Seán Canney (Galway East, Independent) | Oireachtas source

I thank the witnesses for their opening remarks and their plain speaking on the issues under discussion. I will make a number of comments on which I ask for responses. We are in the throes of passing the Climate Action and Low Carbon Development (Amendment) Bill. One of my concerns relates to the budget for climate action. How will we replace the €3.5 billion we raise every year in fuel taxes? I think motor tax brings in approximately €1 billion per annum, giving a total of €4.5 billion. If we give incentives to people to switch from fossil fuel to electric vehicles, how will we bridge the gap?

Succession rights and capital gains tax were also raised. These issues are very pertinent to farming, especially family farms. The idea that a son or daughter inheriting the family farm is inheriting an asset that will generate huge income is long gone. Given the income from farming, the son or daughter may be taking on a liability rather than an asset at times. We can see the number of young people getting involved in farming is reducing year on year, not just in Ireland but across the European Union. For this reason, I have serious concerns about capital gains changes for farming and small business in rural towns and villages where people are passing down a business they are making a living from, and nothing more. They are not storing up a large amount of savings.

It is interesting to note the comment by one of the speakers that increasing the amount of corporation tax does not necessarily mean you will get, pro rata, the same return from that. By increasing tax, you may end up with less money because the money is not available to be taxed because it is in some other haven where it will not be taxed. That is important.

Returning to what Deputy Durkan said about pensions, people entering a private pension scheme have an expectation about what will happen over the life of their pension, what they will be able to do with it and what benefits they will be able to draw from it. When changes are subsequently made to the tax treatment of a scheme, it breaches the expectations of the pension holder who may have entered the private pension scheme in his or her 30s. The idea of deferred tax is good but when people are trying to create a retirement fund with which to support their families, we should not introduce draconian measures halfway or three quarters of the way through. We cannot have a person finding out that the rules of engagement have changed within six months of his or her retirement. People may act differently if they know what the rules will be at the end.

After all the contributions that have been made, I am concerned by the fact we are talking about the latest information we have when some of it goes back to 2014, 2015 or 2016. We are effectively giving out more than €15 billion in tax expenditure and we should have an annual report on it. We must get to the stage where each year, as part of the budget process, we see the returns or costs for tax expenditure and in which section these occurred. If there is a review every ten years, there can be many changes and such changes happen in our modern world over ten years. Going back to 2014, which is seven years ago, it was a different economy and a different world. Are we getting in more money or what were the costs last year compared with 2014? It is a major concern I have in reporting. It is a budgetary oversight committee and the key is that in the year following the financial year, there should be a report on the tax expenditure and the costs to the State. We must get to that stage. It may not happen overnight but we must be able to do that, especially when we see the major figures for costs. Perhaps much of this tax expenditure is investment in our future or succession rights for businesses, for example.