Michael Moynihan (Cork North West, Fianna Fail)

I welcome the opportunity to contribute on the Bill. I congratulate the Minister on his first budget and Finance Bill and wish him well. He is probably one of the first Ministers of Finance to introduce a budget on which there was no vote on budget day.

The Bill provides for a number of changes to enact the budget of 1 December last and it must be enacted by the Oireachtas before 1 April. The main provisions of the Bill are to reduce income tax and stamp duty, to remove those on the minimum wage from the tax net and to extend the powers of the Revenue Commissioners to deal with major cases and crack down on certain tax avoidance schemes.

The removal of all those on the minimum wage from the tax net has been long sought by all and is welcome. The Bill also confirms the cut in stamp duty for first-time buyers of second-hand houses. While any incentive taken by Government to reduce stamp duty or other excise duty for first-time buyers seems to increase the price of houses, it is a welcome initiative. The Bill also seeks to upgrade the tax administration to the benefit of all taxpayers, especially those in the PAYE sector, which will help to deal more quickly with tax payments and repayments. It also gives effect to the tax reliefs and reductions announced in the budget.

A particular focus has been on the new powers of the Revenue Commissioners to pursue major tax evaders, including the addition of the offence of aiding and abetting to the list of revenue offences to assist the Revenue Commissioners take proceedings against those who actively assist others in tax avoidance. The Bill will also implement a number of recommendations of the revenue powers group that reported last year.

Some Members raised issues in regard to tax relief. There has been much media and other speculation on tax reliefs of one form or another which has led to a belief in some quarters that any schemes to help generate growth through the provision of tax incentives are wrong. However, for many years tax relief and incentive schemes generated growth throughout the country and were welcome.

The town renewal scheme was introduced in 1999 and enacted in 2000. Many people noted there was limited take-up of the scheme in the approximately 100 towns included. However, sections of any town included received investment because of the tax reliefs available. As other speakers noted, this would not have happened unless the scheme was in place. The knock-on effect was that the towns that received the relief benefited from it, none more so than my town of Kanturk. Properties which were designated benefited, which leads to other issues. To condemn all tax reliefs and call for all loopholes to be closed off is not the way to proceed.

In recent years we have witnessed a welcome explosion of growth throughout the country. Some towns and villages that heretofore did not witness growth now face inadequacies in infrastructural services as a result of the explosion in housing which is taking place. This will require further State investment. As a buoyant and growing economy is welcome, it is great that services are required throughout the country.

Major changes have taken place, particularly in rural Ireland. As I come from a predominantly rural constituency, I have witnessed major changes taking place in rural Ireland over the past eight or nine years, which is welcome. Too often over the past 40 or 50 years, emigration ruled rural Ireland. Perhaps one or two members of a family remained in the local community while the others had to either emigrate or travel elsewhere. This has been the pattern for almost 100 years. Given that for the first time in many generations we are able to provide full-time employment for people in their local communities or within Ireland, there are issues in regard to planning and other services which must be tackled.

In 1995-96, small rural schools were closing and the number of teachers was reduced. However, the numbers in schools have been increasing in the past two or three years. Areas are not just depending on the native population. The country has now become more multicultural and multi-denominational, which is welcome. We must ensure that services are provided throughout the country, not just in the large cities.

In recent years, there has been a great reduction in the amount of tax paid. Tax has been reduced from 28% to 20%, yet we are told that more tax is being taken. However, people are paying less tax individually. One of the greatest incentives introduced by the Government over recent years, particularly since 1997, was a reduction in corporation tax. We were berated for reducing this tax from 36% to 12.5%. This measure has continued to generate economic activity by enticing entrepreneurs to come here to set up business, thus ensuring jobs for our young people. This means they do not have to emigrate as was the case in the past.

Decentralisation was announced in budget 2003. The first phase of the decentralisation programme was announced in Phil Flynn's report in the fall of the year and we are awaiting the announcement of the second phase. For far too long State and Government bodies have been paying excessive rent for properties in Dublin and other large centres. The country can be run as efficiently from provincial towns as from large urban areas. Some commentators said at the time that Government should remain in the capital city and that if Departments were dispersed throughout the country, we would not have a cohesive form of government. If Departments are dispersed throughout the country, when policies are being drawn up, particularly at departmental level, and being brought to Cabinet and to this House, people living in rural communities and small towns throughout the country would have a greater impact on the decision-making process. It would ensure a more balanced nationwide view of legislation or regulations introduced.

For far too long people throughout the country, particularly people who live great distances from Dublin, have said that the rules and regulations have been enacted by Dublin people for Dublin people. The decentralisation programme will go a long way towards redressing the imbalance in this regard. I hope the Government will ensure that the full decentralisation programme is rolled out as soon as possible.

Much has been achieved over the past seven or eight years but there is still a long way to go. Issues such as child care, social housing and special educational needs are still outstanding in achieving an inclusive society. Despite some adverse comments recently, we have gone a long way towards achieving an inclusive society.

I am pleased to have had an opportunity to contribute to the debate on the Finance Bill and I commend the Bill to the House.

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