Bertie Ahern (Dublin Central, Fianna Fail)

The Government examined the position that pertained over the past 20 years. The last review of shelters and tax allowances was undertaken in 1992, which did not cover all the schemes. We have gone back to Goodbody, Indecon, the Department of Finance and the Revenue Commissioners, and have examined all the schemes and have comprehensively reported on them. The results of those reviews were available for this year's budget in which the Minister for Finance announced the termination of ten property relief schemes. As Deputy Rabbitte said, transitional arrangements will apply until July 2008. That was done on the advice of the consultant not to overheat the construction sector in the current year. The reliefs for stallion and greyhound stud fees will also end on that date, as has already been announced.

In the case of pension funds, since budget day on 7 December 2005, a cap of €5 million has applied to the size of a pension fund, except where a higher value applied on that day. In all cases, no tax-free lump sum greater than €1.25 million can be paid out of a pension fund on and from 7 December 2005. A cap on the use of various tax reliefs by high earners to reduce their annual tax liability was announced by the Minister. That legislation is now contained in section 17 of the Finance Bill before the House today. That cap applies to those with incomes of more than €250,000 per annum. It will increase the effective rate of tax on those with high incomes who use the particular reliefs. Some of them over use those reliefs. This was the most detailed review ever undertaken on tax schemes. Specific property schemes have been terminated in other cases in recent years, including the Temple Bar, seaside resort and Customs House docks area schemes. Many other schemes were analysed also.

It is untrue to state that the construction schemes were rolled over. The original scheme was the section 23 one that was effectively available anywhere in the State. That was curbed to apply only for urban renewal areas that were designated by local authorities as areas that developers would not develop. Parts of Cork, Limerick, Dublin and Galway that were most deprived ten or 15 years ago have now been fully developed to include residential communities. That is because we curbed section 23. The economic analysis showed that provision was not required in the good areas of various cities. When the section was curbed it forced money into developing deprived urban areas. That initiative has been highly successful, if sometimes costly, and I am aware of the argument concerning taxes foregone. Nonetheless, it has generated large-scale employment and investment while reducing taxes to create a vibrant economy.

When I referred earlier to bright sparks I was referring in particular to pension schemes. The way in which some people used pension funds was certainly not what was foreseen. That is the point I was making.

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