Paul McGrath (Westmeath, Fine Gael)

I will be speaking for eight minutes and the Acting Chairman might remind me when my time is concluding. I am delighted to have the opportunity to address the House on the Finance Bill. It will be my last opportunity to do so on any Finance Bill and therefore this is my swansong. I hope I will make good use of the eight minutes allocated to me.

I listened with interest to Deputy Dennehy, who stated everything he said was factual. His comments should carry a Government health warning because he said the national debt has been halved. It has not, it has increased over recent years. The remainder of the Deputy's script probably refers to a percentage of GDP or GNP, but he did not read that. He just said the national debt has been halved, which is totally untrue. I am just putting the record straight lest students read the Deputy's remarks and believe they can take them as gospel because they were said in the House.

I am very disappointed that the Minister did not manage to address a great anomaly in our tax code in so far as it impinges upon people's incomes. We have three different thresholds for deciding on people's income. On the basis of one's gross income, one's tax is decided by the Revenue Commissioners and one receives a certificate at the end of the year to state one earned X euro. If one's son or daughter requires a higher education grant from a local authority to go to college, one produces this certificate stating one's income — let us say it is €35,000. The local authority will look at the certificate and ask for one's accounts to confirm one's income.

If one has a number of occupations, perhaps as a taxi driver, farmer or whatever, one may have legitimate write-offs on leasing. The Acting Chairman will know about this from his profession. The local authority may say that because one is spending €7,000 a year on leasing a vehicle, the sometime taxi driver's real income is not the €35,000 the Revenue Commissioners said it was. The lease money must be added because the local authority does not recognise leases for the purposes of higher education grants. Suddenly the income level is €42,000 because the leasing figure has been added. That is to make a mockery of the decision by Revenue as to what is a person's income.

One might present a certificate to the Department of Social and Family Affairs indicating one has an income of, say, €20,000 and four children. In this case one believes one is entitled to family income supplement, FIS, because of the four children and the fact of being below the threshold. The Department of Social and Family Affairs will ask for the certificate of income and the applicant will show the document as produced by Revenue indicating the income last year was €20,000. He or she will be told, in the event, that this evidence is not acceptable because of the applicant being self-employed and the Department will not trust him or her, accordingly. It will not accept that the Revenue has done a good job in assessing the person's income. It will not accept the certificate because the person is self-employed and will not give him or her FIS. On the one hand Revenue decides what a person earns and confirms his or her income, while other arms of Government are saying, in effect, they do not believe the Revenue assessments and will not agree with them. That is absolutely ridiculous. Why did the Minister not put that right? Is it not time some Minister for Finance took on that issue and sorted it out?

I have heard so many Government people talk about our low tax regime and how we pay low personal tax. I concede, of course, that personal tax has gone down and people pay less now than they did before. Last year, however, for the first time in the history of this State, the money collected in VAT exceeded the amount contributed in personal taxation. Is this not dramatic and a major change in the collection of taxes? It means people are paying less in personal taxes but much more in indirect taxation by virtue of VAT and the like. Recently I looked at figures in relation to New Zealand, a country that is comparable to ours. It has approximately the same population and is highly dependent on agriculture, with much the same numbers of people at work. A goods and services tax imposed in New Zealand represents somewhere in the region of 10% of the amount taken in personal taxation. The country with a similar set-up to ours. We collect more in VAT than in personal taxes while New Zealand collects about 10% and we wonder why.

Another point I want to make relates to the individualisation of taxes. Take two couples living side by side in this country with a notional income of €60,000 per household. In one house both partners are working and they earn €60,000. In the other the income is the same but there is only one earner. Is it not dramatic that this Government will impose an additional tax of €120 per week on the household where there is one income? Is it not a disgrace that such an additional tax is imposed on the household with one income? On that sad note I rest my case as regards the Finance Bill 2007. Between now and June I am sure I shall have opportunities to talk about other issues.

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