Mr. Fergal O'Brien:

If there were payroll taxes outstanding to the State, then that is a possibility but again I think it would probably be at the margins.

A more substantive issue is that if it becomes perceived as a tax on work, it acts as a disincentive for people to take up employment and one is undoing the rationale for having a property tax in the first place. If we are going to have a property tax, it must be a real one and not a de facto tax on work. It must not become perceived as a tax on work and a disincentive to take up a job. That is much of the feedback we have got from our members in recent times.

However, I think there are ways around that and again it all depends on how one frames this. The default option should not be for this to be delivered straightaway through the income tax credit system.

That should almost be the collection of last resort. We know there has been an issue around payment and compliance with the property charges that have already been introduced. Therefore, I can understand the Government's rationale for opting and wanting to collect the tax in this way but it should not be the first port of call, it should be the last resort in terms of a collection mechanism for the tax. People should be provided with the other options first and failure to pay in some cases could resort to adjustments to their personal tax credits system.

On the issue of access to credit for SMEs, there is no question but that this is still the single biggest issue for SME members. A number of things could be done in the budget to address the difficulty. On the specific issue of the State-backed investment bank, this works well internationally in cases where banking systems are not in turmoil or in a crisis such as in Germany and Canada. The crucial thing is that it is part of a range of options in terms of SME finance. One of the lessons that has to be learned from the crisis is that Ireland was the most reliant economy on bank lending for SMEs than anywhere else in Europe. That will change over time and was a consequence of the easy access to credit. The State has a role to play, be it perhaps through funds at our disposal through the National Pensions Reserve Fund and in time through a State-backed investment bank. Some of the other suggestions in our submission would be around our employment investment and incentive scheme, a follow-on from the business expansion scheme, which is an excellent opportunity to get funding into SMEs. That scheme is not working for various reasons. It is obviously a tough investment climate but the set-up of that scheme is not working. Traditionally the business expansion scheme worked because it was able to draw on a relatively small pool of high net worth individuals who were happy to invest in businesses. For various reasons, wealth destruction and changes to the tax system-----