Seán Fleming (Laois-Offaly, Fianna Fail)

I welcome the opportunity to contribute to the debate on the Bill. This is the first Finance Bill introduced by my constituency colleague, the Minister for Finance, Deputy Cowen. I wish him every success and hope the Bill has a smooth passage through the House in the coming weeks and is enacted as soon as possible. I have no doubt the Minister's many years' experience in the House will be demonstrated through the passage of the Bill. He has a mature broad view of all things related to the people and the economy. While it is his first time as Minister for Finance, he has ample experience that will see him through his first Finance Bill and continue a great record in that Department in the years ahead.

The purpose of the Finance Bill is to put into legislation the benefits announced in the budget. Deputy Ring says a great spin was put on it and people seem to have forgotten about it now. He said there was nothing in it for the ordinary people. That is good guff from a Deputy from north Mayo and I would not expect anything else from him. I would be disappointed if he made a reasonable statement on a budget such as this. He seems to forget that €682 million is the benefit of the taxation package alone for taxpayers during the course of a full year. That is in addition to the nominal amount of €874 million provided in the social welfare increases which go to those relying on the full range of social welfare payments. Approximately, €1.5 billion is being given to those at work or not during the course of a full year. I cannot think of a budget increase where one could give out more but, perhaps, that is a sign of the times. The more one gets, the more people will shout for more. Be that as it may, the figures will stand the test of time.

As Chairman of the Select Committee on Finance and the Public Service, I look forward to a detailed consideration of the Bill on Committee Stage in due course. Some of the increases that form part of the Finance Bill include the employee-PAYE tax credit which has increased by €230 to €1,270 per annum — that is a significant increase and has long been called for — and the personal tax credit which has increased by €60 for a single person and €120 for a married couple to €1,580 for a single person and €3,160 for a married couple in a full year.

The minimum wage has been removed completely from the tax net for the first time in the history of the State. Perhaps I should not speak about the history of the State when dealing with such an innovation as the minimum age. Prior to the previous general election, the Government introduced the minimum wage which was the highest in Europe. This is an issue we are pleased about and are happy to have introduced. That current rate of €7 per hour is exempt from tax. During the course of the year, the minimum wage will increase by approximately 10% to €7.65 per hour. I have no doubt that if people get increases in their wages, as a result, the Minister will deal with that in his budget later in the year.

The standard rate band increased by approximately 5% to €29,400 for a single person, €38,400 for a married one income family, €58,800 for a married two income family and €33,400 for lone parent, widow or parent. Deputy Ring ignored the increases for widowed parents. The exemption limits for those aged 65 and over increased to €16,500 for a single person and €33,000 for a married couple. The €33,000 per annum can be made up of their pensions and any other income at that age of their lives and still be fully exempt from income tax. This is very good.

The number of people in the workforce stands at more than 1.8 million. One third or considerably more than 600,000 are not liable for income tax and are outside the income tax net. Approximately 600,000 pay tax at the standard rate of 20% and fewer than 600,000 pay tax at the rate of 42%. Two thirds of the workforce either pay no tax on their income or pay tax at the standard minimum rate. This is a tremendous achievement. I am confident we can do better. I hope that in future budgets the Government will continue to increase the ratio by taking more people out of the tax net and out of the top tax rate. People working hard for their incomes are entitled to take home their pay and not have the Government of the day dipping into their pockets and taking 50% of their income in tax as was the case when previous parties were in Government. This is a contribution to overall improvements in society such as an increase in the numbers in the workforce and the growth in the economy.

I am pleased that the Bill allows for an increase in the tax relief for third level fees. The limit for which tax relief can be claimed is being increased from €3,175 to €5,000 per annum for the 2005-06 academic year. Next September and October, all Members will hear from people about the difficulties and costs of sending children to third level education. It is good to note that there will be a tax relief of €5,000 per annum for parents sending their children to third level institutions.

The Bill contains 140 sections but I wish to comment on a few. Section 9 is a very caring amendment to the Finance Bill and the stock of legislation. It exempts from income tax payments made by the Health Service Executive to foster parents in respect of care for foster children. Up to now, people who received money from a health board were in the situation that this income was subject to the income tax regime. The section states that where a family acts as foster parents to a child for a certain duration, that payment will now be exempt from income tax and this is as it should be. Foster parenting should be encouraged as there is a great need for it. Section 9 provides for certain other exemptions to former foster children who continue to reside with their foster parents, and this provision is to be welcomed.

Chapter 3 will have a positive effect for all PAYE taxpayers who will now be enabled to use the Revenue on-line system which up to now has been generally available to self-employed people and businesses to return income, corporation and VAT returns. Taxpayers will be able to access the service on the Internet from their own homes and amend personal details. They will be allowed reallocate tax credits between employments and between spouses and make payments and claims for repayment. Balancing statements and information will be provided on-line. A 24 hours a day, seven days a week automatic electronic telephone system will be available to help PAYE workers. This may not be as far-fetched as it sounds. People are accustomed to using mobile phones to access banking information.

Section 9 will also allow Revenue to make automatic repayments to PAYE taxpayers where it is satisfied that based on the information available to it, tax has been overpaid. This issue has been a bone of contention. Most PAYE taxpayers rely on their employer to calculate the tax due and are issued with their P60 at the end of the year. Tax relief on mortgage payments and health care insurance is now taken at source and PAYE taxpayers are even less inclined to seek a balancing statement at the end of the tax year. All these changes make a significant improvement.

Section 26 will provide changes for tax relief for certain expenditure on significant buildings and gardens. Fine houses and gardens are to be found in every county and constituency. Formerly the owners of these houses and gardens were allowed claim tax relief on expenditure properly incurred on the upkeep of these fine houses and which they may not have been able to do without the benefit of tax relief. It was always a condition that these properties would be open to the public for a certain number of days in the year. There have been cases where the tax reliefs were granted but the properties were not open to the public for inspection. Section 26 will insist that the owners and proprietors of these houses, buildings and gardens advertise the dates and hours of opening and the Revenue will carry out spot checks to ensure compliance. It is unfortunate that the owners did not act in good faith but this provision will tighten up the regulation.

I am very pleased that section 118 provides for a significant exemption for first-time buyers of second-hand properties up to the value of €317,500. This is higher than the price of the average house in Portlaoise or any of the towns in my constituency. Those who can afford to pay up to €800,000 for a house in my constituency should not be exempted from income tax because they cannot be poor if they can afford a house at that price. I am aware the pricing and market structure is different in the larger cities. However, I was horrified to hear Deputy Broughan and the Labour Party knock this new incentive and say it is not half enough. The party complained that this helped bring down prices by €20,000 and now the Deputy complains that the builders are raising the prices. Is it ever possible to satisfy a person with such a train of thought?

I have a particular interest in section 115. Will the Minister consider my point and reply at the conclusion of this debate or on Committee Stage? I seek further information on the provision to give legal effect to the budget day announcement to introduce stamp duty relief for the exchange of farmland between two farmers for the purpose of consolidating each farmer's holding. If two farmers in an area want to consolidate their farms by swapping 30 acres for 35 acres, rather than both individuals paying full stamp duty on the acreage they acquire, stamp duty will be payable on the net transfer, which in this case is five acres. This is an excellent development.

A full, detailed list of regulations on qualifying for this relief is specified in the legislation. A valid consolidation certificate is required from Teagasc and must be lodged with the Revenue Commissioners. Each farmer will have to spend at least 50% of his or her normal working hours engaged in farming and must continue in farming for five years. In addition, if either party opts out of farming, the relief will be forfeited. While these requirements amount to red tape, they are not unreasonable.

I have one important question on the issue, however. This topic was raised in the context of land compulsorily acquired for motorways during pre-budget discussions between the Minister and members of the IFA in my constituency. Farmers pay 20% tax on land compulsorily acquired under CPO for motorway purposes. Their complaint is that they will have to pay 9% stamp duty if they buy replacement land. They ask whether, in the case of a farmer who forfeits 50 or 60 acres and does a land swap with a farmer on the other side of the motorway whose land has been severed, relief will be given on the stamp duty payable.

Perhaps I am wrong but my understanding of the Budget Statement is that the provision giving relief on land exchanges between farmers would help farmers whose land was being compulsorily acquired for a motorway and who needed to rejig their financial holdings because the motorway had interfered with various farms along its route. The Bill, however, does not refer to such circumstances. I fear the legislation, as framed, specifically precludes such circumstances because it refers to an exchange of land between two farmers. A CPO, by definition, will involve the State, through a local authority, compulsorily acquiring land. A person may be free to resell the land to a neighbouring farmer and vice versa but it would not be a direct transaction between two farmers because the NRA or local authority would come between them. Based on the current wording, I fear the exemption will not apply to land being acquired for road purposes under the CPO method. I ask for clarification and seek an extension of the exemption to include transactions resulting from CPOs.

Other cases will arise involving land that is genuinely consolidated between farmers. I ask that provision be made for circumstances in which land is consolidated as a result of CPOs. Now that the Minister has accepted the principle involved, I hope he will go further.

Section 158 deals with microbreweries. I welcome the measure to give relief to these companies by way of payment of half the alcohol product tax paid on beer brewed by breweries which produce 20,000 hectolitres or less per annum. Due to changing circumstances in the farming sector, some farmers in my constituency are interested in examining the possibility of entering this sector and have requested the introduction of tax incentives. This is a worthwhile and welcome minor tax incentive specific to a particular area.

I am particularly happy with section 120, which provides for an exemption from stamp duty for second or subsequent charge cards. There has been considerable legitimate criticism in recent years of the fact that one is liable for stamp duty each time one changes one's credit or charge card during the year. This acted as a disincentive to shopping around and changing banks. It is good the Minister is introducing a change with regard to credit and charge cards with effect from 2 April 2005. As soon as the Bill is passed and signed into law by the President, the provision will take effect.

I note the changes regarding ATM, laser and combined cards will only take effect from 1 January 2006. Will the Minister explain the reason different dates apply? Perhaps there are technical reasons related to the financial institutions but I request an explanation of the specific reason.

I wholeheartedly support section 134. To put it in a nutshell, people had their names published if the total liability for tax, interest and penalties arising from a settlement with the Revenue Commissioners exceeded €12,700, or £10,000 in the old days. The Bill increases the threshold to €30,000. People should not get excited about this provision because the threshold above which one had to go to have one's name published was much higher when the legislation was first introduced. In practice, due to the diligent job being done by the Revenue, it is possible somebody could be caught——

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