Sean Barrett (Independent) | Oireachtas source

The good transaction described by Professor Barry is the research and development tax credit, whereas the issue at which I look askance is tax avoidance. It is difficult to split the two.

Listening to Professor Barry's reference to the number of people who had to be brought into the country to fill posts in certain companies, I noted that we do not have the relevant policies evaluated when we discuss amendments and so forth to the annual Finance Bill. We could be giving a substantial number of tax breaks to intervene in labour markets in other countries on the basis that, as Professor Barry noted, we have neglected language teaching. This is part of general policy evaluation which does not appear to take place for tax breaks.

This year, the Finance Act included a tax break to aircraft leasing companies for the construction of hangars to house aircraft. The airline industry informs us that it is extremely profitable and Ireland performs very well in this sector. What is the point of providing a tax break in this area if one does not evaluate what one receives in return? This is a recurring issue. Professor Bill Kingston, who is a colleague of both Professor Barry and mine, is so despairing of this practice, particularly since the rescue of banks at considerable expense to taxpayers, that he describes it as the end of Schumpeterian capitalism. In Professor Kingston's view, one will have so much lobbying that hardly any productive activity will take place. This is a strong way of putting the argument. I am worried, however, that firms are diverting resources into this area rather than producing goods and services.

Members will raise some of these points tomorrow when representatives of the Revenue Commissioners come before the joint sub-committee. Professor Barry's treatment of the issue has been extremely interesting and the three hours have passed quickly. I thank him for appearing before us.