I do not understand why the Minister is seeking to repeal these sections. The Labour Party through its former spokesperson, Deputy Upton, published a very comprehensive paper entitled Raising the Stakes, in which she established a formula that would allow for a greater degree of online capture. Mr. Kavanagh from Horse Racing Ireland gave a comprehensive overview on the state of play at today's meeting of the Oireachtas Joint Committee on Agriculture, Fisheries and Food. His overview referred to a fourth consecutive cut to the horse and greyhound racing fund which has fallen from €76 million in 2008 to €57.2 million in 2011 and that this was not a sustainable position from which to develop a key industry.

Across the political divide we have as a common cause the interests of the horseracing and greyhound racing industries. However, we must ensure the provisions at paragraphs (f), (e), (d) and (a) stand up to scrutiny. I do not understand why the Government is not going after the online capture. I would like further clarification as to how these provisions will translate in real terms. I do not understand why the taxpayer through the Exchequer should continue to fund the industry directly through the provision of prize money. We all understand it is an extensive industry and support the aims of Horse Racing Ireland, but we must ensure tax is captured from the punter and anybody who makes a bet whether it is online or through bookies offices on-street.

I speak for people like Mrs. Bambury in Mallow, who is a second-generation bookmaker but who does not have an online presence. The levy is being collected and yet there are bookmakers in Mallow - which has its own racecourse - which have an on-street and online presence also. There is a disparity between the collection from the on-street presence and the lack of a collection from the online presence. We should go after the online betting and we need to go after the exchanges. It is disingenuous for certain celebrities to push the exchanges as being somehow very egalitarian in their outlook. Our interpretation is that, by their very nature, the exchanges will pay out the prize money, which is fair enough. However, it will be the Exchequer - the taxpayer - which pays the prize money at the racing stadia and so on. We need to introduce a level playing pitch here. I am not clear as to the various paragraphs. We need a proper analysis. Perhaps we should look at the French model in terms of collection. The submission by Mr. Kavanagh to the Joint Committee on Agriculture, Fisheries and Food was an in-depth one and there was an actual willingness on the part of Horse Racing Ireland to engage on the issue of capturing more revenue through more imaginative means. I ask for a response to that point from the Minister of State.

I am conscious of time. HRI made a presentation to the committee today. There are 9,530 registered breeders in Ireland, some 15% are overseas investors and 92% own fewer than five mares. There were 416 stallions at stud in 2008, of which 362 stood for a fee of €7,000 or less. We must support the industry but we must also ensure that such support does not militate against the taxpayer. The industry must find more imaginative ways to fund the prize money henceforth.

Chris Andrews (Dublin South East, Fianna Fail)
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I agree with the sentiments of Deputy Sherlock regarding Horse Racing Ireland. I understand it has been proposed to set the licence for online betting at €5,000. There is a danger this licence may facilitate cowboy online bookmakers from abroad who would come to and register in this country and signal on their websites they were registered and approved by the Irish system. There is a danger of fraud being committed by Internet cowboy bookmakers who would do damage to Ireland's reputation. Perhaps we should consider increasing that fee to €30,000 or €40,000, which would deter such bookmakers. Those in the country who work under the licence in good faith would not have any difficulty in paying that, as I understand it. We should consider increasing the €5,000 licence fee which would discourage the online cowboy bookmakers.

Dick Roche (Wicklow, Fianna Fail)
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As one who does not engage in betting online or offline, I found this debate fascinating.

Damien English (Meath West, Fine Gael)
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Is the leadership contest not a form of betting?

Dick Roche (Wicklow, Fianna Fail)
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No, it is not, at least not in our party. I was not present at the time but Deputy Barrett asked about the 2% duty provision. As I understand it, this is regarded as not required which is why it is being repealed. However, according to the answer provided to me, the opportunity of reintroducing it remains.

Seán Barrett (Dún Laoghaire, Fine Gael)
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Nonsense. I have a point of order. I appreciate the Minister of State was not present but my point was that this measure was introduced in 2009, giving the Minister power, by order, to increase the duty if he or she wishes. It should be left there and left alone. There is no reason to take it away or say it is not necessary. Who knows whether it may not be necessary in a year's time.

Brendan Howlin (Wexford, Labour)
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That was not quite a point of order.

Dick Roche (Wicklow, Fianna Fail)
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That is a valid comment but my understanding-----

Seán Barrett (Dún Laoghaire, Fine Gael)
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There is no need to do this.

Dick Roche (Wicklow, Fianna Fail)
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-----is that it can be reintroduced. I shall make the Deputy's point to the Minister when I speak to him - in whatever capacity he may return to the Chamber.

Damien English (Meath West, Fine Gael)
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There is no need to take it out.

Dick Roche (Wicklow, Fianna Fail)
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The predominant part of the discussion since I came into the Chamber has concerned how to capture the online sector. As all of us know there is no doubt this sector has grown very dramatically in recent times. It is a very difficult area to capture. Obviously, provisions and arrangements will be made by regulation. We all accept that a regulatory framework must be put in place which will deal with betting exchanges and remote or online betting. I did not entirely understand the point made by Deputy Burton. As her colleague, Deputy Sherlock, pointed out, racing is a very important part of the economy, a point often lost sight of in the debate. Even a non-punter like me can see it is a critically important industry.

The proposal in the Bill aimed to create a balance by extending a modest rate of 1% to online and telephone betting, thereby creating a levelling of the playing field notwithstanding the point made by Deputy Barrett. That is the logic behind this section of the Bill.

In reply to Deputy Andrews' concerns, obviously any form of change is open to exploitation by those who are willing to operate outside the law. Again that is a matter for regulation.

Deputy Ó Snodaigh touched on remoter or wider parts of the Bill when he spoke of the differences in the excise duties on petrol and diesel. It is an interesting point and I will reply to the Deputy through his colleagues. Petrol is generally 7 cent cheaper per litre in the Republic than it is in Northern Ireland while the differential for diesel is 20 cent. That is why there is such purchase of fuels in the South by people registered in the North. The differential is so handsome that it pays certain people to operate outside the law and become involved in illegal activities, but I am sure no Member of the House has any such connection.

Brendan Howlin (Wexford, Labour)
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Very good. We will try to deal with section 39.

Seán Barrett (Dún Laoghaire, Fine Gael)
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No, the sections are all taken together.

Brendan Howlin (Wexford, Labour)
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We will take each section as I put it. Deputies may challenge a section but the vote is-----

Damien English (Meath West, Fine Gael)
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That was not agreed.

Brendan Howlin (Wexford, Labour)
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Section 39 is not agreed.

Seán Barrett (Dún Laoghaire, Fine Gael)
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Section 39-----

Damien English (Meath West, Fine Gael)
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No, we accept the Leas-Cheann Comhairle will bring it-----

Pearse Doherty (Donegal South West, Sinn Fein)
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On a point of order-----

Brendan Howlin (Wexford, Labour)
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Deputy Doherty has a point of order.

Pearse Doherty (Donegal South West, Sinn Fein)
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We raised this at the previous sitting where all sections were taken in one vote. We understood that all sections were to be taken together. On that basis, in regard to section 39, if the Leas-Cheann Comhairle is not following what was done in the previous-----

Brendan Howlin (Wexford, Labour)
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I will tell the Deputy what the order of the House is. Each section is put separately. If a section is challenged the vote is postponed in accordance with the order of the House. In this case the group will be taken together at 3 p.m. but I must put each section separately.

Pearse Doherty (Donegal South West, Sinn Fein)
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That did not happen at the earlier stages. Must we revisit the earlier sections?

Brendan Howlin (Wexford, Labour)
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That is a matter the Deputy can take up with somebody else. I am putting the section now.

Pearse Doherty (Donegal South West, Sinn Fein)
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There is confusion. I oppose section 39.

Brendan Howlin (Wexford, Labour)
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Very good. I shall put the question formally and if there is a vote it will be deferred.

Brendan Howlin (Wexford, Labour)
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There will be a vote at 3.00 p.m. on that section.

Section 40 agreed to. SECTION 41.

Brendan Howlin (Wexford, Labour)
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The question on this section will be put at 3.00 p.m.

Damien English (Meath West, Fine Gael)
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I move amendment No. 89:

In page 186, line 11, to delete "€3" and substitute "€2".

This relates to the travel tax which my party proposed to scrap in its entirety in our alternative budget.

The Minister has reduced the charge from €10 to €7 and we propose to reduce it further to €2 or zero, if the Minister would accept that. The issue sends out the wrong message. We know tourism figures are well down, with numbers down by a couple of hundred thousand in the past year. That has a direct impact on many tourism providers, including those involved in accommodation, retail and amenities. People are under serious pressure, having built up businesses on established tourist numbers. They are falling away and nothing is being done to help these people; the opposite is occurring, which brings a direct cost on jobs and will put more people on dole queues.

In our alternative budget we put it up to the airline industries, indicating that Michael O'Leary, Aer Lingus bosses and anybody else involved should put their money into a marketing campaign and match the resources of the State in this area in order to bring in clients. If they can prove that the reduction of the tax will bring more people into this country, we will leave the tax at zero. If they fail to do so the tax can be reinstated but they should be given the chance to prove that the Government is wrong on the issue. These parties have been campaigning with an argument that the tax should not be in place, and we agree, but we challenge them to prove it.

By keeping the tax, the wrong message will go out. A person booking a flight online will see increased taxes, which will put him or her off and that person will go elsewhere. The Minister seems to believe people do not choose where to fly based on price increases of €3 or €4 but they do. When people pick a country to visit they can see the prices for flights so when taxes start building up they soon become disinterested and go elsewhere. Tourists are voting with their feet and not coming to this country for many reasons, one of which we know is the travel tax.

At this stage I ask the Government to consider reducing the figure. We would prefer to see it gone altogether but we had to put down an amendment for the €2 figure. The issue should be given some real thought as the message is wrong. We are suffering in this country because of a lack of tourists and we can really grow the sector and create jobs.

Pearse Doherty (Donegal South West, Sinn Fein)
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Deputy English made a very coherent address outlining reasons for not having an airport travel tax. I concur with everything he says because it sends out the wrong signal. The amendment his party has put down relating to the tax sends out an equally wrong signal as the party does not propose to scrap it; the amendment proposes to keep the travel tax with a reduced rate of €2. In my opening contribution to Committee Stage I argued that this is an act of political codology. The Deputy said the party would prefer to see the tax scrapped.

Damien English (Meath West, Fine Gael)
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That is in our budget proposal.

Pearse Doherty (Donegal South West, Sinn Fein)
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Yes but this is where we introduce aspects into law. The budget proposals will not mean anything for Ryanair or Aer Lingus, and it will not change the signals to those who want to come to this country. That will be affected by what we decide to introduce into legislation. The amendment looks to put into legislation an airport travel tax of €2, which Fine Gael would secure if the Government accepted the amendment.

The Deputy is correct in that it would send out the wrong signals to the tourist. This is a sector with the potential to reach significant numbers of people and create jobs. God above has provided assets for this country that we have not exploited properly, including our scenery, cultural tourism, language and the hospitality and good nature of Irish people. We must tap into the goodwill within the Irish diaspora to help the country regain its position in the eyes of the world. There is much potential in the tourism sector. I will not focus any more on Fine Gael bar to say that if we are to have an election debate, we must be honest with people. There is no point saying that the airport tax will be scrapped while at the same time introducing an amendment fixing a €2 rate.

The Minister's reduction of the rate to €3 does not go far enough. We should be clear that the airport travel tax should be scrapped, as this would not just be revenue neutral but would benefit the Exchequer because of an increased tourist flow to the State. It must be acknowledged that the amendment presented by the Government is an acknowledgement that introducing a travel tax of €10 was wrong. This is acknowledged through the amendment put before the House.

The Government may not be in a position next year to introduce a budget to correct the wrongs of this budget. Just as it was wrong to introduce a €10 charge, which is being acknowledged in the amendment, it is equally wrong to introduce the €3 charge. I know, coming from the north west, the impact of the downturn of the numbers of tourists coming to the region. Other measures in the Finance Bill relate to increases in petrol and diesel, which were dealt with in section 39, but we must look at the Finance Bill as a unified piece of legislation. All these measures have an impact on tourists.

Brendan Howlin (Wexford, Labour)
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Go raibh maith agat.

Pearse Doherty (Donegal South West, Sinn Fein)
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I will conclude very shortly. I understand there is no time limit on Committee Stage as long as I speak to the amendment.

Brendan Howlin (Wexford, Labour)
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I am indicating that I would like to facilitate others. The Deputy can monopolise the time, as is his right.

Pearse Doherty (Donegal South West, Sinn Fein)
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I would not wish to do that. One could reasonably ask what difference €3 will make. People travelling from Boston, New York, Australia, Shanghai or New York would pay an extra €3 but their holiday will cost hundreds of euro at the very least. The cost may be in the thousands of euro if families come along. One can add the costs of increased excise and taxes. A person coming to Donegal cannot jump on the train so a car must be hired and filled at the petrol station. That person must pay the excise duties, with the rates being increased by the Government in this budget. The person will also pay the additional airport tax. The signal is that this place is closed for tourism purposes.

The reduction of the rate does not go far enough as we must put a stop to the signal that this place penalises tourists. This may have more to do with supporting the 100,000 people who will leave our shores in the next two years; they will have to pay €7 less. It is the wrong decision and the tax should be repealed. The section should be replaced with a section deleting the airport tax in its totality.

Seán Barrett (Dún Laoghaire, Fine Gael)
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I am surprised at the outburst from Deputy Doherty. I appreciate he is a new Deputy but he is probably not aware that sometimes with a finance Bill an amendment is tabled in order to facilitate debate. At least Fine Gael tabled an amendment, as I do not see any amendment on the list from Sinn Féin.

Pearse Doherty (Donegal South West, Sinn Fein)
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Fine Gael has facilitated the issue.

Brendan Howlin (Wexford, Labour)
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We do not shout Members down in the House.

Seán Barrett (Dún Laoghaire, Fine Gael)
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He is probably used to shouting down people but I like to do business in an orderly fashion. I listened to him and am now replying. Sinn Féin has no amendment dealing with the imposition of a travel tax and Fine Gael has tabled an amendment reducing the tax. We would prefer if the tax was at zero but we are also realists in so far as the State must collect revenue. We have produced a budget based on the fact that the Government is retaining a €3 travel tax. To show our disdain for the idea of a travel tax in the first place we put down an amendment in order to debate the issue, which is more than Sinn Féin has done.

Sinn Féin should stop at every possible opportunity looking to introduce party politics into every amendment. It is criticising either the Labour Party or Fine Gael on every occasion. It has made the point that it does not believe in increasing taxes but it wants to increase expenditure. It has not indicated how everything will balance so we accept that the party lives in a fairyland. It should not spend its time criticising a party putting down an amendment to reduce the proposed tax when it has nothing to contribute.

As my colleague, Deputy English, has said, as an island nation it is crazy to impose any travel tax. We must encourage people into and out of this country. If they are travelling here on holiday, they must return home. It is beyond belief that we would impose a tax on travel when we want to create jobs and the tourism industry is crumbling. Any hotelier, publican or guesthouse owner will tell one what is happening in the tourism sector. We should do everything possible to boost tourism and create jobs. We should not have taxes which discourage people from visiting this country.

I ask Deputies to support the Fine Gael Party amendment and ensure the air travel tax is progressively abolished. While the composition of any new Government is a matter for the electorate, I hope the new Administration will abolish the tax at the first opportunity. In the meantime, the amendment reinforces the argument that Ireland does not need a travel tax when tourism numbers are in decline, the tourism sector is on its knees and hotels are closing. It makes sense to avail of every opportunity to use tourism to ensure there are better days ahead.

Pearse Doherty (Donegal South West, Sinn Fein)
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On a point of order, while I take on board the problems outlined by the previous speaker-----

Brendan Howlin (Wexford, Labour)
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That is not a point of order.

Pearse Doherty (Donegal South West, Sinn Fein)
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My point of order relates to the rules of the House, on which I seek clarification. Having discussed the air travel tax with my party team, I was of the view that if one tabled an amendment, for example, to delete the figure of "€3" and replace it with €0, it would be ruled out of order, as has been the case with many of my amendments.

Damien English (Meath West, Fine Gael)
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That is the reason the Fine Gael Party amendment refers to a figure of €2.

Seán Barrett (Dún Laoghaire, Fine Gael)
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Why did the Deputy not table an amendment? He should not criticise my party for doing so.

Brendan Howlin (Wexford, Labour)
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I do not propose to explain the procedure governing amendments as it is a matter for the officers of the House to explain.

Seán Barrett (Dún Laoghaire, Fine Gael)
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The Deputy is making excuses and engaging in another attempt to attack Fine Gael and the Labour Party.

Brendan Howlin (Wexford, Labour)
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We must discuss the amendment before the House.

Pearse Doherty (Donegal South West, Sinn Fein)
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I did not have a chance to complete my point of order.

Brendan Howlin (Wexford, Labour)
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The procedure of the House is that when the Chair stands other Deputies must take their seats.

In the few minutes remaining, I am anxious to allow the Labour Party speaker to contribute and the Minister of State to reply. I advise the Deputy to raise the procedure for tabling of amendments with the Office of the Ceann Comhairle.

Damien English (Meath West, Fine Gael)
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May I clarify my amendment?

Brendan Howlin (Wexford, Labour)
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No, we do not need further clarification.

Joan Burton (Dublin West, Labour)
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On the air travel tax, I welcome the Government's decision to reduce the air travel tax to €3. At a time of great economic crisis and high unemployment Governments must be careful about the taxes they introduce. Unfortunately, the air travel tax was exactly the type of tax we did not need at an extraordinarily sensitive time for the tourism industry. While the reduction is welcome, the Government could have gone a little further. The challenge for the various operators in the tourism industry is to show that the reduction will produce a flow of visitors.

One factor which would help Ireland to recover would be a return to traditional and basic industries such as tourism, rather than construction and property development. Despite the many reductions in wages and salaries, Ireland remains an expensive country in which to live. Its high cost of living was the cause of upward pressure on wages. Hotels and other elements of the tourism industry are trying to give good value for money. This is a welcome development because we must bear in mind that other countries are competing strongly. For instance, for a considerable part of last year's off-season, Spain offered extremely attractive packages to tourists aged 55 years and over. Reports indicate that the attractive hotel rates that were made available in regional and tourist resort hotels in Spain last year were very popular with retired Irish people.

A new Government will have to focus on developing a policy to show that Ireland as a tourist destination is not only attractive but very good value for money. We do not want visitors from continental Europe, the United Kingdom or the United States being shocked at the costs they encounter when they arrive. We need to develop package programmes which ensure tourists, particularly those of average means, are well advised of what will be the likely cost of a good holiday, whether long or short. An all-in package approach would, I hope, help reinvigorate our traditional markets, namely, the United Kingdom and United States.

John Moloney (Laois-Offaly, Fianna Fail)
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States must generate revenue and Ireland is not alone in imposing a tax on air travel. It is noteworthy that the United Kingdom applies a rate of £12 or €14.20, while Germany, France, the United States and Austria apply rates of €8, €4, $14 and €8, respectively.

Damien English (Meath West, Fine Gael)
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Unlike Ireland, those countries are not broke.

John Moloney (Laois-Offaly, Fianna Fail)
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We do not know the extent of their solvency. In any case, Ireland is not unique as air travel taxes are common across Europe. A number of countries in the European Union, including the United Kingdom and France, apply similar taxes, as do Australia and New Zealand. The United States has also introduced a tax on tourists travelling to the country by air.

Seán Barrett (Dún Laoghaire, Fine Gael)
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The countries the Minister of State cites are not islands in the Atlantic.

John Moloney (Laois-Offaly, Fianna Fail)
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The rates of tax applied by the countries to which I refer are higher than the Irish rate, in some cases substantially so. The trend in Europe is towards applying a tax on air travel. Calls have been made to abolish the tax on the basis that it adversely affects the number of people travelling to Ireland. The Minister has difficulty accepting this proposition and considers that the impact of the air travel tax has been overstated. The numbers travelling appear to be more closely related to other factors, including the level of economic activity. Notwithstanding these reservations, the Minister decided that a single, revised rate of air travel tax of €3 will come into effect on 1 March. He indicated that the reduction announced in the budget should only apply on a temporary basis and that the rate would be increased unless there is clear and decisive evidence of an appropriate response from the airlines to increasing capacity and numbers travelling to Ireland by air. He was pleased his budget announcement was supplemented by an incentive scheme introduced by the Dublin Airport Authority for a full rebate of airport charges for additional traffic delivered above a certain threshold based on 2010 passenger numbers.

A modest air tax of €3 will yield close to €35 million in a full year. The case for reducing the tax further does not stand up, particularly as we are undergoing fiscal pressures and there is a requirement that the tax system be viewed as fair. The reduction in the air travel tax was a significant concession. The correct approach is to wait to see whether passenger numbers increase on foot of the change. In that regard, the cost of enhancing the concession further would be more than €10 million. In that context, the amendment is not accepted.

Brendan Howlin (Wexford, Labour)
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As it is now 3 p.m., I must deal with the deferred divisions. On section 39, a division has been challenged. The division will now proceed.

Séamus Kirk (Louth, Ceann Comhairle)
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The next deferred division relates to section 41. Is the section agreed? Agreed.

Séamus Kirk (Louth, Ceann Comhairle)
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As we have passed 3 p.m., I am required to put the following question in accordance with an order of the Dáil of 25 January 2010: "That the amendment set down by the Minister for Finance to Part 2 of the Bill and not disposed of is hereby made to the Bill and in respect of each of the sections undisposed of in the said Part, that the section or, as appropriate, the section as amended, is hereby agreed to."

Joan Burton (Dublin West, Labour)
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I move amendment No. 90a:

In page 196, before section 52, to insert the following new section:

"PART 3

Information on Tax Exiles

52.---The Minister shall within one month from the passing of this Act prepare and lay before Dáil Éireann a report on the contribution made to the Exchequer and in particular the contribution in that regard as a result of the measures introduced by the Finance Act 2010.".

The purpose of this amendment is to restate the position of the Labour Party on this issue. Significant numbers of people - the Revenue Commissioners suggest the figure is between 2,000 and 3,000 - are tax exiles from this country but, although technically not resident for tax purposes, they have the ability to come in and out of the country at frequent intervals, have homes here and, to all intents and purposes, live large parts of their lives here. Such people should make a contribution in this time of national economic emergency.

When the Minister presented the 2010 budget in December 2009, he announced that he would ensure a contribution was made to the country's coffers by non-resident tax exiles. However, while people in the PAYE sector and in business ended up paying their increased taxes almost immediately, nothing has happened yet in this regard. The Minister introduced the universal social charge in his budget speech early in December of last year, and those with private and public pensions were shocked when they opened their pension cheques this year and found that even those with medical cards, who had previously been exempt from such charges, and those with pensions of less than €26,000 - that is, most public service and private pensioners - were paying the new universal social charge at the top rate of 7% on their relatively small pensions.

On big days in this 30th Dáil, as more and more emergency measures were introduced and as the coffers of the State were being plundered for money to hand over to the banks, there was a phrase that Fianna Fáil Deputies were particularly fond of using, namely, "We are all in this together". Surprise, surprise: we are not all in it together. The people who have the use of clever tax advisers and accountants and who have offshore and onshore residences have been able, during the boom years, to be resident in the country but not resident for tax purposes. Following a campaign by the Labour Party, which I spoke about many times on the floor of the House, it was agreed that tax exiles should contribute to the Exchequer. The Minister said in his Budget Statement in December 2009 that he would make provision for this in 2010. When I asked questions about it, I was told that no information would be available until October 2010, and when October 2010 came, I was told "Sorry - we actually meant October 2011". This is in contrast to the people who opened cheques this month to find they were paying the new tax, the universal social charge, at fairly hefty levels from 1 January, having heard about it only in December of last year.

I ask the Minister for Finance and Fianna Fáil to agree to this modest amendment, which is phrased the way it is in order to be acceptable under the rules of a money Bill, under which it is impossible for the Opposition to table amendments that result in changes upwards or downwards in the taxation system. It is impossible for the Opposition to table motions that result in changes upwards or downwards in the taxation system. We want to have the report one month after this Act, because it is important, particularly for people in the PAYE sector, to know what the Fianna Fáil mantra, "we're all in this together", actually means.

One thing that has been most striking for Deputies on all sides of the House was the position of the self-employed in the construction industry, whether contractors, sub-contractors or ordinary workers, when the boom collapsed. Although they had been paying PRSI contributions and relevant contracts tax, RCT, where tax was being deducted at source in the case of contractors, once they lost their jobs and money, they could not claim unemployment benefit. Think of all the sub-contractors on the Pierse contract for the building of schools who found they could not be paid except by the liquidator, who had no money, even though this was a State-initiated PPP. They might have had a claim to job seeker's allowance but not to job seeker's benefit. However, if a spouse was working and earning a relatively modest amount, because the job seeker's allowance is means tested, this meant in many cases that the unemployed partner had no claim to that either. Very hard working self-employed people around the country, who, despite their businesses failing, made contributions, but have no entitlement to any type of State support. This is a major social issue all over Ireland. Remember that many tax exiles who have made fortunes in development and construction moved themselves and their wives offshore to facilitate tax planning and then came back to Ireland. Now look at the small people who are self-employed and how badly many of them have fared.

I recommend the Minister accepts that this report should be put before the House. The cost would be minimal, but it would give us the numbers of non-resident tax exiles and the parameters regarding the contributions the Minister for Finance believes it is reasonable they should make. I commend the amendment to the House on behalf of the Labour Party.

Brian Hayes (Dublin South West, Fine Gael)
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I welcome this amendment tabled by Deputy Burton and the Labour Party. As she rightly says, a Finance Bill, while it deals with income and expenditure and sets out a tax code for the full administrative year, is probably the only vehicle through which Members of the House can seek from the Minister and the Department of Finance a report on issues of concern that arise from time to time within the tax code.

No doubt the Minister of State, Deputy Martin Mansergh, is aware from his constituents in Tipperary South that the matter Deputy Burton raised is an issue of genuine concern. Despite the minimal changes that have occurred in recent years, there is a necessity for a comprehensive report, as Deputy Burton has said, to be able to reassure compliant taxpayers, the PAYE sector in particular, that there is fairness in terms of how these individuals are treated, what their status is, the length of time they stay in this country and the parameters around that. It is inherently right to insert this amendment in the context of this Bill to allow for that report. Even if the Minister was to assure the House that while it might not be possible in the context of this Bill but at some time in the near future a report would be issued by his Department along the lines suggested by Deputy Burton, some good could come from that.

The changes announced by the Minister for Finance on 7 December, the changes on budget night and those being enacted in this legislation have a dramatic effect on ordinary people, particularly those on low means. We know the consequences of the new social charge in respect of taxpayers on incomes of €4,000 or more now in the net, despite the amendments announced yesterday. The most obvious unfairness, irrespective of the failure to index tax credits, is that there is now a marginal rate for taxpayers on an income of €32,000. Once an income reaches €32,000, a person is paying the top rate of tax, along with the 7% and 4% social charge, effectively bringing the top marginal rate to 52%. Having had a period over many years when tax was relatively low, we are rapidly moving to a very high marginal rate. It is a difficult situation, where incomes are being slashed and in many instances where people are on part-time or no longer able to access overtime. They are also being affected by a very high new marginal rate of tax of the order of 52%. It is within that context that this debate is being framed.

People know the scale of the adjustment that has to occur in this country over the next few years to bring Ireland back to some form of economic stability. People are prepared, albeit in difficult circumstances, to make the adjustments in terms of their household income and in terms of the income that exists within this society. However, what they want to see throughout is a fundamental principle of fairness. People will do the heavy lifting in respect of the adjustments that have to occur if they believe that those at the top, in particular, are shouldering the burden and are prepared to make a contribution over and above ordinary and lower income taxpayers. We have an unusual situation, a type of "flight of the earls" in which people enter and leave this country, being treated as some type of high-bred class in terms of their tax status. That we allow such a situation to exist within the tax code adds to sense of unfairness that has to be tackled, so I very much support the amendment.

I am all ears to hear from the Minister of State, in the event that it cannot be done in the context of the Bill, why this might be the case. However, we have to be aware of this issue if we are asking people on relatively small means to do much of the heavy lifting in this economy over the course of the next few years. The tax code has got to be and must be seen to be fair to all.

Arthur Morgan (Louth, Sinn Fein)
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I support the sentiment behind the amendment. It is interesting that an amendment must be tabled in this way, asking for a report to be laid before the House, in order to deal with the issue of tax exiles. A practical amendment could be lifted and accepted by the Government. In saying that, I magnify two aspects that are wrong with this House. One must invoke ingenuity in order to get around the rules of the House. If one manages to do so, the Government will not accept the amendment because of a convention in the House. In the time I have been here, the Government has accepted two or three amendments from the Opposition. This is telling. It says it all about how this place operates. It is crazy.

Millionaires and billionaires are avoiding paying tax while those on the new minimum wage are caught to some degree by the universal social charge. People are swanning around, not paying their fair share. The Government ignored suggestions in the Sinn Féin pre-budget submission, which sought a fair taxation system and a new tax band of 48% on those earning in excess of €100,000. This only covered that portion of individuals' income but was ignored by the Government. The other important element of the submission was to introduce a wealth tax. This amounts only to 1% and concerns wealth in excess of €1 million. There was an income-related context so that a pensioner living in a little cottage in Ballsbridge, which could be worth substantially in excess of €1 million-----

Joan Burton (Dublin West, Labour)
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Not any more.

Arthur Morgan (Louth, Sinn Fein)
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Perhaps some are still in that category, albeit reduced in value.

Joan Burton (Dublin West, Labour)
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It would need to be a cottage orné like in the constituency of the Minister of State.

Brian Hayes (Dublin South West, Fine Gael)
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There are a few of them.

Martin Mansergh (Tipperary South, Fianna Fail)
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That is in State control.

Arthur Morgan (Louth, Sinn Fein)
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Did the Government want to deal with a fair taxation system, whether concerning tax exiles or the wealth I have described? The Government patently ignored it and went after the usual suspects, those on low incomes across the board. That is grossly unfair. People said that Sinn Féin is not prepared to increase taxation but of course we are. We are prepared to introduce cuts in the public sector. We have outlined that in terms of capping salaries of €100,000 and dealing with the pay of Ministers and Oireachtas Members. People ignored what we were proposing. Let us call the adjustments cuts.

It would be interesting if the Government accepts this amendment. Perhaps the Leas-Cheann Comhairle can advise on the following matter. Will this be invoked one month after the passing of the Bill? Does that mean that the Dáil will not be sitting by then? I am sure there is provision for this somewhere.

Brendan Howlin (Wexford, Labour)
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The Chair cannot make any presumption on this point.

Arthur Morgan (Louth, Sinn Fein)
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It is the prerogative of the Taoiseach. I look forward to hearing from the Minister of State.

Brendan Howlin (Wexford, Labour)
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The amendment concerns information on tax exiles and section 52 concerns VAT.

Martin Mansergh (Tipperary South, Fianna Fail)
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Unless requested, I will only address what has been discussed.

I accept it is a fraught question and there are genuine concerns on this matter on all sides of the House. The difficulty about it is that, in this sense, we are not an island and the greater the wealth, the greater the mobility. One only has to read the press across the water for debates that reach into politics, where treasurers of parties are involved in non-domiciled rules. I do not propose to accept the amendments but for the following reasons. The report proposed by Deputy Burton is clearly a report on the contribution to the Exchequer made by so-called tax exiles. The Minister has stated on previous occasions that he is informed by the Revenue Commissioners that there is no one register or list of so-called tax exiles and nothing in Irish law thus far makes reference to tax exile status.

The taxation of individuals in the State is in line with that prevailing in most OECD jurisdictions. Individuals who are not resident for tax purposes pay tax here only on income arising in this State. They pay tax on income arising in the State and from income derived from working here. Many individuals - I am not saying most or all - who declare on tax returns that they are non-resident in this State do not have an Irish address. Many of these non-residents are foreign nationals or have a foreign domicile and many non-resident Irish citizens or Irish domiciliaries included in this figure may have become non-resident for reasons unrelated to taxation but may have retained Irish investments such as rental property. Individuals leaving the State are not required to give reasons for leaving. In other words, it is not true to say that 6,000 individuals, or whatever number is suggested, are tax exiles. Some non-residents have an Irish tax liability but it is not true to say that all or most of them are Irish domiciled individuals who have moved out of Ireland for tax reasons. As there is no definition of tax exile in Irish law, nor any way of determining how many non-resident taxpayers are non-resident for tax reasons, it is difficult to prepare a report on the subject.

In referring to the measures introduced in their Finance Act 2010, the Deputy is presumably referring to the domicile levy charged on an individual Irish domiciled and an Irish citizen whose worldwide income exceeds €1 million, whose Irish located property is greater than €5 million and whose liability to Irish income tax is less than €200,000.

Incidentally, in the previous year's Finance Act, the Minister abolished the Cinderella rule. This was originally introduced when the Labour Party was part of the Government. Before the abolition, an individual could be present in the State for most or practically all of the day, provided he or she left just before midnight. Hence the name Cinderella.

Joan Burton (Dublin West, Labour)
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I think I created that name.

Brian Hayes (Dublin South West, Fine Gael)
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Cinderella only had one shoe.

Martin Mansergh (Tipperary South, Fianna Fail)
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Most of these folks might have a bit more than that. The current rules state that an individual can be present in the State for 182 days or less and still be non-resident. As it is difficult to estimate the number of individuals who satisfy this criteria, it is not possible to predict the number of individuals subject to the levy or the likely yield from the measure. This is the reason for regarding the amendment as premature. The first payment date for the domicile levy, as Deputy Burton correctly pointed out, is 31 October 2011 in respect of the 2010 tax year. Once there is a yield from the levy, it would be more sensible to prepare a report on the subject. Whether I am in the House, I shall look forward to it with interest and anticipation. This point has been much discussed in the House and in the relevant committee. I look forward to how the next Government will deal with this subject.

Brendan Howlin (Wexford, Labour)
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Deputy Burton, how stands the amendment?

Joan Burton (Dublin West, Labour)
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May I reply briefly?

Brendan Howlin (Wexford, Labour)
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Yes.

Joan Burton (Dublin West, Labour)
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The Minister of State said it all there. I wish him the best of good fortune in returning to the House but, obviously, that will come down to the voters of south Tipperary. The Labour Party has an excellent candidate there in my Seanad colleague, Senator Phil Prendergast, who I hope will also be returned to this House.

Brian Hayes (Dublin South West, Fine Gael)
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She is no Cinderella.

Joan Burton (Dublin West, Labour)
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She is not a Cinderella, rather she comes from a background of having been a very experienced professional midwife. It she is elected to this House, it will be a first for this House to have a Member who was a professional midwife of long standing and who would have such experience of the health services.

The Minister of State said it all in one, namely, that if the first contributions from the arrangements entered into in last year's Finance Act and announced in 2009 produce a contribution, it will only come in, as it were, in October 2011. For the many people absolutely astonished by the rigour and level of the universal social charge, they basically got about three weeks' notice of it and bearing in mind that notice period included Christmas and all the bad weather at that time, it is no wonder people did not necessarily spot it in the budget coverage.

I was involved in a debate here on budget night with the former Minister, Deputy Harney, and I raised with her the issue of medical card holders having to pay the new universal social charge. If I recall correctly, she stressed that it was the policy of the Government to decouple the whole issue of taxation and medical cards. People who were setting out the policy did not have regard to the level of contribution required by people in quite poor economic circumstances and they were going to proceed with the measure, partly because of the IMF. This is one of the problems with the Irish taxation system. The former Taoiseach, Garret FitzGerald, has spoken about it on a number of occasions. The Labour Party, Fine Gael and Fianna Fáil would disagree on many tax issues and on the effectiveness and fairness of taxation.

We have a hollowed out tax system in respect of which use is made of an enormous variety of loopholes and contrivances and tax advisers are used across a wide range of taxes. There are people with significant wealth, influence and power whose view of taxation in terms of a contribution is "We will not pay a cent". We do not have, as there is in other countries, an ethos whereby one makes a contribution, even if one is very wealthy and such a person does not use his or her wealth status to avoid making a contribution. It is not enough for somebody who has become very wealthy and who is very successful in business to say that his or her success in business - which is celebrated - involves him or her providing employment for people, even though that is welcome. Many multimillionaires and billionaires are to congratulated on their success and good fortune. In some cases some of them inherited their wealth. They just happened to be born in the right spot with the right name, but in many cases people are substantially self-made or have made fortunes built on more modest amounts of money that their parents may have left them.

Brendan Howlin (Wexford, Labour)
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It would be good if we could make some progress.

Joan Burton (Dublin West, Labour)
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Such people cannot simply avoid making their fair contribution. If reform in this area is to be introduced by the next Government, it will be difficult because these are very powerful people, with vested interests and they employ the best lawyers in the world. We have to get everyone in this country contributing at an effective rate. That is the only way we will keep taxes low and moderate, which is what we need. We must get everyone to contribute.

It is regrettable that for seven or eight years Fianna Fáil - going back to the time of Charlie McCreevy, moving on to the then Minister for Finance, Deputy Brian Cowen, and now the current Minister, Deputy Brian Lenihan - has ducked and dived on this issue. I think it was I who coined the term the Cinderella clause in terms of midnight, which has become part of taxation language. When the Cinderella clause came in approximately 18 years ago, based on a British clause, most very wealthy people in Ireland then did not have personal helicopters to take a little ride out over Lambay island or Howth Head out of the jurisdiction for a couple of hours and then hop back again. What we need, and I hope it may emerge in the coming election, is a consensus from all the parties that even people of great power, wealth and influence - who are widely and correctly admired by many and many of whom I know are very charitable - must contribute their fair share. I ask the House to support the Labour Party amendment.

Brendan Howlin (Wexford, Labour)
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The Deputy is pressing the amendment.

Joan Burton (Dublin West, Labour)
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Yes.

Brendan Howlin (Wexford, Labour)
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The vote will be deferred until 4.30 p.m. in accordance with the order of the House.

Brendan Howlin (Wexford, Labour)
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This section is opposed by Deputy Noonan.

Brian Hayes (Dublin South West, Fine Gael)
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We oppose this section. I am interested in hearing from the Minister of State the rationale on the question of consecutive days. This section which is an amendment to the principal Act substitutes 28 consecutive days for seven consecutive days and I want to hear from the Minister of State the purpose of that in respect of this amendment of the principal Act.

Martin Mansergh (Tipperary South, Fianna Fail)
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I do not propose to accept this amendment. Section 53 of the Bill amends section 17 of the VAT Consolidation Act 2010 to extend the notification requirements on foreign-based mobile traders, namely persons not established in the State supplying goods for consideration in the State.

Section 17 provides that where a premises provider allows a foreign-based mobile trader to supply goods for consideration on his or her land for a period of less than seven consecutive days, the premises provider must notify Revenue of the mobile trader, and this notification must be made 14 days in advance of when the trading takes place. This arrangement informs Revenue that the mobile traders are trading in the State and Revenue can then visit these premises to ensure tax possibly due by these foreign-based traders is returned and paid to the Exchequer. Currently, there is no obligation on premises providers to make such advance notification to Revenue if the mobile trader trades in goods for periods in excess of seven days.

The stipulation on seven days is now considered to be too restrictive, particularly in reference to the types of events, now more commonplace and occurring nationwide, but lasting for periods in excess of seven days, such as boat races, fairs, Christmas markets etc. Some of these events have up to 70 stalls and many traders are from mainland Europe, but not established here.

Section 53 amends section 17 to provide that the period of trading by a foreign mobile trader, which would require a premises provider to make advance notification to Revenue, is being extended from seven days to 28 days. I would just clarify that the period provided for notification by premises providers, currently 14 days, is not being amended by section 53.

This amendment is an anti-evasion measure to ensure that Revenue is aware of various different events happening countrywide, lasting up to 28 days. The information is received in the various Revenue districts and compliance officers are then sent out to visit these premises to ensure tax properly due by these foreign-based mobile traders is returned and paid to the Exchequer.

I repeat, this amendment will assist in combating tax evasion by foreign-based mobile traders. Perhaps in the light of that explanation, the Deputy opposite might consider withdrawing the amendment.

Brian Hayes (Dublin South West, Fine Gael)
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Will the Minister of State give some examples to the House of foreign-based mobile traders? Is the notification period to be extended? That would seem sensible enough as a means of making it clear to the authorities that a certain trader is coming such that they could ensure they have the wherewithal to deal with the matter. However, in doing that, would conditions be made more restrictive for traders entering the country?

Martin Mansergh (Tipperary South, Fianna Fail)
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I gave some examples and referred to boat races, fairs and Christmas markets. We can all imagine events around the country that have many stalls. Such events occur fairly frequently in towns and parts of cities. I do not know what examples are required beyond those I have listed.

Brian Hayes (Dublin South West, Fine Gael)
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Section 53 is effectively an amendment of the principal Act. Where did it come from? Was it flagged to the Department by the Revenue Commissioners? Who lobbied for a change to the principal Act?

Martin Mansergh (Tipperary South, Fianna Fail)
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The Revenue Commissioners. As the Deputy would expect, the Revenue Commissioners have a part to play in respect of most anti-tax-evasion measures. There are also traders entering the country through Northern Ireland.

Brian Hayes (Dublin South West, Fine Gael)
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Is this section an amendment to the principal Act in respect of the application of VAT to immovable goods provided by public bodies? I presume the measure extends VAT to local authorities' goods and services in respect of which no VAT applied heretofore. The Minister of State may correct me if I am wrong. It is an important issue.

The section deals with the capital goods scheme. In amending the principal Act, have the Revenue Commissioners and the Department assessed the likely financial imposition of the proposal on public bodies? I am aware of a case in my local authority area in respect of which VAT is deemed to apply based on decisions of the European courts. I am not exactly certain that the legislation applies in this instance. I am interested in hearing the rationale for the change the Minister of State is proposing to make to the principal Act.

Martin Mansergh (Tipperary South, Fianna Fail)
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This section amends section 95 of the Value-Added Tax Consolidation Act, which deals with transitional arrangements relating to deductibility for housing and burial plots sold by public bodies that have been subject to VAT from 1 July 2010. The amendment provides for a deductibility adjustment, which is to be no greater than the amount of VAT due on the sale, for housing and burial plots sold by public bodies on or after 1 July 2010 which were required or developed by them before that date and where there is otherwise no entitlement to VAT input credit.

Since 1 July 2010, the deductibility adjustment has been provided administratively pending the necessary amending legislation. If I understand the section correctly, it is less an imposition and more a relief for public bodies. Sometimes, if one does not have one side, one cannot claim it on the other.

Brian Hayes (Dublin South West, Fine Gael)
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Is the measure only implementing a decision taken last year in respect of the change?

Martin Mansergh (Tipperary South, Fianna Fail)
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It is a logical conclusion of that.

Brian Hayes (Dublin South West, Fine Gael)
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That is fine.

Joan Burton (Dublin West, Labour)
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The first part of section 57 deals with the exemption from VAT of public postal services provided as part of the universal service set out in the EU postal directives. It extends this both to An Post and any other designated provider of that service. I presume this means postage stamps will remain free of VAT, in addition to postal services, be they the traditional services provided by An Post or those provided by new providers that may be competing in the deregulated market.

As we come to the end of the life of the 30th Dáil, it is appropriate to state on the record that very many postal workers, bus drivers and other drivers in various public services did a lot to help those who would otherwise have been very isolated and alone during the recent cold spell. In the rush to deregulate postal services and amend or lose the universal postal service, this assistance should be noted. In a country like Ireland, which has a large number of roads and some very isolated housing, the services of postmen and postwomen are really valued. Their services comprise an important part of the fabric of the State, particularly in rural areas.

Now that there are many changes and a collapse in banking, it may well be that instead of having large numbers of banks in Ireland, particularly in smaller towns and some villages, there will be but one large Irish bank. A bank comprises a very important part of community services, particularly for those in isolated areas and those on low incomes.

I welcome the confirmation that cultural services are to remain exempt from VAT. I am sure the Minister of State must have been influential in that regard. The exemption is to apply to charges such as those to enter museums and stately homes. It is helpful that there is confirmation in this regard. The measure helps to keep prices competitive, both for the Irish and tourists from abroad. Last year, following an EU court case, local authorities had to charge VAT on services provided. I welcome the recognition of organisations such as museums. It allows them to continue to apply the VAT exemption to their services.

Martin Mansergh (Tipperary South, Fianna Fail)
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I endorse everything Deputy Burton said, especially on the value of the postal service. As she pointed out, the service is particularly valuable in rural areas, where on weekdays one can predict within an hour the time of arrival of a postman. Despite the discussions, debates and rationalisation attempts of the past 20 years, the service to the door continues in the majority of cases. Long may it do so.

I will confirm explicitly that stamps are free from VAT. I take a certain interest in stamps, having been for many years a member of the philatelic advisory committee. I welcome that the standard internal post rate of 55 cent has been maintained for many years.

Brian Hayes (Dublin South West, Fine Gael)
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We were wondering why Mr. Haughey was going to be on the next range of stamps.

Martin Mansergh (Tipperary South, Fianna Fail)
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If Fine Gael is in Government in 2026, perhaps it will approve a centenary stamp.

Brian Hayes (Dublin South West, Fine Gael)
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We will definitely keep the Minister of State on that body.

Martin Mansergh (Tipperary South, Fianna Fail)
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It is normal for a Taoiseach on the centenary of his birth. No exception would or should be made for Mr. Haughey.

Brian Hayes (Dublin South West, Fine Gael)
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The Minister of State should remain on that committee.

Martin Mansergh (Tipperary South, Fianna Fail)
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I needed to resign when I became a Minister of State.

Like Deputy Burton, I welcome the clarification regarding cultural services. As we know, all of the principal cultural institutions and many of the buildings run by the Office of Public Works are free of entry charges. Some places have an entry charge where it acts as a rationing mechanism or there is a high level of foreign visits. Even in museums and galleries, there tends to be a charge on special exhibitions to make them financially viable. Our existing policy, which has lasted for many years, is essentially a good one.

Ulick Burke (Galway East, Fine Gael)
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I ask for the Chair's indulgence while I stray slightly as others have done.

Brian O'Shea (Waterford, Labour)
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The Deputy does not do so often.

Ulick Burke (Galway East, Fine Gael)
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Will the Minister of State ask the Government to reconsider its recent decision to abolish the patent royalty relief? During the past four or five years, various Ministers have often referred to our smart economy and the importance of its continued development. One imagines we would be encouraging the people in question to be innovative and to develop their entrepreneurial endeavours. As such, the abolition of this relief is a serious retrograde step in respect of the many small people who have tried to develop indigenous industries, particularly in the current climate. I fully accept that many of the big people, as it were, abused the system to some degree.

Martin Mansergh (Tipperary South, Fianna Fail)
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On a point of order, to which section is the Deputy referring?

Brian Hayes (Dublin South West, Fine Gael)
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It is a general point on VAT.

Ulick Burke (Galway East, Fine Gael)
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I beg the Minister of State's indulgence in straying slightly from the topic.

Martin Mansergh (Tipperary South, Fianna Fail)
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It relates to no section of the Bill.

Ulick Burke (Galway East, Fine Gael)
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No, but the situation is serious and I ask the Minister of State to redress it. Many people have been innovative because of the incentives provided up to a maximum of €5 million. Most of our small industries, particularly outside the major urban areas and industrial centres, benefited from the support provided through these incentives.

The Government repeatedly discussed the smart economy, but how can we reconcile the abolition of the relief with the considerable support that the Government is providing to research and development at third level? People who are trying to develop enterprises outside third level institutions and on their own initiative are being penalised. Will the Minister of State re-examine this issue and reduce the relief in such a way as to eliminate those who were abusing it? Instead of a complete abolition, the relief could be reduced by half or even 33%. There is no point in throwing the baby out with the bath water. It would be an iron-fisted response. I would appreciate it if the Minister of State could inform the House about the saving that will accrue from the abolition of the relief and about whether a cost benefit analysis has been carried out.

We sell ourselves as trying to encourage foreign companies to come to Ireland and the consequential research and development, particularly in University College Galway, where outstanding and innovative work has been done. Galway has become a hub for medical devices. Despite the fact that money is being pumped into research and development at third level, will such work now be de-incentivised? Reconciling the abolition of the relief with where we want to go is difficult.

This might be my last opportunity to contribute in the House. I would like to offer a sincere word of thanks to my colleagues, first and foremost those in Galway East, and to wish those who are retiring well, those being, Deputies Connaughton and Treacy. In particular, I wish Deputy Treacy, who stated yesterday that he will not be going forward for re-election, a speedy return to health. I also thank the Minister of State, Deputy Mansergh, for his outstanding work and the support he gave to the people severely affected by the recent flooding in east County Galway, be they in the Ballinasloe or Gort area. Some doubted him, but he followed through on his assertion that he would take the lead role in driving relief forward. I compliment him in this regard and hope that the work will continue to provide relief for the many people whose incomes and households suffered.

It is regrettable that we cannot get many insurance companies to respond to the needs of people. They have taken a heavy-handed approach by refusing people home insurance. Those people will live in constant fear until such time as full remedial works have been carried out to prevent further flooding.

I wish all candidates, particularly my colleagues, well in the forthcoming election. Deputy Brian Hayes is a former student of mine, one of whom I am proud. I wish him well, not only in this-----

Brian Hayes (Dublin South West, Fine Gael)
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Now the Minister of State knows who to blame.

Ulick Burke (Galway East, Fine Gael)
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I wish him well for the future.

We must examine issues throughout the country, in particular those that arise frequently. The question of special needs is important. When legislation was introduced in the House, the only missing element related to the rights of people with special needs. Sure enough, it turned out to be an important element. It is regrettable that the rights to which they were entitled were seriously qualified by the availability of resources. Many of the people we as public representatives encountered ten or 20 years ago have grown old. Their greatest fear is the future facing themselves and their siblings. It is a difficult future. They campaigned to achieve even the basic entitlements and it was a long and difficult struggle. It is regrettable that special needs children have to go without. They are being put back into mainstream education and they will lose out substantially and their future lives will be restricted as a result.

There are many other issues I would like to have seen addressed. I greatly appreciate the Acting Chairman's flexibility with regard to time. We must accept there are so many fine people in the public service and in the Civil Service who are never recognised for their true worth and the work they do for the community and for the services provided by Departments. Their positive response on all occasions to our representations has been wonderful. I pay tribute to them all.

Martin Mansergh (Tipperary South, Fianna Fail)
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The immediate matter raised by Deputy Burke relates to income tax and corporation tax in sections of the Bill which were dealt with this morning. However, I will convey the Deputy's comments to the Minister. I thank him for his camaraderie in the Seanad and the Dáil. I deeply appreciate his recognition of the work we are doing on flood relief in Galway and which will continue under the next Government. More than 62 minor relief works were carried out in 2010 in south and east Galway, and major schemes, including those in Claregalway. We are tidying up the Ballinasloe area. Intensive discussions are being carried on with the insurance industry to ensure that they recognise where works are being done that this alters the risk factor. A very small handful of properties cannot be economically managed by works and practically all of them are in the Deputy's part of County Galway. The Minister, Deputy Éamon Ó Cuív and myself are trying to address this with the very small number of people involved.

I wish Deputy Burke the very best in the years ahead and I thank him for his long public service.

Brian Hayes (Dublin South West, Fine Gael)
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I wish to ask a question on section 57.

Brian O'Shea (Waterford, Labour)
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We have five minutes in which to finish with two sections but I will allow the Deputy.

Brian Hayes (Dublin South West, Fine Gael)
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I did not have an opportunity to refer to the betting tax issue when it was being discussed in an earlier section. I am dealing now with section 57 but I am aware that the House dealt with the betting tax issue earlier.

Brian O'Shea (Waterford, Labour)
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I ask Deputy Hayes to deal with section 57 as these sections must be finished with by 4.30 p.m. and another section awaits.

Brian Hayes (Dublin South West, Fine Gael)
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I just want to ask a question. The third section of this new section refers to the VAT on betting. The first section deals with the question of postal services and the second section on cultural institutions. If I can have the indulgence of the Chair, I wish to ask one question which I was unable to ask at the time because I was not in the Chamber. I refer to the 1% turnover tax and the annual renewal fee which will now be charged to all the operators who provide Internet gambling, seven out of ten of whom are outside the State, effectively offshore. Did the Minister consider the question of increasing the annual renewal fee for all operators? I understand from the previous section that this fee ranges from €5,000 up to €100,000. Has the Minister considered imposing a higher starting point which would ensure that the fly-by-night operators would be persuaded not to come into our market? It will be very difficult to collect the 1% turnover tax from operators who are not based in the State on the basis that we do not have a particularly good record in chasing down turnover in operations not based here unless we have armies of people in the Revenue who will be able to chase after these issues.

In the context of this section, has the Minister looked at an enhanced annual renewal fee which is proposed in the Bill to ensure that the revenue will be larger than just 1% and those who are not based here and who might attempt to hide the turnover tax will, at the very least, have to make some significant contribution by way of looking for a licence to operate here? I ask this in the context of section 57(1)(c). This subsection will come into operation on such day or days as the Minister for Finance might appoint by order and different days as may be appointed for different provisions for different purposes. Why is the operation of the subsection subject to ministerial order, as opposed to other sections where an operating date is clearly notified?

Martin Mansergh (Tipperary South, Fianna Fail)
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I will explain the purpose of the section. Paragraph (c) replaces paragraph 10(1) of the schedule relating to VAT exemption for certain types of gambling by inserting a new subparagraph (1A). This new provision includes within the current VAT exemption bets and commissions that have been made subject to excise duty by a separate provision of this Bill in section 46. The bets and commissions in question are bets entered into remotely by bookmakers with persons in the State and the commissions of betting exchanges earned from bets entered into on the exchange by persons in the State. The reason the amendment is subject to a ministerial commencement order is because the application of Internet betting duty is itself subject to a ministerial order.

Brian O'Shea (Waterford, Labour)
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Now that the House has dealt with section 58, we must take the deferred division on amendment No. 90a in the name of Deputy Burton.

Liz McManus (Wicklow, Labour)
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Regarding the health insurance levy, it is very hard for people to understand how the Supreme Court made a landmark decision on risk equalisation in 2008 and yet the Government has stated that legislation to deal with the issue will not be ready until 2013. This levy is an imposition on people who, in many cases, are finding it difficult to manage already. It also raises fundamental issues of health policy. We have a health service with major difficulties; we have extraordinary inefficiencies and at the same time extraordinary stresses and strains on our hospital service. We have an undermanned general practice primary care service and are not investing enough in general practitioners' training. People are being charged for a visit to a GP in a way that would be unacceptable in any other European country. Why is the Government perpetuating inequalities at a time when there should have been a fundamental reappraisal of health policy and how the health service operates?

This is my last time speaking in this House. I hope one of my legacies will be in regard to producing in 2001 the Labour Party policy document "Our Good Health", which was the first policy document of any party that developed a worked-out health insurance model to provide equal access for all while also providing for an efficient health service. I regret very much that the Labour Party was not in a position to promote that in Government but it has been gratifying that even though at the time it was considered too radical - Fianna Fáil of course bashed it and Fine Gael kept silent - as time has gone on Fine Gael has accepted the merit of our position and has made its own proposals. Even on the Fianna Fáil side there has been grudging acceptance that it is the way forward. I would hope that whatever vicissitudes and difficulties the next Government will need to endure - it will undoubtedly endure many - providing and developing a universal health service with equal access for all would be its legacy.

We should consider how major progressive reforming policies were initiated in the past. I can think of two developed by Fianna Fáil Ministers, one was the access to second level education and the other was reform of general practice to provide medical cards on the basis of equal access so that it is against the law for a general practitioner to discriminate in any way between his or her private and public patients. Why were these considerations not brought into play when introducing fiscal policy that would underpin a decent health service and give us what the people are entitled to have as members of the European Union? Most of the population automatically presume that they can rely on such a health service where people are treated equally.

We will not oppose the provision on stamp duty. It was my honour to serve in the rainbow Government as Minister of State with responsibility for housing and urban renewal. Again, it would have been helpful had both this Government and the previous one given an honest statement or assessment of how things went so wrong. When we left Government I was conscious, because of information that came to me, of an increase in house prices in the private market - it was quite evident. I was satisfied, and the evidence is there on an absolutely factual basis, that we had managed to keep within the income and mortgage ratio required for a manageable market. We could stand over that record. Unfortunately, when the new Government came in the system and the market spiralled out of control. Some people made very large amounts of money while others have been very badly shackled with negative equity and very large mortgages at exactly the wrong time of their lives. Many are young people hoping to set out and have families at an expensive time of their lives or perhaps they already have young families and now have this crippling burden.

The Minister of State, Deputy Mansergh, is an intelligent and, I believe, an honest man. Why has a good, hard, concise assessment not been carried out? This Government is coming to the end of its days but we have a Civil Service which has provided information, analysis and very good advice through the years. We now have a situation from which none of us can take any heart because the hole dug for us by Fianna Fáil in particular is so deep it is very hard to see a way out of it. I believe the new government will provide the road to recovery and a fresh start which, even in itself, will be helpful. The one thing we must not do is repeat the mistakes of the past.

We already discussed tax breaks. When I was Minister of State one of the first things I did was to commission a review on urban renewal designation, what worked, what did not, what worked aesthetically, environmentally, socially and, most important, what worked economically and financially. That was a useful piece of work that at least tried to provide an honest appraisal of what had happened. We made mistakes. I would be the first to say the seaside renewal scheme was not a success and anybody who looks at the effects it had cannot take much heart from it. Ultimately, none of us is infallible. It is the lack of honesty and responsibility on the part of this Government which I find unnerving. I had to smile when I heard the Minister for Finance, Deputy Lenihan, talk about the Opposition being in denial. Wow.

Bernard Durkan (Kildare North, Fine Gael)
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Whoa.

Liz McManus (Wicklow, Labour)
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We are only in the halfpenny place.

I do not wish to create any difficulties because this is the last time I shall speak but I must say some words of thanks - to the Ceann Comhairle, the Leas-Cheann Comhairle, the Acting Chairmen and those who preceded them. I have been a chairperson and I know it can be a boring job as much as anything else but it requires diligence and fairness and I am very grateful for that.

I wish to thank my colleagues. As Members of this House we rely on a solidarity but it must be one based on principle and integrity. I am very comfortable in being able to say that has always been the case in the Labour Party since I came into this House and I am extremely grateful for that.

I wish to thank the Ministers I had to shadow; in health, the Minister, Deputy Harney, and the Minister for Energy, Communications and Natural Resources, Deputy Ryan. I mention one particular thing the Minister, Deputy Ryan, did which was very helpful. He ensured that civil servants in his Department were very open to providing members of the Opposition with briefings and ensuring we were well informed and able to access their expertise. Not all Ministers are as generous. From our point of view this has led to a more informed debate.

There is a final point I wish to make. When I came into this House in 1992 it seemed as if a new dawn had broken. Women had, in effect, been absent from this House. In the 1950s they were known as the "silent sisters" because they were the relations of Deputies - no other women were elected. In the Dáil prior to 1992 there had been women pioneers such as Nuala Fennell and others who had led the way. Coming into the House with a new cohort of women Deputies I thought something new was beginning. It is my great regret we have stalled in that progress. I have no idea whether there will be more women in the next Dáil; I hope there will but I will not be overly expectant in that regard. I hope we can achieve some kind of parity in the future. I urge the two parties, Fianna Fáil and Fine Gael, to look to their own in this regard. The Labour Party worked very hard to ensure we achieved the election of a critical mass of women but we are only one party. There is a terrible gap or lacuna in both those big traditional parties in terms of female representation. The responsibility lies with those parties to make the break through and change.

The only time I felt afraid in this Chamber was when we began the debate on the abortion referendum and I realised there were so few women in this House. There were six or seven men for every woman so there was only a handful of us who could ever know or imagine what it was like to have a crisis pregnancy. That was a lesson that made me more determined to defeat that referendum and I am very glad the Irish people chose to do that. However, it certainly brought home to me that it is not a fully functional Parliament unless we can have that kind of balance in the future.

I do not wish to speak much longer other than to thank those who assisted me. I also wish all those other Members who are retiring from this House all the very best and, more particularly, I wish those who are going forward well. It is a hard station to stand for election. Representing the people is a great honour but it is not easy and is not getting any easier. In my view it is getting harder. Some of the personalised attacks on the Taoiseach, Deputy Cowen, were unacceptable. It is neither right nor fair that anybody should have to put up with those kinds of attacks and in particular it is not right or fair that his family should have to put up with them. I do not say that people in this House have been guilty of that; I do not believe they have. However, when one looks at the public space this is unacceptable. That should be recorded. I thank the House. Question put and agreed to.

Brian O'Shea (Waterford, Labour)
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To clarify, we have agreed section 59 and are now on section 60. Deputies Pearse Doherty and Seymour Crawford indicated they wish to contribute on this section.

Pearse Doherty (Donegal South West, Sinn Fein)
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Given the ticking clock and the limited time we have to deal with these matters I will try to keep my comments very brief.

I enjoyed the final statement from the previous speaker and I wish her well in whatever course of action she takes in the future, as I do all retiring Deputies after the dissolution of the Dáil in the coming days.

Perhaps the Minister of State can shine some light on aspects of section 60. It is obviously very technical and refers to previous sections of enacted Bills.

I welcome the section dealing with first-time buyers with regard to those who are incapacitated in terms of a dwelling house or part of such a house. That is welcome.

I have a question on the abolition of the relief for the transfer of a site from a parent to son or daughter. Will the Minister of State provide information on the cost of that relief in the first instance? We all know how the Irish people have an affinity with the land, arising from the history of landlordism and evictions of the past. We are talking about a modest transfer within a family to a son or daughter, with the State taking money as part of that land transfer. The value of the pieces of land in rural Ireland would not be excessive and I am not referring to those who are trying to abuse the system, as we have seen with bankers who transfer property to spouses in order to evade the grip of NAMA. We are talking about genuine people who have worked hard for the wee piece of land with two or three family members and where there was always an intention to pass the land on in order for sons or daughters to build properties.

Perhaps it is not the case that they will come under the revision and there will still be an exemption but will the Minister of State clarify the issue? I am not sure if it is a practical step and I do not see the value or benefit. I am open to suggestion from the Minister.

One of the big problems with the section is that when the Minister of State dealt with section 60, he spoke about the revision and simplification of the stamp duty mechanism. He spoke about the abolition of reliefs and those who wish to live alone and take advantage of the exemption relating to first-time buyers. Parents or a trust would buy the house on the behalf of these people and although they would not previously have been classed as first-time buyers, they will now be classed as such as the act is on behalf of another person. I disagree with the assertion that this will stimulate the property market and commence the necessary infrastructure for the commitment in the national recovery plan for a site value tax. I am fundamentally opposed to the intention behind this.

The details and effect of the measure with regard to taxation is separate. This is being used to bring in a property charge, which is the fundamental problem for me and my party. I outlined in my Second Stage contribution how indirect taxation is relied on heavily by the State, with 42% of taxes collected in 2008 in the form of indirect taxation. This is another form of such taxation, which as we all know is not progressive. Although a property tax may be somewhat progressive, it does not deal with ability to pay because it should be income-linked in the first instance. The best way to ask those who have the ability to pay to give their fair share is through direct taxation, so there is a fundamental opposition to the intention behind this section.

As the Minister indicated, this commences the necessary infrastructure for the commitment in the national recovery plan for a site value tax. This plan should be abandoned. As I mentioned in discussing the transfer of land from father to son or mother to daughter, the relief will be extinguished. We are missing a paragraph in this legislation which would deal with the scandal that was the transfer of assets from those who have liabilities to this State through the banks and NAMA and who are transferring assets willy-nilly to spouses.

This takes me back to the priorities of the Minister for Finance and his officials - although I do not blame the officials - in the construction of the Finance Bill. Why is there no amendment dealing with banking bonuses two months after the publication of the budget? I mentioned on Second Stage that the Finance Bill is very technical. It is very difficult for a new Deputy who is not a chartered accountant and who does not have an economics degree to deal with it. If I were Minister for Finance I would have told officials to include the amendment dealing with bank bonuses at an early stage. If we had to wait for a finance (No. 2) Bill in order to introduce a charge on those earning as little as €80 per week in the guise of the universal social charge, so be it.

The same logic would apply to stamp duty, an area in which those with liabilities are transferring assets in a fashion that appears completely legal now. That is the information I have been led to believe. There is no taxation measure to get to grips with what is in my view a morally wrong and corrupt practice. It is our responsibility as legislators to address such issues in every finance Bill. When we see people using tax avoidance measures we must close the loopholes immediately. Such loopholes may be legal because they have not been identified or were purposefully left in previous Bills. This section of the Bill could deal with the transfer of assets.

The Minister has indicated that a 90% rate of tax on bank bonuses will be applied and in a similar fashion we could consider a stamp duty or transfer rate on assets flowing from one spouse to another if we know the process is to avoid liabilities to NAMA, for example. It is pity the Bill is not being used in such fashion. I seek clarification on the first issue I raised.

Seymour Crawford (Cavan-Monaghan, Fine Gael)
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I welcome the opportunity to raise a few questions relating to the section and get some clarification. As somebody living in a rural area I know of cases where sites are transferred from parents to sons or daughter. It is an extremely important process which has encouraged young people to live in rural Ireland who may not have been able to afford to live there otherwise. A cost placed on this will have a major effect. The former Minister for the Environment, Heritage and Local Government, Deputy John Gormley, has introduced regulations to such an extent that it will be almost impossible for young people to get planning permission in rural Ireland and this further impediment will not help. It is important to remember that sons or daughters living adjacent to family homes in rural Ireland can be extremely helpful in looking after parents or handicapped siblings. There should be clarification on the issue as the Bill as published would be a major step backwards in this regard.

Stamp duty at high levels has done much damage in the past. The transfer of land from father to son or daughter, if it is not done before the son or daughter is 35, can bring about significant costs. For different reasons some transfers may not be done before the son or daughter reaches 35; for example, a son or daughter may have had to leave home because of insufficient income in the home for two families. We need to consider these types of issues carefully.

I am annoyed that the Bill will require first-time buyers to pay stamp duty, albeit at a rate of 1%. Young people are finding it impossible to get onto the housing ladder. Recently, I encountered a case of a young couple, both of whom are in reasonable jobs, who were refused a mortgage to buy a house which cost one third of what a similar house would have cost five years ago. We must not impede efforts to utilise the current stock of empty houses. We need to encourage young people to move into empty houses.

I listened to Deputy McManus's comments on the need for greater gender balance in the Oireachtas. I have an interest in this matter because I encouraged a young woman to accept the nomination to follow me into the Dáil. The lady in question will face all sorts of difficulties because the political system is structured in a manner that does not encourage female participation in politics. Deputy McManus and other Deputies who are about to retire have been extremely able contributors to Dáil proceedings. I hope she and other colleagues who are conscious of the difficulties experienced by politicians and their families will seek to ensure they are replaced by female colleagues and encourage greater female participation in politics. While I fully appreciate the issue is not related to the Finance Bill, I wanted to respond to the Deputy's contribution on this issue, with which I concur.

On a separate matter, we have recently been dealing with the Neary affair in Drogheda, a highly delicate matter. When the issue first arose the presence on our team of former Deputy Nora Owen and Senator Francis Fitzgerald, also a former Deputy, was invaluable.

Kieran O'Donnell (Limerick East, Fine Gael)
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I wish to refer to something that has arisen in practice in the context of section 60. The residential housing market is not moving at the moment, but many young couples have bought homes. They took a risk, although people said the market was still falling. In many such cases, people were advised to close and pay stamp duty at 1% prior to the budget, whereas they are now paying 4% or more. The people in this group need some relief. In some cases, they will have to pay additional stamp duty of between €10,000 and €15,000 or €16,000. The reference to "on or after 8 December 2010" is a penal provision. There is merit in the argument that it should be amended to read "on or after 30 November 2010". That would give people a week's latitude. We need to consider cases in which sales had not been closed, or were still conditional, on 8 December last. I have contacted the Department of Finance on many occasions to raise this real issue, which affects young couples buying residential homes.

I intend to introduce an amendment to deal with this matter on Report Stage and I look forward to doing so. I ask the Minister to address it during the Committee Stage debate on section 60. Perhaps he can give favourable consideration to the introduction of a transitional arrangement to assist people who bought a family home - as opposed to a property - "on or after 30 November 2010". If he moves the cut-off date back a week, he will give them some relief. We are not talking about property speculators. We are talking about those who are paying for the mistaken policies of the banks and the Government. They are buying homes, in many cases on the basis of advice, and thereby bringing stamp duty to the Exchequer. I do not think the level of stamp duty should be penal.

I would like to hear the Minister's views on the amendment I intend to introduce on Report Stage. I am aware that people have been making representations to the Department of Finance on this issue. It is fair and reasonable that we should assist young married couples and partners who are under enormous pressure at the moment. Some of them have young children. Their pay packets have been decimated in the last month. Rates of child benefit have been cut. The mortgage repayments of some young people have increased. Many young people do not have job security. Some of them are facing the prospect of unemployment. They see stamp duty as dead money because it is going to the Exchequer. I would like to hear the Minister's comments. I know he is aware of it. I hope to introduce an amendment on Report Stage to address it.

Brian Hayes (Dublin South West, Fine Gael)
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I would like to pick up on the issue raised by Deputy O'Donnell. I am sure the Minister agrees that difficulties will exist regardless of the deadline one sets in this regard. Deputy O'Donnell made the point that there is a fundamental difference between 1% and 4%. It could be worth many thousands of euro to young couples who are finding it difficult to get 10% from the banks to furnish their homes. It could ultimately make a huge difference. There is some merit in the idea that the Minister should consider the matter. I suspect the number of people affected by this measure is not huge. Perhaps the Revenue Commissioners have given the Minister some indication of the total number involved. It is a small group of people. A fair change, if not a substantial one, is required.

Section 60 provides for transitional arrangements whereby purchasers who entered into binding contracts before budget day, and execute the relevant instrument before 1 July 2011, will not have to pay an increased amount of stamp duty. Some degree of fairness is built into the system and will last six months. If one draws down one's contract within six months of the date of budget day, one will pay the lesser amount. I assume that is the 1% rate. I can understand that. Can the Minister explain the rationale for the six-month timeframe that has been provided for after budget day? Why was a 12-month timeframe not provided for? We are not talking in every case about people who will initiate the relevant instrument within six months. It will depend on conveyancing and agreements between purchasers and vendors, for example. What is the rationale for the six-month period that applies to the transitional arrangement? Is it based on the fact that such a period applied when stamp duty changes were made in the past?

We are discussing the general issue of Part 4, which relates to stamp duty, but I would like to refer specifically to section 60. There is considerable anger in society, particularly among those in their late 20s, 30s and early 40s who paid substantial amounts of stamp duty over the last ten years. In many cases, they had to borrow between €40,000 and €60,000 to meet their stamp duty requirements. They have been lumbered with significant debts. They may be among the 350,000 people in negative equity, to whom we often refer. Ultimately, some form of release will be needed to resolve the difficulties of those who are paying enormous mortgages and are hugely in debt. As a society, we have a responsibility to develop some means of releasing them from their debt. A societal benefit would be associated with establishing such a means. In the absence of such a mechanism, many people will be unable to spend, consume and contribute to society as we may wish. I do not under-estimate the depth of the anger that exists across society, including parts of my constituency, about the sizable amounts of stamp duty people had to pay over the last decade or so.

I remind the House that not a million years ago, the then leader of a certain party lectured us that we did not need the revenue that was being generated from stamp duty. That says a great deal about the political judgment of the former Deputy, who represented the constituency of Dublin South-East when he was proposing these radical changes in the stamp duty regime. It goes to the heart of the collapse in the Irish economy that such a large amount of the tax that was raised each year in our society depended on stamp duty. It was completely unsustainable to rely on such a transaction tax. It was out of character with European norms. This society and this economy has to rectify that. I ask the Minister to examine the transitional arrangements in section 60. Can he give some indication of the number of people involved? I suspect it is quite small. Can he deal with Deputy O'Donnell's point before he initiates his amendment for the purposes of Report Stage?

Michael D'Arcy (Wexford, Fine Gael)
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In the context of section 60, which provides for the termination of property reliefs, I wish to raise the transfer of a portion of land from a parent to a child. It is primarily a rural issue. It is particularly unfair and unreasonable to remove this property-based tax relief at a time when the banks are closed, the rate of stamp duty is being increased in some cases and we are trying to get some people back to work. Those who are not lumbered with the cost of purchasing a site are among the few who can currently proceed with the construction of a property. The Government is proposing to remove the tax-based relief they currently enjoy. It is particularly unfair that such people will now have to pay stamp duty. If we are serious about encouraging some movement in the property market, we need to look at this. While this problem applies mainly to rural Ireland, it can also have an effect on urban Ireland. If somebody has an urban dwelling on a large site, he or she may be fortunate enough to have enough space to build another property. The Leas-Cheann Comhairle will be familiar with such cases in Wexford town. In such circumstances, the proposed extinguishing of this tax-based relief will kick in. I ask the Minister to consider this, taking into account that we must get people back to work. I would like to hear from the Minister how much income this is likely to generate for the State.

Martin Mansergh (Tipperary South, Fianna Fail)
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I did not have an opportunity to speak after Deputy Liz McManus, who made a rather valedictory speech on the previous section. I pay tribute to her service to the House-----

Brian Hayes (Dublin South West, Fine Gael)
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Hear, hear.

Martin Mansergh (Tipperary South, Fianna Fail)
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-----and to Irish politics. She made a particular contribution to the development of Labour Party health policy. One of the things I will be interested to observe in the future - Fine Gael has a similar policy - is how such a system can be successfully superimposed on the present structure and what sort of vested interests will be encountered along the way.

While I am on the subject, I believe Deputy Crawford will also retire from the House, and I pay tribute to the service he has given to an electorate that lives along the Border, including during troubled times. I have had quite a bit of contact with the Deputy on different issues and I have always found him an exceptionally honourable and decent parliamentarian, speaking from the heart about his community.

The issue raised by Deputies Doherty and D'Arcy relates to tax relief on sites transferred between a parent and his or her child. The cost of this relief is €6 million in a year. Offspring are still eligible for the half-rate applicable to transfers between family members. It should be pointed out that the average price of an acre of agricultural land is now less than €10,000, and if such a site were transferred, no tax would be payable. That price is considerably less than it was a couple of years ago. On a piece of land suitable for residential development, which would cost more than average, the rate of duty would still be low, at 1% between €10,000 and €20,000, and so on.

We should recall that Ireland is one of the only OECD countries that does not have an annual tax on property. We need to broaden the tax base, and a tax on property is one way to do this. This has been recommended not only by the Commission on Taxation but by nearly every independent body. I find it surprising that all parties in the House, including Sinn Féin, are on the conservative side of the Government on this issue.

The capital gains tax relief on the transfer of sites to children for the purpose of building a principal private residence remains in place. However, as many of us know from planning decisions, we need to be aware of the potential for abuse. For example, in a family with five children, sites may be released to each of the five children and then sold on after a little while to people outside the family. This has happened in the past. The system as it is at present confers a considerable benefit. I will be interested to see whether the parties opposite, if they come to this side, will still make the same arguments in a few months' time.

Deputy O'Donnell raised the issue of stamp duty relief on certain dates. The possibility of stamp duty changes in the budget was generally recognised, and the problem - as mentioned by Deputy Hayes - is that no matter what date is fixed, some people will unfortunately be just on the wrong side. To fix a date of 30 November would perhaps increase the sense of injustice felt by those who bought on 29 November.

Kieran O'Donnell (Limerick East, Fine Gael)
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Will the Minister of State yield?

Brendan Howlin (Wexford, Labour)
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I will call the Deputy again.

Martin Mansergh (Tipperary South, Fianna Fail)
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I will not go on too long. The Leas-Cheann Comhairle need not worry.

Brian Hayes (Dublin South West, Fine Gael)
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He is doing all right.

Martin Mansergh (Tipperary South, Fianna Fail)
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Six months should be adequate to enable any instrument to be executed. By reference to experience when stamp duty was changed in the past, the six-month period may be considered generous. Six months is an adequate period in which to formalise conveyances.

Deputy Ciarán Lynch talked about the affordable homes initiative and the rise in house prices. There were efforts in the late 1990s, including the two Bacon reports, to damp down the growth of prices in the property market, and I had some regrets at the time that the fight was abandoned. There were considerable pressures. It was always easy to make the argument that building more and more houses would create jobs in construction and give people homes. As I have said before, there were not many voices telling us in the boom years that we ought to go more slowly. One of them was the former European Commissioner Pedro Solbes, who said this in 2001 to Charlie McCreevy-----

Brian Hayes (Dublin South West, Fine Gael)
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And Deputy Bruton.

Martin Mansergh (Tipperary South, Fianna Fail)
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-----and nearly all of us were highly indignant at his interference in our sovereign affairs. This may have contributed to the loss of the first Nice referendum. However, I am afraid the Commissioner was right and the Minister and most of the rest of us were wrong.

Deputy Hayes made an oblique reference to a former Deputy, and Minister, Mr. Michael McDowell, on the subject of stamp duty. It must be said that Fine Gael was very active on the stamp duty issue not long after that time.

Brian Hayes (Dublin South West, Fine Gael)
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On the right side of it.

Martin Mansergh (Tipperary South, Fianna Fail)
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To return to the practical point, the problem is that if one makes a radical change to stamp duty - in this case, reducing the rate to 1%, or 2% above a high threshold - one can always say that it creates some inequities, looking back. Is that an argument that one can never change anything? Any reduction in tax will feel inequitable to those who paid more previously. It is a difficult issue, and I am sceptical as to whether a new Government will find the financial scope, however desirable it may be, to provide some compensation for those who were unfortunately caught by the change.

Kieran O'Donnell (Limerick East, Fine Gael)
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On the practical issue, I know that many calls have been made to the Department of Finance - although not a huge number - from people who are upset because, when they were purchasing their homes, the stamping instrument went through prior to 8 December. Similarly, there are cases of people who bought their homes on the same date. Some would have effectively put through the statutory instrument prior to 8 December, and some might have done this afterwards, even though the sale might have gone through at the same time, because, I believe, they have to put it through, I believe, within 30 days.

Has the Department quantified the number of people this new provision would affect? I agree with the Minister of State's sentiments to the effect that the situation cannot be so inflexible as to preclude the Department looking at change. Has the cost to the Exchequer been quantified - because I would say the Department of Finance has received a reasonable number of calls in this regard - by amending the date from 8 December to 30 November? I am putting this purely in respect of the family home. I ask the Minister to look at it, as it is a relatively small measure. Does the Minister know how many people it would impact on if the date was to be changed from 8 December to 30 November and what effect would this have on the Exchequer? Some €3,000 or €4,000 or even €10,.000 to an ordinary hard-pressed family is an infinitely higher proportion to that family than the cost to the State. I ask the Minister of State to deal with these practicalities.

Martin Mansergh (Tipperary South, Fianna Fail)
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The imposition of taxation is always prospective. Likewise, reliefs and concessions should be prospective as special circumstances dictate. Otherwise, if a concession were to be granted, it would serve as a precedent every time stamp duty or any other event or transaction tax such as capital gains tax or capital acquisitions tax were to be changed. That is the reason why there would be considerable hesitation.

I am aware, of course, that in various parts of the tax code some transitional relief has been granted from time to time. That, in any event, is the situation at the moment. There has been a good deal of talk today about a finance Bill (No. 2) later in the year and if the Deputy's party is in office, it is very welcome to look at the matter again.

Kieran O'Donnell (Limerick East, Fine Gael)
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The Government is giving transitional arrangements where someone who enters an agreement after 8 December ends up paying a higher amount that he or she would have paid if going through before this date. In the interests of fairness the reverse should apply. The dates are arbitrary but I am focusing on the week before, from 1 December. I should like if for Report Stage the Minister could ask his officials to quantify the number of people this would affect, based on representations, and the cost to the Exchequer.

Martin Mansergh (Tipperary South, Fianna Fail)
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We do not have any information on that at the moment.

Martin Mansergh (Tipperary South, Fianna Fail)
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I move amendment No. 91:

In page 201, before section 61, to insert the following new section:

61.—(1) The Principal Act is amended by substituting the following for section 106B:

"106B.—(1) In this section 'housing authority' means—

(a) a housing authority, within the meaning of the Housing Acts 1966 to 2009, in connection with any of its functions under those Acts,

or

(b) the Affordable Homes Partnership established under article 4(1) of the Affordable Homes Partnership (Establishment) Order 2005 (S.I. No. 383 of 2005) in connection with the services specified in article 4(2) of that Order, as amended by the Affordable Homes Partnership (Establishment) Order 2005 (Amendment) Order 2007 (S.I. No. 293 of 2007).

(2) Stamp duty shall not be chargeable on any instrument giving effect to the conveyance, transfer or lease of a house, building or land to a housing

authority.

(3) Stamp duty on any instrument giving effect to the conveyance, transfer or lease of a house, building or land by a housing authority chargeable, as specified in Schedule 1, shall not exceed €100.".

(2) This section applies to an instrument executed on or after 1 April 2011.".

This amendment inserts a new section 61 and substitutes a new section 106B in the Stamp Duties Consolidation Act. Section 106B implies a stamp duty exemption on a conveyance of property by or to a housing authority or the Affordable Homes Partnership. There is no requirement to present the instrument to the Revenue Commissioners and as such there is no record of the transaction in Revenue's e-stamping system.

This would affect the collection of data for compiling house valuations both for the purposes of publishing a valuation database, to bring greater transparency to the housing market, and for the introduction of a site value tax, as proposed in the national recovery plan. On the other hand, applying a full stamp duty charge to such transfers could reduce the take-up of the enhanced tenant purchase scheme for local authority tenants which the Minister announced in the budget.

To meet these competing concerns, this amendment removes the stamp duty exemption in so far as this relates to a conveyance of property by the local authority or the Affordable Homes Partnership. Accordingly, such transfers will have to be presented to Revenue for stamping and details of the consideration will be recorded. However, the stamp duty payable will be limited to a maximum amount of €100 and such a low level of duty is unlikely to deter take-up of the tenant purchase scheme. The amendment will take effect for conveyances executed on or after 1 April 2011, and I commend this amendment to the Committee.

Brian Hayes (Dublin South West, Fine Gael)
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This was flagged by the statement made by the Minister on the night of the budget, I believe. It was welcomed at the time, in respect of removing stamp duty. In general, this amendment is welcome. On the question of valuation of social housing, given that there is such a reduction in the price of property generally across the economy, what is the mechanism for doing that, and what is market value now? As regards social housing, affordable housing or shared ownership, how is market value arrived at given the difficulties involved in establishing what it is?

Pearse Doherty (Donegal South West, Sinn Fein)
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With regard to section 62 and the different rates of stamp duty, the reduction as regards lower valued properties is to be welcomed, since people on low incomes were being penalised. I know the Government is getting rid of the exemption from stamp duty for properties under €127,000, so people who buy a very small house worth, say, €80,000 to €100,000 or whatever will now be subject to stamp duty. However, the Minister of State referred to the fact that properties valued at more than €1 million will be subject to the 2% rate as distinct from the existing 9% rate. There are still trophy houses on the market in the region of €5 million. Based on what the Minister of State has said, the reduction we are introducing in this Finance Bill is in the region of 7%, which would mean a total saving for somebody buying such a trophy house of, say, €350,000. How can this be reconciled with charging stamp duty on modest housing worth in the region of €120,000? There is a major saving to be made for those buying at the very high end of the market. The intention here is to stimulate the property market, which is not moving currently, but we have had situations before where all types of reliefs were introduced in Finance Bills and so called "section 23 reliefs" to stimulate the market.

We know where that got us. We need to be careful and to ensure those who have the ability to pay do so. This includes anyone buying at the high end of the market. Even if the direct saving from 9% to 2% does not amount to €350,000, and I understood it was tiered, the public could not countenance that type of saving as a result of the Finance Bill given that the State is trying to make savings. I would appreciate it if the Minister of State could subsequently reply.

Brendan Howlin (Wexford, Labour)
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As it is now 6 p.m. I am required to put the following question in accordance with an order of the Dáil of 25 January: "That the amendments set down by the Minister for Finance to Part 4 of the Bill and not disposed of are hereby made to the Bill and in respect of each of the sections undisposed of in the said part, that the section or, as appropriate, the section, as amended, is hereby agreed to."

Séamus Kirk (Louth, Ceann Comhairle)
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We will now commence the debate on Part 5, sections 63 to 66.

Michael Noonan (Limerick East, Fine Gael)
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Will the Minister of State read his briefing note on this section?

Martin Mansergh (Tipperary South, Fianna Fail)
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This section corrects unintentional drafting errors in sections 89(4), 102A(2) and 104(3) of the Capital Acquisitions Tax Consolidation Act 2003. Section 89(4) of the Act provides for a clawback of agricultural relief where agricultural property is disposed of within six years of acquiring a gift or an inheritance and is not replaced within one year of the disposal by other agricultural property.

Section 102A(2) provides for a clawback of agricultural and business relief in respect of the development value of development land where that land is disposed of after six years of acquiring a gift or an inheritance and within ten years of that date. Section 104(3) provides for a clawback of the CGT credit allowed against CAT where the property in respect of which the credit was given is disposed of within two years of acquiring a gift or an inheritance.

The section ensures that the clawback in sections 89(4) and 104(3) will apply where a disposal takes place on the date of the gift or inheritance. The section also ensures that the clawback of agricultural and business relief in respect of the development value of development land provided for in section 102A(2) will apply where such land is disposed of on the sixth anniversary of the date of the gift or the inheritance. The section applies to gifts and inheritances taken on or after 21 January 2011.

Michael Noonan (Limerick East, Fine Gael)
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This area of taxation is complex. I understand the Minister of State to mean that, up to now, a farmer who sold his farm to the NRA, for example, and used all the proceeds to buy more agricultural land was exempt from capital acquisitions tax. Will the Minister of State outline the implications for a farmer who gives a site to a son or daughter? What is the position if a farmer's daughter has planning permission for a site, thus making it development land, but disposes of the site without building thereon because she is nursing, then marries a man from Dundalk and moves on? If one has built on a site, is its value taken into account if it is disposed of within the six-year period? Is that governed by different sections of the Act?

Martin Mansergh (Tipperary South, Fianna Fail)
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This is only correcting very minor points. It is crossing t's and dotting i's so a particular date will not be taken from a pedantic legal point of view as not being covered by the legislation. There are no implications except those that apply at precedent.

This section is required because the Revenue Commissioners received counsel's opinion in a case involving a clawback of the capital gains tax credit allowed against capital acquisitions tax. In that case, counsel advised that, because the clawback provision referred to a period within two years after a gift or inheritance, the clawback did not apply where the disposal arose on the date of the gift. This is the way folks seem to interpret the law. I have always had a bit of an objection to that type of pedantic interpretation. However, that is the position and, therefore, provisions must be absolutely explicit or our learned brethren will find a way around them.

Related difficulties arise with the provisions for clawing back agricultural relief or business relief on gifts and the inheritance of development land. Section 64 amends the relevant sections to ensure that a disposal of the gifted inherited property, on the date of a gift in the case of CGT credit and agricultural relief or on the sixth anniversary of a gift or inheritance in the case of agricultural or business relief on development land, triggers a clawback of the relief in question. In other words, the measure is combating a pedantic interpretation of the clause. It is not contrary to the spirit of the measure. It is only aimed at those who might exploit a legal loophole. As we know, loopholes sometimes appear in law after the enactment of legislation without their having been in any sense the intent of the legislator. Anybody who operated the relief as intended would be unaffected by this measure. It has no particular implications for roll-over relief in the case of the NRA or in any other case.

Michael Noonan (Limerick East, Fine Gael)
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The Minister of State has answered my question. There is no policy change and the measure is closing a minor loophole.

Martin Mansergh (Tipperary South, Fianna Fail)
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I move amendment No. 92:

In page 205, subsection (1), lines 26 to 29, to delete paragraph (c) and substitute the following:

"(c) as if, in the definition of "threshold amount" in paragraph 1 of Part 1 of Schedule 2, the consumer price index number for the year 2009 applied to gifts and inheritances taken in the year 2011.".

This amendment corrects a drafting error in section 65(1)(c) of the Bill. The effect of that paragraph would be to disapply indexation entirely for gifts and inheritances taken in 2011. The intention is that the annual change in the CAT-free group thresholds from 1 January by reference to the consumer price index number for the previous year will not apply to gifts and inheritances taken in 2011. This amendment will achieve this result so the tax-free thresholds after indexation, which were reduced by approximately 20% in budget 2011 for gifts and inheritances taken on or after 8 December 2011, will also apply to gifts and inheritances taken in 2011.

I will outline the relevant tax-free thresholds that will apply to gifts and inheritances taken in 2011. The group A tax-free threshold, which broadly covers transfers from parent to child, is €332,084. The group B tax-free threshold, which broadly covers transfers between siblings, from children to parents, from grandparents to grandchildren, and from uncles and aunts to nephews and nieces, is €33,208. The group C tax-free threshold, which covers all cases not covered in groups A and B, is €16,604.

Brendan Howlin (Wexford, Labour)
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Amendments Nos. 94 and 95 are related to amendment No. 93 and they are to be discussed together.

Michael Noonan (Limerick East, Fine Gael)
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I move amendment No. 93:

In page 205, subsection (1)(a), lines 35 and 36, to delete " "30 September" for "31 October" " and substitute " "30 June" for "31 August" ".

This arose from the decision by the Minister in the draft finance Bill to bring forward the date of filing of tax returns on the part of certain taxpayers from 31 October to 30 September. I understand the Minister has agreed with Deputies Lowry and Healy-Rae-----

Martin Mansergh (Tipperary South, Fianna Fail)
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We are talking about income tax.

Michael Noonan (Limerick East, Fine Gael)
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In that case, will the Minister of State read his note?

Martin Mansergh (Tipperary South, Fianna Fail)
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These amendments relate to section 66, which brings forward the pay and file date in respect of gifts and inheritances from 31 October to 30 September. Section 46(2)(a) of the Capital Acquisitions Tax Consolidation Act 2003 provides that where the valuation date in respect of a gift or inheritance arises in the period from 1 January to 31 August in a year, tax must be paid and a return must be delivered on or before 31 October in that year.

Where the valuation date arises between 1 September and 31 December, tax must be paid and a return must be delivered on or before 31 October in the following year. Interest on outstanding tax runs from 1 November in the relevant year. In addition, there is a surcharge where a return is delivered after 31 October in the relevant year.

The effect of amendment No. 95, tabled by Deputy Noonan, would be to move the relevant date referred to in section 46(2)(a) of the Capital Acquisitions Tax Consolidation Act 2003 forward from 31 August to 30 June. In addition, the Deputy seeks consequential changes in regard to the provisions dealing with the date when interest on overdue tax becomes chargeable and the date when the surcharge for late returns arises.

As the amendments proposed by Deputy Noonan would reduce the yield from gift tax and inheritance tax by €30 million in 2011 because of the shortening of the relevant period referred to in section 46(2)(a) of the Capital Acquisitions Tax Consolidation Act 2003, I am not in a position to accept them, especially given the current state of the public finances.

Brendan Howlin (Wexford, Labour)
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We have reached the end of section 66, our consideration of which was to conclude at 7.30 p.m. As we are ahead of schedule, I propose that we move directly on to section 67 and amendment No. 95a in the name of Deputy Noonan, which is on the additional list of amendments circulated today and proposes the insertion of a new section.

Michael Noonan (Limerick East, Fine Gael)
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I move amendment No. 95a:

In page 206, before section 67, but in Part 6, to insert the following new section:

"67.--In respect of Section 14 (Annual Returns) of the Industrial and Provident Societies Acts 1893 (the 1893 Act):

(a) to delete "March" and substitute "August", and

(b) to delete "one month" and substitute "four months".".

Martin Mansergh (Tipperary South, Fianna Fail)
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This amendment substitutes dates in the 1893 Act. The Department of Enterprise, Trade and Innovation has no objection in principle to the amendment. However, it should be made in the context of amendments to the relevant Department of Enterprise, Trade and Innovation legislation after proper consideration. I am not able to accept the amendment to the Finance Bill, but it should be possible to have it enacted in the appropriate legislation.

Michael Noonan (Limerick East, Fine Gael)
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Has the appropriate Department any planned legislation that could serve as a vehicle for this amendment in the near future?

Martin Mansergh (Tipperary South, Fianna Fail)
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I am afraid that is beyond my knowledge. Naturally, a new Government will order legislation. I do not doubt there will be an opportunity in the reasonably near future to make the change.

Michael Noonan (Limerick East, Fine Gael)
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In view of the Minister of State's reply, I will withdraw the amendment.

Joan Burton (Dublin West, Labour)
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I understand this section refers to the mandatory disclosure of information regarding people who are arranging particular tax transactions and may be involved in fairly aggressive tax planning. Will the Minister of State read out his note on this section so that we might have a sense of what is intended?

Martin Mansergh (Tipperary South, Fianna Fail)
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Section 68 amends section 817M of the Taxes Consolidation Act 1997, which is concerned with the provision by promoters to the Revenue Commissioners of details of clients to whom certain disclosable transactions were made available for implementation. This provision forms part of the legislation governing the mandatory disclosure of certain transactions regime, which was introduced in the Finance Act 2010 and was followed by regulations on 17 January 2011.

During a consultation process on the proposed regulations last summer, concerns were raised regarding taxpayers being identified to the Revenue Commissioners in circumstances where those taxpayers may not have undertaken the transactions concerned. This section modifies the original provision to remove the disclosure obligation on promoters where they are satisfied the client did not undertake the transaction at the time in question. If the transaction is undertaken at a later time, the client's details must be disclosed in a normal way. The regulations will be amended in due course to take account of this change.

Joan Burton (Dublin West, Labour)
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Is the section designed to deal with people involved in aggressive tax planning so that the people who might be the beneficiaries of said planning can be identified to Revenue? As I might not understand the section correctly, perhaps the Minister of State will clarify the situation.

Martin Mansergh (Tipperary South, Fianna Fail)
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That is my understanding. The transaction needs to have been made. If it is merely discussed and not acted upon, the situation is different.

Joan Burton (Dublin West, Labour)
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Do the Minister of State's officials have a view on how much income has been lost to Revenue through these aggressive forms of tax planning?

During the past year or more, a great deal of information has emanated about people with deposit accounts in Switzerland in particular that have been used to avoid tax. In well publicised cases, whistleblowers there have identified people from various jurisdictions who have been salting money away from the prying eyes of tax collectors. I would not be surprised if some of those people were from Ireland.

In the interests of ensuring aggressive tax planning does not occur, perhaps the Minister of State could inform the House about the situation pertaining to people with non-resident deposits in tax havens like Switzerland and Austria where banking regulations are extraordinarily secretive. For example, we know from The FitzPatrick Tapes of a strange transaction involving Anglo Irish Bank, which took the Taoiseach out golfing and so on at various intervals prior to the State's guarantee of the bank. He was telephoned in Singapore and attended a dinner hosted by Anglo Irish Bank in Heritage House just before he became Taoiseach. In July 2008 before the bank guarantee there was the famous round of golf and dinner afterwards with various Anglo notables. It has always intrigued me that the purpose of these contacts made by Mr. FitzPatrick was, presumably, to plead with the Taoiseach that the bank needed deposits from the National Treasury Management Agency. At or around the time of the guarantee, this bank had a subsidiary in Austria where banking secrecy is extreme. Lo and behold, shortly after the guarantee, this bank which desperately needed deposits, sold the Austrian subsidiary with about €600 million in deposits. What has always intrigued me is how did a bank, which was begging for deposits, sell a subsidiary bank with deposits of €600 million. Was this connected to tax avoidance transactions?

Brendan Howlin (Wexford, Labour)
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We need to deal with section 68.

Joan Burton (Dublin West, Labour)
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I have written to the Minister for Finance on several occasions on this matter. Was this connected to tax avoidance? Were the depositors in that bank-----

Brendan Howlin (Wexford, Labour)
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I do not think the Minister of State is in a position to answer particular questions relating to correspondence the Deputy has had with the Minister. They cannot be answered on the floor of the House now. I ask the Deputy to deal with the specific details of section 68.

Joan Burton (Dublin West, Labour)
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The section describes transactions and persons and contains a reference to promoters. The transfer of large deposits of money from the Irish jurisdiction to tax havens by means of promoters or to places where there is a practice of banking secrecy, is the highest form of aggressive tax avoidance management that I am aware of. The Minister will remain a Minister for the duration of the general election and until the new Government is formed. I have written to the Minister for Finance about this on a previous occasion. I understand the Minister of State does not have an answer to hand but this is a very murky area of aggressive tax planning. Will the Minister of State arrange-----

Brendan Howlin (Wexford, Labour)
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This is not the occasion to question the Minister of State on those positions.

Joan Burton (Dublin West, Labour)
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-----for the officials to write to me?

With regard to what is described as the mandatory disclosure regime, can the officials advise the Minister of State why this amendment was introduced unless they were certain that certain promoters of schemes were able to avoid examination of the schemes by the Revenue Commissioners? I ask the Minister of State to give the background to the amendment.

Martin Mansergh (Tipperary South, Fianna Fail)
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I am unable to give the background details but it is an ongoing if not an eternal battle between Revenue and governments against tax evasion and either aggressive forms of avoidance or tax evasion. The Deputy is a member of the Joint Committee on Finance and the Public Service and will be aware that a great deal of progress has been made in extending double taxation agreements, taxation information, exchange schemes and narrowing the space in which jurisdictions which have been very happy to welcome deposits in the utmost secrecy, without inquiring too much into their legality in terms of the law of the country from which they come, can operate. More work remains to be done and disclosures were made with regard to Liechtenstein. The United States in particular, has been very strong on this. The German Social Democrat Minister for Finance, Peer Steinbrück, was exceptionally strong. He and his French counterpart organised some meetings to deal with this matter and Ireland has always been supportive. In one respect, Ireland has a law on tax evasion that is without counterpart in any other country, which allows for the quarterly publication of lists of defaulters and penalties. I have been informed by both German and British delegations that although they are quite impressed, they did not think this would work in their jurisdictions. Ireland is ahead of the posse in that respect.

This provision only applies where no scheme has been implemented. Revenue does not want to know who might have looked at a scheme so long as they did not bite.

Michael Noonan (Limerick East, Fine Gael)
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I move amendment No. 96:

In page 206, to delete lines 27 to 35 and substitute the following:

" "(c) Where the Revenue Commissioners issue a notice of attachment in respect of any amount of money due by the relevant person to the taxpayer as emoluments under a contract of service, and where the relevant person is controlled by the taxpayer within the meaning of Section 10, the notice may provide for the payment by the relevant person of the amount of the default out of the emoluments, after taking account of statutory deductions, over a period specified in the notice.",".

Section 70 amends section 1002 of the Taxes Consolidation Act 1997 which is concerned with Revenue's power of attachment in respect of outstanding debt. Revenue will now be able to issue a notice of attachment in respect of emoluments and may provide for the attachment of such emoluments to be spread over a period of time. The amendment is drafted to modify this provision and to focus it more acutely where the Revenue Commissioners issue notice of attachment in respect of any amount of money due by the relevant person to the taxpayer as emoluments under a contract of service and where the relevant person is controlled by the taxpayer within the meaning of section 10, the notice may provide for the payment by the relevant person of the amount of the default out of the emoluments after taking account of statutory deductions over a period specified in the notice.

Martin Mansergh (Tipperary South, Fianna Fail)
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Before I reply to Deputy Noonan's amendment, I need to mention some matters before the conclusion of Committee Stage.

Before continuing with today's proceedings, I would be obliged if, in accordance with Standing Order 136, the Ceann Comhairle would direct the Clerk of the Dáil to make the following minor drafting correction to the text of the Bill. The correction is as follows: in paragraph (d) at the end of page 41, the reference to section 784(3) should read, section 784C(3).

I also wish to give notice that the Minister will be moving two amendments on Report Stage. First, an amendment to a section of the Bill, as amended on Committee Stage, to deal with the taxation of excess remuneration paid to persons employed in an institution that has received financial support under either the Credit Institutions (Financial Support) Act 2008 or the National Pensions Reserve Fund Act 2000. Second, an amendment deleting section 18 of the Bill, as amended in its entirety on Committee Stage. This section deals with self-assessment pay and file.

Brendan Howlin (Wexford, Labour)
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Notice will be taken for report of the Minister's announcements. Is the instruction to the Ceann Comhairle acceptable?

Michael Noonan (Limerick East, Fine Gael)
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It is acceptable.

Brendan Howlin (Wexford, Labour)
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That is agreed.

Martin Mansergh (Tipperary South, Fianna Fail)
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I will deal with amendment No. 96 regarding the attachment of debt. Attachment is an enforcement option available to the Revenue Commissioners to recover unpaid tax, unpaid interest or unpaid penalty due by taxpayers who have ignored the normal collection approaches and notification procedures taken by Revenue. Attachment is used judiciously by Revenue in accordance with strict guidelines which require that any decision to use attachment must be approved at principal officer or nominated assistant principal officer level. A number of amendments to the attachment provisions are being made in the light of the experience of the Revenue Commissioners to make them more effective in the pursuit of tax defaulters who have ignored all reasonable attempts by Revenue to collect taxes in default and to improve efficiencies in certain situations.

When attachment was introduced in 1988, attachment of emoluments was not regarded as necessary by reference to the circumstances that prevailed at the time. However, circumstances have since changed and many persons now carrying on trades and professions also derive emoluments from directorships and employments. In addition, certain persons carrying on trades and professions have ceased those activities leaving undisputed tax liabilities unpaid. Where these people have directorships or employments, it is appropriate that they should meet their tax debts of previous and current years whatever the source of their resources. Where this is not done on a voluntary basis, it is appropriate that the Revenue Commissioners have the use of the attachment procedure where necessary to recover these debts. I emphasise that attachment is used by the Revenue Commissioners only where all normal collection attempts have been ignored by the taxpayer.

If the amendment was accepted, it would seriously restrict the Revenue Commissioners' ability to recover outstanding debts in circumstances where the individual had ceased trading leaving substantial unpaid tax liabilities and was now in employment where due to the level of net income it was deemed appropriate to use the attachment procedure. In these circumstances, I cannot accept the amendment.

Michael Noonan (Limerick East, Fine Gael)
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I wish to hear the comments of the Minister of State on this section.

Martin Mansergh (Tipperary South, Fianna Fail)
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Section 73 formalises taxpayer confidentiality. The need for such provision arises because of the volume and comprehensiveness of personal and commercial information concerning taxpayers which Revenue acquires. At present, there is no specific tax-related provision other than the statutory declaration made by inspectors in respect of Schedule D tax and corporation tax governing confidentiality requirements. Reliance is placed on the absolute ban imposed by the Official Secrets Act on civil servants revealing any information acquired in an official capacity. This section provides a specific tax-related provision which will reassure taxpayers that personal and commercial information revealed for tax purposes is protected against unauthorised disclosure. In other words, this strengthens by being specific the rights of the taxpayer.

Michael Noonan (Limerick East, Fine Gael)
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I wish to hear the comments of the Minister of State on this section.

Martin Mansergh (Tipperary South, Fianna Fail)
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This concerns payment of tax by relevant payment methods. This section provides that tax can be paid to Revenue by credit card, debit card or any other method or methods of payment which is or are approved by the Revenue Commissioners. The section enables the Revenue Commissioners to make regulations relating to these payment methods. This measure is a customer service initiative to provide taxpayers with additional options for the payment of taxes and duties and will give them greater flexibility for making payments while also facilitating voluntary compliance.

Michael Noonan (Limerick East, Fine Gael)
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I presume the Revenue Commissioners accept payment in cash.

Martin Mansergh (Tipperary South, Fianna Fail)
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I think so, yes.

Michael Noonan (Limerick East, Fine Gael)
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Will they accept payment in cash other than in euro?

Martin Mansergh (Tipperary South, Fianna Fail)
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Cash other than in euro?

Michael Noonan (Limerick East, Fine Gael)
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Yes. Many people have sterling around, as we know.

Martin Mansergh (Tipperary South, Fianna Fail)
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Any currency that is not euro must be converted to euro prior to payment.

Question put and agreed to.

Martin Mansergh (Tipperary South, Fianna Fail)
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I move amendment No. 97:

In page 213, before section 76, to insert the following new section:

76.—(1) Schedule 24A to the Principal Act is amended—

(a) in Part 1 by inserting the following before paragraph 1:

"1A. The Double Taxation Relief (Taxes on Income) (Republic of Albania) Order 2011 (S.I. No. 16 of 2011).",

(b) in Part 1 by substituting the following for paragraph 2:

"2. The Double Taxation Relief (Taxes on Income) (Republic of Austria) Order 1967 (S.I. No. 250 of 1967), the Double Taxation Relief (Taxes on Income and Capital Gains) (Republic of Austria) Order 1988 (S.I. No. 29 of 1988) and the Double Taxation Relief (Taxes on Income and Capital Gains) (Republic of Austria) Order 2011 (S.I. No. 30 of 2011).",

(c) in Part 1 by substituting the following for paragraph 14:

"14. The Double Taxation Relief (Taxes on Income and Capital and Gewerbesteuer (Trade Tax)) (Federal Republic of Germany) Order 1962 (S.I. No. 212 of 1962) and the Double Taxation Relief (Taxes on Income and on Capital) (Federal Republic of Germany) Order 2011 (S.I. No. 31 of 2011).",

(d) in Part 1 by inserting the following after paragraph 15:

"15A. The Double Taxation Relief (Taxes on Income) (Hong Kong Special Administrative Region) Order 2011 (S.I. No. 17 of 2011).",

(e) in Part 1 by inserting the following after paragraph 22:

"22A. The Double Taxation Relief (Taxes on Income) (State of Kuwait) Order 2011 (S.I. No. 21 of 2011).",

(f) in Part 1 by substituting the following for paragraph 26:

"26. The Double Taxation Relief (Taxes on Income) (Malaysia) Order 1998 (S.I. No. 495 of 1998) and the Double Taxation Relief (Taxes on Income) (Malaysia) Order 2011 (S.I. No. 32 of 2011).",

(g) in Part 1 by inserting the following after paragraph 27A:

"27B. The Double Taxation Relief (Taxes on Income) (Montenegro) Order 2011 (S.I. No. 18 of 2011).

27C. The Double Taxation Relief (Taxes on Income) (Kingdom of Morocco) Order 2011 (S.I. No. 19 of 2011).",

(h) in Part 1 by inserting the following after paragraph 35A:

"35B. The Double Taxation Relief (Taxes on Income) (Republic of Singapore) Order 2011 (S.I. No. 34 of 2011).",

(i) in Part 1 by substituting the following for paragraph 38:

"38. The Double Taxation Relief (Taxes on Income and Capital Gains) (Republic of South Africa) Order 1997 (S.I. No. 478 of 1997) and the Double Taxation Relief (Taxes on Income and Capital Gains) (Republic of South Africa) Order 2011 (S.I. No. 33 of 2011).",

(j) in Part 1 by inserting the following after paragraph 41A:

"41B. The Double Taxation Relief (Taxes on Income and Capital Gains) (United Arab Emirates) Order 2011 (S.I. No. 20 of 2011).",

(k) in Part 3 by inserting the following after paragraph 1:

"1A. The Exchange of Information Relating to Tax Matters (Antigua and Barbuda) Order 2011 (S.I. No. 22 of 2011).

1B. The Exchange of Information Relating to Tax Matters (Belize) Order 2011 (S.I. No. 23 of 2011).",

(l) in Part 3 by inserting the following after paragraph 2:

"2A. The Exchange of Information Relating to Taxes (British Virgin Islands) Order 2011 (S.I. No. 24 of 2011).",

(m) in Part 3 by inserting the following after paragraph 3:

"3A. The Exchange of Information Relating to Tax Matters (Cook Islands) Order 2011 (S.I. No. 25 of 2011).",

and

(n) in Part 3 by inserting the following after paragraph 8:

"8A. The Exchange of Information Relating to Tax Matters (Republic of the Marshall Islands) Order 2011 (S.I. No. 26 of 2011).

8B. The Exchange of Information Relating to Tax Matters (Saint Lucia) Order 2011 (S.I. No. 27 of 2011).

8C. The Exchange of Information Relating to Tax Matters (Saint Vincent and the Grenadines) Order 2011 (S.I. No. 28 of 2011).

8D. The Exchange of Information Relating to Tax Matters (Samoa) Order 2011 (S.I. No. 29 of 2011).".

(2) This section applies as on and from the date of the passing of this Act.".

The purpose of this amendment is to amend Part 1 and Part 3 of Schedule 24A of the Taxes Consolidation Act 1997. This schedule lists all international tax agreements entered into by Ireland. Part 1 lists all the existing double taxation agreements and Part 3 lists all the tax information exchange agreements. As I stated earlier, many Members of the House will be familiar with these from meetings of the Committee on Finance and Public Service. The amendment adds seven countries to the list of countries in Part 1 with which the State has entered into a double taxation agreement, DTA, and eight countries or territories to the list of countries or territories in Part 3 with which the State has entered into a tax information exchange agreement, TIEA. It also adds four protocols to update the provisions of four existing double taxation agreements.

Double taxation treaties are widely regarded as critical pieces of fiscal infrastructure for developing substantial bilateral trading and investment opportunities by reducing tax impediments that might otherwise deter cross-border activity. To ensure that Irish business remains competitive and that Ireland remains an attractive destination for foreign direct investment we have been rapidly expanding our double tax treaty network. The six new double taxation agreements are with Albania, Hong Kong, Kuwait, Montenegro, Morocco, Singapore and the United Arab Emirates. The addition of these six agreements - I am sorry, as I may have misled the House; I count seven rather than six. The addition of these seven agreements will bring to 62 - or possibly 63 - the number of double taxation agreements that Ireland will have ratified.

The four protocols are under the existing double taxation agreements with Austria, Germany, Malaysia and South Africa. These protocols provide for the updating of the exchange of information articles in the Malaysian, Austrian and South African agreements. The protocol to the German double taxation convention updates the convention to reflect the current taxation laws of both countries. The protocol to the South African agreement as well as updating the exchange of information article also reflects the change in the taxation laws of South Africa with regards to taxation on dividends.

Tax information exchange agreements are also important international agreements which strengthen the ability of the revenue authorities in both countries to enforce their tax laws and thereby encourage the development of closer economic relations between both countries. The eight TIEAs are with Antigua and Barbuda, Belize, the British Virgin Islands, the Cook Islands, the Marshall Islands, St. Lucia, St. Vincent and the Grenadines and Samoa. These will bring to 17 the number of tax information exchange agreements that Ireland will have ratified.

All of these agreements have been considered and approved by the Committee on Finance and the Public Service on 15 December 2010 as part of their ratification process. The addition of these 19 countries or territories to schedule 24A is the final step in the legislative and ratification procedure that will ensure that these agreements will have the force of law.

Michael Noonan (Limerick East, Fine Gael)
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The proposed section 76(1)(d) is on the double taxation relief on taxes on income with Hong Kong. The Minister of State will recall that we had a discussion-----

Martin Mansergh (Tipperary South, Fianna Fail)
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We had an exchange.

Michael Noonan (Limerick East, Fine Gael)
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-----about this at a committee meeting. I am not fully convinced that the withholding tax on transfers from Hong Kong is appropriate and may continue to be a disincentive for investment in the Irish Financial Services Centre.

Has the Minister of State or his officials had any second thoughts on the matter?

Martin Mansergh (Tipperary South, Fianna Fail)
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No. If the Deputy recalls I gave him a note on that.

Michael Noonan (Limerick East, Fine Gael)
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The Minister of State said he was doing it because he thought there might be a vehicle for evasion; one could say that about anything.

Martin Mansergh (Tipperary South, Fianna Fail)
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I will give the House the gist of it. Hong Kong has a territorial taxation system under which foreign-sourced income including interest will not be sourced in Hong Kong. Furthermore Hong Kong does not have a withholding tax on interest payments paid to non-residents. These features of its tax system could open up possibilities of aggressive tax planning involving the Ireland-Hong Kong double taxation agreement. Ireland's usual treaty policy is to seek nil withholding rates for interest payments. However, to avoid double non-taxation a 10% rate was agreed to be included in the treaty. I am afraid there has been no consideration of this, but like everything else the next Government will be free to have a look at it if it wishes.

Michael Noonan (Limerick East, Fine Gael)
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The Minister of State should not be giving up too soon.

Martin Mansergh (Tipperary South, Fianna Fail)
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I did not say who would form the next Government.

Joan Burton (Dublin West, Labour)
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Fine Gael has not closed off the Fianna Fáil option and Deputy Martin has already suggested it.

Séamus Kirk (Louth, Ceann Comhairle)
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Let us not get off on a tangent from the real issue here.

Martin Mansergh (Tipperary South, Fianna Fail)
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I do follow developments.

Joan Burton (Dublin West, Labour)
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Tallaght in reverse.

Bernard Durkan (Kildare North, Fine Gael)
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Are there any specific investment locations with which Ireland has not had a double taxation agreement or with which we propose to have a double taxation agreement? Are there any obvious places which might have been a location for investors in this jurisdiction?

Martin Mansergh (Tipperary South, Fianna Fail)
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The principal one with which we are working at the moment is Brazil, which is a very large economy. The Deputy will have heard of the phrase, the BRIC countries, which are major countries in the developing world. He can do the arithmetic for himself; if we have approximately 70 double taxation agreements and there are more than 200 countries in the world, we have some way to go. We prioritise those with which we have either trading or commercial relations. This is an area that has been expanding very rapidly. While I do not know if it is true today, it was certainly true four or five years ago that with the exception of Singapore, Ireland is practically the most globalised economy in the world and so obviously we need these agreements because we are trading with many different countries. The negotiations with Brazil are slow, but we are continuing to negotiate. We are also negotiating with Saudi Arabia, Qatar and the Philippines.

Martin Mansergh (Tipperary South, Fianna Fail)
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I move amendment No. 98:

In page 217, line 4, to delete "2011" and substitute "2010".

Martin Mansergh (Tipperary South, Fianna Fail)
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I move amendment No. 99:

In page 217, line 14, to delete "2011" and substitute "2010".

Amendment agreed to.

Martin Mansergh (Tipperary South, Fianna Fail)
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I move amendment No. 100:

In page 217, line 22, to delete "2011" and substitute "2010".

Martin Mansergh (Tipperary South, Fianna Fail)
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I move amendment No. 101:

In page 219, lines 32 and 33, to delete paragraph 13 and substitute the following:

"13. Section 88(5) of the Principal Act is amended by substituting "paragraph (a) or (c) of section 3" for "section 2(1)(a)".".