Pearse Doherty (Donegal South West, Sinn Fein) | Oireachtas source

I have read out my amendment which is concerned with the insertion of material, therefore, I do not know the reason it would have the effect of deleting section 16. However, there is no point in arguing about this. It does not call for the deletion of any lines but simply proposes the insertion of additional lines to provide for the review of the measure. I revert to the original point about the three-year period being far too long. This measure should be reviewed before three years elapse. I presume that a review of some sort on this measure will be done next year in any event.

There are measures that have been sign-posted in finance Bills. The Special Assignee Relief Programme, SARP, which reduces the income of key employees from other countries who relocate here, has not been effectual. On the research and development tax credit for key employees, there have been two amendments to finance Bills, and on the third amendment we know that there is only seven taking it up.

Even to take it from the opposite side of the coin rather than ask are these high earners abusing this to write down their tax liability, let us look at whether we are getting into the system the credit for which this was designed. The Minister will review it anyway. The problem is that the Minister will more than likely review it from only that end. For a start, there was no built-in review for the research and development tax credit for key employees, but IDA Ireland says this is not working and it undertakes a review. Somehow somebody gets to ear of the Minister for Finance and then there are amendments to these sections every year until they start to become effective or until we get rid of them.

As far as I understand it, the business expansion scheme did not work either. Am I correct in saying so? There were a number of schemes which have morphed into each other. I am not suggesting the Minister dump these merely because they have not worked, because we must try as much as possible to get credit flowing, create jobs, get enterprise going and get new businesses. The Minister takes risks with such matters but when he does so, he must put up the shutters as well and have his defences in order. If the Minister is to open up the game, he needs to ensure that he is in a position to close the gates as well. In three years' time, it could be far too late to try to close the gates on this scheme.

No doubt former Ministers for Finance sat where Deputy Noonan is and gave a line about why it was so important to allow for a tax designation to build houses around Leitrim. I can remember the arguments at the time about the high level of unemployment, construction skills, etc. One should look at it now. The same could be said of the arguments about the reliefs for hotels or nursing homes, or other property-related reliefs such as on section 23. The arguments put forward as to their necessity at that time would all have been justifiable from the perspective of what was happening in the economy. Somebody was in the ear of the then Minister, somebody had lobbied for the need for it, there was probably a good spiel given, the Minister or the Department accepted the argument, and they put it forward. The big problem, because the Ministers at the time took risks and those risks have proven to be damaging on a number of fronts, is we never reviewed them, or if we did, we did not do it properly.

The Department is carrying out systematic sectoral reviews, for example, it has done the review on the research and development tax credit for key employees, but when we introduce such measures in a finance Bill we need to include some type of informal 12-month review. As soon as the data becomes available when taxpayers start making their returns, we need to be able to sit down with that preliminary data and ask at what would be the first glimpse of the effect of this section of the Finance Act, how well it is working. If there are not alarm bells ringing there then one can conduct the formal review involving the consultation process on how the measure would be enhanced or fitted, or whatever needs to be done.

When we introduce measures such as this in the Finance Bill, we should also build in provisions, not on how we will carry out the review but on the information that should be provided so that there can be a review. For example, as the Minister will be well aware, I have asked countless questions on how SARP is working, etc. There was a promise on one occasion, probably a misguided quote by the Minister for Social Protection, that every SARP employee was supposed to bring in 20 jobs, but that is not what the application form states. If one is applying for such measures, we should ensure that the Revenue is able to collate enough information so that 12 months later we will be able to hold an effective review and will not be merely looking at tax returns where we would not be able to quantify their effect.

This goes further than this measure, it goes to the core of the point that as we take chances in a finance Bill to introduce measures, we must be in a position to review those within a 12-month period as soon as the preliminary data becomes available and design them in a way that provides Revenue with enough information so that we can have an effective review. Three years down the road is far too long.

The review should not be merely an internal departmental review. It should be a review that is shared here because all of us need to take ownership of this legislation. If the Minister gets it wrong, we can tell him he got it wrong and we told him so, but it will be too late at that stage because the damage will be done. There must be proper scrutiny of legislation. As I have stated previously on other Bills, the passage of a Bill should not be the end of it. We need to be reviewing the effect of legislation, in particular, financial legislation. One of the big problems in Irish society over the past decade is that we have not done so effectively or efficiently enough.