Paudge Connolly (Cavan-Monaghan, Independent)

This Finance Bill adopts a softly, softly and somewhat tentative approach in the clear and certain knowledge that the electorate will be the final arbiters on the Government's stewardship in a relatively short space of time. The decision to abolish the favourable remittance basis of income tax was long overdue. Under this system, foreign managers and nationals were only required to pay tax on that portion of income they used to live on in Ireland, and it was open to widespread abuse.

In recent years, Ireland acquired the reputation for being a tax haven for technology multinationals and Irish operations have been used to manage and repatriate funds. In recent months, some threatening noises have been made about far-reaching consequences for Ireland if US companies pulled out as a result of this measure. I welcome the decision to face down the multinational lobby which sought to reverse the measure to end the remittance tax system. It goes without saying that a minimum contribution to Irish society would be due from those who avail of and benefit from our country.

The measures to encourage low earners to put a portion of their SSIA savings into pensions will be welcomed by many people. It is of no interest to those poor people who cannot afford it. It will also be a major disappointment for those who took out SSIAs but were unable to maintain payments. Had they known this additional benefit would come down the line, they would possibly have held on to their SSIAs or made a greater effort to do so. Nevertheless, this measure appears somewhat restricted and very limited in scope to improve the position of low-income pensioners. There are many borderline cases between the standard rate of income tax and the 42% rate, many of whom would welcome the opportunity to have €2,500 put towards their €7,500 SSIAs.

We saw the alarming figure announced by the Central Statistics Office that almost 50% of the population has no form of pension cover. This is a frightening statistic, particularly with an ageing population and the implications for workers in years to come. The CSO also noted that half of those with SSIAs had never saved before the scheme was introduced four years ago, so it would be logical for these funds to be directed towards pensions and would give them a major boost. Those targeted should specifically be those on lower incomes with inadequate pension provision. The SSIA pension investment measure could be made infinitely more attractive for those on lower incomes if the Minister were to match the SSIA investments on a euro per euro basis. We are talking of the lowest income earners and those with no pension provisions.

One sector which needs a boost is business tourism, which involves conferences and major corporate meetings. Many of our hotels have expanded in recent years to include top class conference facilities, yet the Irish hotel VAT rate of 13.5% is the second highest in Europe, second only to that of Germany which has a rate of perhaps 16%. Colleagues in Northern Ireland get tax rebates on any VAT paid in excess of 10% and we should consider that to make ourselves more competitive. Ireland needs to be in a competitive position to avail of the €40 billion world conference market and we should set our sights on that.

The Finance Bill further tightens the noose around tax evasion and avoidance and it is to be hoped it will contribute towards everyone paying a fair share of tax. That is what it should be about. However, the flip side should involve securing value for taxpayers' money as a prerequisite of Government expenditure. For example, in the renting or leasing of properties for the various Departments throughout the country, the judicious expenditure of taxpayers' money should be paramount. Several Departments and the Health Service Executive have quite a number of properties leased and lying idle. Questions should be asked about whether we are getting value for taxpayers' money. We must ask if it logical to spend money leasing property and have nothing at the end of the year or at the end of ten or 20 years. This would not work in terms of a private property business.

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