Paddy McHugh (Galway East, Independent)

For many years tax incentive schemes have been favourite soundbite material for politicians. When the interest of the press wanes the interest of the politicians also wanes. That superficial interest ensured that the schemes continued. Some were good and some were inequitable and wasted public moneys without any scrutiny.

I welcomed, therefore, Deputy Cowen's decision on becoming Minister for Finance to set up a complete review of the schemes. The report of that review has been published giving a clear picture for the first time ever on one hand of the benefits, and on the other of the shameful waste of public finances. It is important in the discussion on this topic to realise that we cannot throw them all into the one barrow and make a global decision on them.

There are property-based incentive schemes and tax reliefs such as exemptions for artists and stallion and greyhound stud fees. Many of the property-based schemes have worked well and rejuvenated certain derelict areas. In my constituency, Galway East, investment has occurred solely because these schemes were in place. It would not have been financially viable for a developer to carry out these schemes without the bonus offered by the tax incentive.

We now hear calls for all those schemes to be subject to a cost-benefit analysis. This approach is too simplistic. For example, if all the schemes were subject to a cost-benefit analysis constituencies such as Galway East would not benefit from them. Successive Governments have neglected Galway East. The absence of a critical mass of people would ensure that the results of any cost-benefit analysis would be negative.

The logical conclusion is that the balanced regional development of which Government and Opposition parties often speak but on which they rarely act would never become a reality. In this case projects in the west must receive positive discrimination because cost-benefit analyses would confine us to the third tier for a longer period.

Some scandalous behaviour has occurred, however, under other tax exemption schemes, such as people setting themselves up with €100 million pension funds and zero tax liability because there were no effective limits placed on stashing away cash. This is an abuse of the tax paying public. Elements of our tax system are supporting some fat cats who abuse the system for their own advantage. This abuse should be stopped immediately.

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