John Curran (Dublin Mid West, Fianna Fail)

This Bill gives legislative effect to many of the provisions of the 2005 budget. As Deputy O'Connor said, it was by and large perceived as a good budget across a wide section of the community. The delivery of its provisions did not simply happen overnight. In the run-up to the budget, all Members of this House were lobbied and influenced, and representations were made to them on a range of issues. Many of those more important issues that we debated in recent months are reflected in that budget. I want to focus on a number of these, in some of which I have a particular interest.

An area in which I am interested, which I was delighted was included in the budget, and to which this Bill gives statutory effect is the removal of stamp duty for first-time buyers of second-hand houses. Many people do not realise the significance of that measure. It is estimated to result in a saving of €11,000 or €12,000 on a second-hand house costing around €300,000. The cost of this measure to the Exchequer in a full year is estimated to be in the region of €60 million. This measure provides a significant saving for the people concerned and, on the social side, it is also beneficial. It allows first-time buyers and young families to move into areas where there are older houses and that creates a good social mix. There are many estates in my constituency where people have been born and reared and the next generation want to live in those areas but have found it more financially attractive to buy a new house. This measure has the beneficial effect of allowing people to buy second-hand houses in their own areas where they have grown up with their extended families. That is one of the knock-on effects of this measure and from that point of view it is to be welcomed.

The Minister said last night that this Bill is one of the major Bills introduced every year. It allows the House to express its views on economic, fiscal, tax and expenditure policies. It also allows tax proposals to be teased out and for Deputies, in a democratic way, to set out for voters what policies they wish to pursue. The Minister is all for such a debate and that is important. I am not here to be critical but to participate in the debate. I contest that one of the major issues about which our parliamentary party has spoken on an ongoing basis is housing. A first and significant move in this regard has been made with the reduction in stamp duty and the removal of it for first-time buyers of second-hand houses.

We need to go a little further than that and focus on where we can go to provide for the future, in respect of which I wish to suggest one possibility. It is the desire of the majority of people to own their own houses. As a public representative, housing is an issue we discuss with constituents on a regular basis. There are a range of ways in which people can participate in owning their own home. Whether one is seeking to secure a straightforward mortgage or to buy into a shared ownership-affordable housing scheme, one of the issues that arises time and again is that people find it a struggle to get a deposit. They might be in employment where they have a sufficient salary to meet the repayments on a mortgage but they might find it difficult to come up with the deposit. We need to look forward in this respect across all sections of housing provision, whether it be people trying to participate in an affordable housing scheme or trying to secure a standard mortgage.

A suggestion that might be advanced is the introduction of special savings schemes with tax incentives specifically designed and ring-fenced for mortgages. In other words, any tax savings or bonus that would accrue from such savings schemes could be cashed in only against a mortgage. Such schemes would be helpful. Many people who have the earning capacity to make mortgage repayments do not have the savings for a deposit. They are dependent on their families to give them the basic deposit. This is an area that should be addressed.

Another change in the Bill is in the area of income tax. Taking people out of the tax net gives the Opposition a line they like to throw at us, namely, that more taxpayers now pay tax at the top rate. That is not a fair argument. Some 1.9 million people are in employment here, of whom more than a third do not pay tax, but they cannot be excluded. That is a nice line that is thrown out regularly, particularly by the leader of the Labour Party, but it is factually misleading. As a result of the changes in the budget, more than a third of the 1.9 million in employment are now outside the tax net and, in respect of other employees, the tax bands have been widened by €1,400 per annum. In addition to that number having been removed from the tax net, some 50,000 employees no longer pay the higher rate of tax. The changes in income tax provisions in the Bill are welcome.

If we are to maintain low taxes across the board, it is important that everybody pays his or her fair share of tax. Two sections of the Bill are relevant to the Revenue Commissioners. Section 131 grants new powers to the Revenue Commissioners to sample the information, other than medical records, held by life insurance companies in respect of a class or classes of policies and their policyholders. The new powers are modelled on the powers given to the Revenue Commissioners regarding DIRT in the Finance Act 1999 and will enable them to investigate if certain life assurance products are being or have been used to shelter untaxed income. The Revenue Commissioners have expressed a desire for such a power before the Committee of Public Accounts and I welcome its inclusion in the Bill.

Section 133 introduces the offence of facilitating tax and duty evasion, which will be more capable of prosecution than the current offence of aiding and abetting. Revenue Commissioners are frequent visitors to the Committee of Public Accounts and their range of inquiries in recent years have recouped €1.6 billion in tax, penalties and interest for the State. Tens of thousands of people have had to make settlements with the Revenue Commissioners across a range of schemes. In that time, however, the Revenue Commissioners have not managed to bring a single charge of aiding and abetting and it is unbelievable that tens of thousands of people entered these schemes unaided, that ordinary people managed to invest their money in offshore accounts and unusual locations without advice. It is improper that institutions that assisted got away scot free while people paid a heavy price.

We are often told that tax reliefs are costly and have not been properly costed before they are introduced. They are currently under review and many of them are nearing completion. Most are every day tax reliefs such as mortgage interest or medical expenses reliefs and reliefs for business. The special reliefs were introduced deliberately as incentives to encourage economic and social development and some of the urban renewal schemes have made a significant difference in my constituency. In Rowlagh in north Clondalkin a new shopping centre is nearing completion. That project would never have started without those reliefs and the people of the area would have been deprived.

Too often we ask about the costs without asking about the benefits, which are real. In Clondalkin village the site of a hardware shop is being redeveloped and a day centre for senior citizens will form part of that new development. In the past developers were reluctant to put money into some of these sites. Too frequently these tax reliefs have been understated and the benefits to the community ignored. I agree, however, that the remaining schemes should be reviewed.

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