John Ellis (Fianna Fail)

This probably is a nostalgic occasion because it more than likely is my last statement on a Finance Bill in this House. I have been in the Oireachtas for at least 34 or 35 such Bills since 1977 and while there have been severe budgets that were perceived by the public as being too harsh, none has been as harsh as this one. Harsh budgets have been introduced previously and as a political party, Fianna Fáil has been obliged to make the public endure some harsh penalties. When the late father of the Minister of State, Deputy Haughey, became Taoiseach in 1987, I remember that Fianna Fáil entered government and was obliged to introduce immediately a Finance Bill that really hurt people. The same position obtains today.

However, future Governments must note that our regulatory system failed us entirely on all fronts. The regulators kept it to themselves with, regrettably, the full collusion of some senior civil servants in the Department of Finance who, if the regulators were doing their jobs, must have been aware of what was going on. Sadly, those concerned have got away scot-free without being examined properly by the Oireachtas. They retired, bid a last farewell and left behind the mess. These people were put in charge and I do not believe that any Minister for Finance or Taoiseach of the day, irrespective of party, should be obliged to be responsible for knowing what the regulator has been told without being so informed themselves. This issue must be considered. Another point that future Governments must consider pertains to the type of backup they will have. Governments should be entitled to introduce their own senior personnel to act as backup alongside the civil servants in respect of how Departments are run. While that is all I wish to say in this regard, we definitely have been let down by the regulatory authorities who undeniably allowed what has happened in Ireland to take place. While the present regulatory authorities may be overactive in some ways, a positive outcome therefrom is that there will be regulation and the political system will be informed as to what the regulators are doing and what is happening.

People ask what benefits accrued from the boom. Members are aware that while many benefits flowed from the good times, many have been forgotten about quickly. One should consider the quantity of new infrastructural developments that were put in place, such as new roads, motorways and so on, as well as the upgrading of other roads and road improvements right down to the most minute country cul-de-sac. These benefits will endure for years to come, although one must take care in future not to allow what has been put in place to begin to disintegrate for lack of investment. This issue must be taken into account by whoever is in office in future. I noted that one benefit that has been left behind is the new motorway network but I also refer to many other infrastructural items, such as new schools and water and sewerage schemes, that will serve generations in the future.

I have some gripes in respect of this Finance Bill and all Members are aware of the constraints placed on the Government in respect of its drafting. It basically was a case of drafting the Finance Bill with one's hands tied as one was obliged to come within certain parameters. However, attacks have been made on certain areas that are detrimental to improving the economy, with one such attack being the imposition of carbon taxes. While everyone accepts that our carbon footprint must be reduced, carbon taxes affect rural people much more severely than they do urban people. People are obliged to use cars to get to and from town and they do not have the option of using public transport. I also believe that the increased costs associated with carbon taxes will have a serious effect on a considerable segment of industry.

Moreover, I believe and will not be convinced otherwise that the recent increase in fuel prices will have a major effect on rural and farming communities. Agriculture is completely dependent on fossil fuels such as diesel oil and so on which comprise a major part of the farming community's production expenses. Moreover, while there were protests when the price of petrol reached €1 per litre, the price now is approximately €1.40. There has been a phenomenal increase in the cost of doing one's daily business, which has a knock-on increase in the cost for industry. The Government should have included a provision to the effect that whatever VAT increase came about as a result of the increase in price would be offset from the carbon charges that were put in place. This was one way in which this measure could have been balanced and it would have been cost-neutral to the budget. At present, the increase in fuel prices will increase the amount of VAT that is being paid by the consumer, who will not get back any benefit. This could have been offset by reducing the carbon taxes that had been put in place as a means of trying to balance matters, rather than allowing an increase in fuel prices to become a revenue-raising operation for the State. Something should have been done in this regard.

Many of my colleagues have discussed the proposed changes in respect of section 23 reliefs. I believe these proposals are not constitutional because people entered into such section 23 related contracts in the belief that they had the write-off benefits for the full lifetime of the project or property. It is not possible in business to tell people that they have a five-year guarantee, only to tell them halfway through that they only have a two and a half year guarantee. This would not stand up and while I acknowledge this proposal is to be reviewed, the incoming Government of whatever shade should take note that tampering too much with the section 23 provisions will have serious knock-on effects for those who have invested in section 23 property. This must be taken into account.

While there is need for real political debate on this Bill, sadly people are so anxious to interview the public by means of a general election that they are forcing through a Bill that in every other year has been allocated at least two to three weeks in the Dáil and at least two weeks in this House. For political expediency, however, people are trying to drive it through in the space of a few days. This is not in the best interests of either democracy or the public, who all Members are meant to serve. People are playing short-term political tactics on this matter and I do not agree with so doing.

One aspect of this Bill which annoys me is section 26 concerning the abolition of patent tax exemption. One might argue that people will derive benefit from their patents in some other way, such as through the manufacturing process or whatever. However, this is similar to the exemption for artists and others that was introduced by the late father of the Minister of State, Deputy Haughey, and which made a tremendous contribution to Ireland. It encouraged people to become involved and encouraged artists to remain in Ireland rather than setting up base elsewhere. I refer in this context to the international acclaim garnered by some of our artists, musicians and actors. The measure was a great success. The abolition of the patent tax exemption is wrong and the net result of it will be that if somebody has patents, rather than setting up an operation in Ireland he or she may decide to operate from a more attractive tax base. Perhaps it could be re-examined with regard to how people can be encouraged to become involved.