Dan Boyle (Cork South Central, Green Party)

I congratulate the Minister for Finance on introducing his third Finance Bill. This is his third set of budgets and Finance Bills to come before the House, a trilogy. It is something not many of his predecessors achieved and it gives us the opportunity to assess over a three-year period the Minister's medium-term plan and how it has succeeded.

On the positive side the Minister has achieved to a certain extent a degree of redistribution that was quite beyond the ability or willingness of his immediate predecessor. That said, such redistribution was quite modest and has been achieved at a time when the opportunity for wide scale reform could have been taken, but was not. I appreciate the Minister operates under a certain number of constraints, including the fact that he has a coalition partner who apparently believes that a little inequality is no bad thing. However, as we approach the general election it is not what the Government is promising in the recently announced national development plan but rather what it has achieved, particularly in its second term in office, that it will be judged on. On those grounds there are scores of missed opportunities and this Finance Bill in particular highlights the mix and gather approach the Minister has taken to what may be achieved in the course of his brief.

The Minister has closed a number of tax loopholes and that is to be commended. However, it must be asked what the procedure was that allowed these loopholes to be created in the first instance. Why was there not enough consideration at departmental level or why was this House not allowed to debate at committee level and identify these loopholes? One particular loophole he has identified is the exemption for people who have been gifted property residences in which they lived for more than three years. That has been a tax loophole since 1999 and he is closing it off now because he and his Department have discovered there is widespread abuse. There is also an onus on the Minister to say, now that this loophole has been identified, how much it has cost in tax forgone, not just in terms of tax relief, but in its abuse. The loophole was created by people who have exploited it and another, perhaps on a smaller scale, concerns the children of property owning parents renting accommodation in their own homes. This seems to have been exploited at another level. The fact that his Government has introduced tax reliefs, budget after budget, on an unthought and costly basis for the taxpayer is again something on which it will be judged.

The second area is of particular interest to the Green Party and something to which the Minister devoted a great deal of attention in his budget speech. Some three pages of the 30-page speech were devoted to environmental matters. He did not say much in those three pages. The end result is that of the €300 he promised to put aside, €270 million will leave the country because we must pay Kyoto Protocol credits. However, we now know that the Minister vastly underestimated the figure. The EPA will soon announce figures showing that our carbon emission levels are actually rising. The Minister based his figure of €270 million on the premise that the cost of carbon credits and the amount needed would be much lower than is now the case. Deputy Burton was of the view that the amount would double, but given the Minister's budget speech and his failure to take action in the Finance Bill, he is likely to make an underestimate that will make that in respect of the Residential Institutions Redress Board seem like a hiccup. We could be talking about sums that reach €1 billion or €1.5 billion, owing to the measures the Government has chosen not to put in place and its decision to underestimate the scale of the problem.

I see little or no reference in the Bill to environmental measures. The Minister states some measures need the approval of the European Union. Some of his much vaunted measures have taken 18 months to arrive, having been announced in previous budget speeches and Finance Bills. At a time when the EPA informs us that the position on carbon will get far worse, the Minister and the Department have chosen to say nothing. The three pages on environmental policy in a 30 page speech count for nothing in terms of the Government's credibility.

What is so special about the horse breeding industry? Why has the Minister decided that this industry, above all others, should be paying little or no tax? It effectively pays no tax. The measures introduced in this Finance Bill mean that there can be a carry-over from the current arrangement into the new one which will be put in place in August 2008. The expenses incurred in running a stud farm can be counted twice, both to assess profit and against the tax liability. The Minister is creating a capital allowance for the purchase of stallions that can be written off over a four-year period. This invites comparisons with the old "Scrap Saturday" sketch of the cow that was transported back and forth over the Border. I can see a future satire involving Sinbad the super stallion who will be sold every four years to different studs, with the amounts written off. This is just like the loophole in risk equalisation which the Minister for Health and Children failed to spot. If the Bill provides loopholes that allow measures to be changed after four years, such loopholes will be exploited. The Minister has to explain why he has created this one.

The Minister might be surprised to find that the Green Party supports business expansion schemes. The net result of increasing indigenous industries is badly needed. The difficulty we have with the Minister's proposed changes is that we have not properly assessed the effects of the current scheme. The recent study which only affected 35% of those availing of BES schemes does not give us enough information to make decisions. The Minister needs to be forthcoming, be it through the Revenue Commissioners or the Department, in releasing more detailed information on the people applying to participate in BES schemes. We can then make a proper assessment of their real worth, which must be to increase the number of businesses and jobs in Irish indigenous businesses.

The measures supposed to encourage environmental initiatives are almost insulting. The Minister mentioned one category — recycling. As it is not specified in the Bill, I suspect it will be open to abuse and that waste management companies will avail of the measure, rather than recycling companies.

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