Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)

There is a credible argument for the premise that the adjustment of band limits and credits should be index-linked. The inflationary effect on the take-home pay of ordinary families and workers was not adequately taken into account in the past when budgetary changes were made in times of high inflation. I appreciate that inflation rates are low at present, but there is a need to protect the interests of workers in times of high inflation. Critical aspects of taxation, such as tax bands, exemption limits and tax credits, which are mentioned in amendment No. 3, should provide a basic level of protection.

Index-linking is critically important because it allows for a real evaluation of the changes, effects and impacts of the Minister's proposals. There is a huge fudge at present because they are not index-linked. There needs to be an assessment of the real value, if there is value, or inadequacy of the proposals. They may be inadequate if the proposed changes do not keep pace with the rate of inflation, which has been the case in the past. There is a need for protection. This sane proposition merits support and I hope the Minister will respond more favourably to it than he did on Committee Stage.

The Minister announced in his Budget Statement that he would initiate a review of tax incentives, reliefs and exemptions, particularly property-based tax breaks. Would it not be appropriate at this stage to commence a comprehensive review of the entire tax code? Several amendments have made the case for such a review. If the Minister does not agree with the basic premise of amendments Nos. 3 and 10, he might agree nonetheless that such a review would offer an opportunity to conduct a proper evaluation of the impact of the tax code in all cases. A comprehensive review is absolutely essential.

ICTU, for example, made a very serious charge against our tax system in its report of last October. The report states the system is fundamentally unjust, biased against those on low and middle incomes and does not raise enough tax overall to pay for modern public services. I regard the proposition on indexing as a key and important element in an overall review, to which I hope the Minister will commit in the course of this Bill's passage through this House. It is imperative that he does not park his interest in respect of the heretofore unknown social and economic effects and benefits that might accrue to the economy from the property-based tax reliefs. The ministerial review is not enough although it will certainly help us to come to an informed opinion as to their value.

I understand that neither the Department of Finance nor the Office of the Revenue Commissioners is able to tell us exactly the cost the reliefs in question represent to the Exchequer. It is a major failing on the part of the system to make provision for particular tax breaks without their even having been costed in terms of their real financial impact or effect in terms of social and economic measurements.

If it is the Minister's intent to oppose these amendments, I hope he will use Report Stage of this Bill to indicate his intention to set in train a full and comprehensive review that will take on board the very salient arguments the Opposition Deputies have presented this afternoon and on Committee Stage regarding index linking. The latter represents an important measure and improvement, most especially in the interest of the least well off and the least remunerated in our society.

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