Arthur Morgan (Louth, Sinn Fein)

——at a time when in excess of 43,000 households remained on social housing waiting lists and young couples across the State struggled and over-borrowed to secure over-priced housing. We also pointed to the adverse effect which these reliefs and exemptions were having on property prices. The Indecon review confirmed that they had led to "an increase in site prices, financial returns to promoters and property prices", yet under this legislation, at a time when house prices continue to escalate unabated, the termination dates for many of these schemes have inexplicably been extended until 2008. That is completely absurd.

My party is also vociferously opposed to tax breaks for developers of private hospitals, sports clinics and now private mental health services. The State should not be subsidising private health care in this way. The revenue lost to the State as a result of these tax breaks should be used to deliver a public health care service.

Tax expenditures are generally regressive because they primarily benefit the better-off — a fact clearly demonstrated by the Indecon report. Therefore, all tax exemptions should be ended, except where the economic and social value outweighs the cost to the Exchequer of the exemption. In such cases the exemption should be at the minimal rate necessary to achieve the goal which it was introduced to achieve. As my colleague, Deputy Ó Caoláin, pointed out in his contribution to this debate this morning, "the lack of social analysis across the range of reliefs is one of the major flaws in the report".

I wish to raise the issue of tax exiles and the Minister's utter failure to introduce legislative change to end the ability of wealthy individuals to declare that they are non-resident for tax purposes. The Department of Finance does not even collate data for the number of persons who claim to be non-resident for tax purposes. My Sinn Féin colleagues previously questioned the Minister on the number of investigations carried out by the Revenue to confirm the veracity of declarations made by those claiming to be non-resident for tax purposes, the number of days spent in the State in a given tax year and the number of cases where it had been found that false declarations had been made. This issue must now be tackled as a matter of priority.

Another issue which I am disappointed has not been dealt with in this legislation is the removal of the employee PRSI ceiling. Its removal is necessary because it is regressive and inequitably benefits higher paid workers. This view has been supported by the Department of Social and Family Affairs which, in 2002, stated:

Abolition of the ceiling would make the employee PRSI system more progressive. The current system is regressive in that those over the ceiling pay a smaller proportion of gross income in PRSI than those earning under the ceiling. Both receive the same benefits. Abolition of the ceiling would therefore strengthen the social solidarity element of the system in that a proportion of all income would be pooled for the benefit of all contributors.

If that Department cannot make the case and change the mind of the Minister, I expect my contribution will have little effect.

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