Joan Burton (Dublin West, Labour)

While the thrust of these energy efficiency measures is welcome, will the Minister spell out in detail what they mean? Measures to improve house insulation or to encourage the micro-generation of energy could have brought benefit to a much greater number of ordinary people but they are absent from the Bill. There is no scheme to cater for people who insulate their homes, particularly those who live in older houses. What will the latter get back from the Government? If they buy pellet-burning stoves, they will benefit but from where will they obtain the fuel for such stoves? People insulating their homes would do a great deal more to reduce the country's carbon footprint.

Another supposed green initiative in the Bill is the proposed mechanism to allow carbon credits to be traded as securitised assets on Irish financial markets. I am concerned that this initiative is not so much about the green of the environment as it is about the greed of speculators. There is a very real risk that this mechanism will not bring about any reduction in Irish carbon emissions and that the only people who will gain will be polluters and speculators. Various individuals in the markets have referred to this as a welcome addition to the securitisation legislation. Those to whom I refer have written about this measure in stockbroking columns, but not one word has been written about its environmental impact. The Minister failed to refer to it earlier.

If carbon credits become a securitised asset — in effect guaranteeing investors an income from carbon emissions long into the future — it may not be in the interests of the polluter to stop polluting or in those of the investor to see emissions reduced. Such a misalignment of interests would be tragic for Ireland's efforts to reduce carbon emissions. I am surprised the Green Party felt comfortable signing off on this matter.

If it is to proceed, this mechanism will have to be carefully monitored to ensure that it does not become another playground for speculators. In the context of volatile global financial markets, to which wrongly priced securitised assets have most certainly contributed, and the difficulties faced by the EU carbon trading scheme, one must wonder whether this is the most effective way of achieving reductions in Irish carbon emissions. When it comes to global warming, markets may be part of the solution. However, we must be vigilant to ensure they do not become part of the problem.

In the debate on the relevant Finance Act two years ago, the Minister promised to introduce a very modest stamp duty on contracts for difference, CFDs. The latter are, as he is now aware, a mechanism for gambling on the Stock Exchange. When approached by brokers at the time and in the face of contrary advice he received from the Revenue Commissioners in respect of the introduction of this modest reform, the Minister sided with the investment industry. In the intervening two years, CFDs became one of the reasons that the Stock Exchange has borne more of a resemblance to a casino or a bingo hall than to an institution designed to assist Irish industry. When the governor of the Central Bank and Financial Services Authority of Ireland refers to poor sentiment towards the Stock Exchange, the Minister must consider what he failed to do and how he backtracked when approached by the financial houses. I have a feeling that the position relating to the carbon emissions trading scheme is similar.

To implement the EU energy tax directive, the Bill introduces, for the first time, an electricity tax at the minimum possible rate on non-household use of electricity generated from non-environmentally friendly sources. This development, aimed at targeting polluting energy sources and promoting energy efficiency by businesses, is to be welcomed and could eventually go some way towards ensuring that 16% of Irish energy will be generated from renewable sources by 2020.

On a positive note, I welcome measures to support the Irish film industry. With several Oscar nominations in the bag, the talent inherent in the industry is there for all to see and the extension by four years of section 481 relief, combined with an increase of the ceiling per film from €35 million to €50 million, in line with the recent report prepared by Indecon, should provide a timely boost to the industry. Continuing and enhanced State support for the cultural development of the country, not to mention the associated economic benefits, are something the Labour Party has supported since its inception.

For too long, oil and gas companies — often granted exploration licences in dubious circumstances — have been in a position to extract fossil fuels without having to pay anything approaching the same level of taxes or royalties that are commonplace in other developed countries such as Norway. While Norway has been able to use its fossil fuel reserves to fund world-class infrastructure, a competitive welfare state and its pension commitments for decades to come, Ireland has taken a very different path. In effect, we have privatised the profits while socialising the costs of exploration. The Labour Party welcomes the new measures to tax the super-normal profits of exploration companies exploiting our natural resources as a step in the right direction. Why will this enhanced corporation tax will not apply to exploration licences granted before 2007? Why should the measure not apply across the board? Why should it be restricted to licences granted after some arbitrary date?

The Labour Party also welcomes the reduction in the rate of VAT on non-oral contraceptives, from 21% to 13.5%, something for which we have long been campaigning. We would hope to see this rate further reduced to 5% in line with the EU VAT directive. This would reinforce what is an important development in the fight against the spread of sexually transmitted diseases, STDs. I hope the Government also envisages enforcement measures to ensure that these VAT reductions are passed on to consumers. Without such measures, this will merely be another profiteering exercise on the part of vendors.

I have tried to emphasise the positive aspects of the Bill. In previous years we discussed the degree of tax avoidance on the part of very wealthy people. I refer here to millionaires who have large incomes but who pay very little tax. We spoke about the phenomenon of those people who are non-resident for tax purposes but to all intents and purposes live in this country. I have suggested strongly on behalf of the Labour Party that in a real republic, it is for everybody to make a contribution and pay a fair share of taxes.

The Minister for Finance's Bill has nothing to say about cutting back some of the schemes which continue to unfairly benefit people at the top end of income in this country. There are very substantial reliefs for pensions and encouraging people to hold pensions is a proper fiscal policy. However, the Minister has failed to reform the pension code and structure it to ensure those in lower and middle incomes, those most in need of setting aside money for pensions, get the lion's share of the benefit.

The benefits for pensions continue to go to people such as proprietary directors and others with very large incomes who can afford corresponding investments in pension. There are also people nearing retirement age who own their own company and can have that company pay very significant sums of money — €500,000 and upwards — into pension funds that attract the very highest levels of tax relief at 41%.

Now the heat of the election is over, the Minister has plenty of time to consider how to retune the tax system so as to incentivise for everybody activities such as pension provisions that are considered not only worthwhile but absolutely essential. It is very disappointing the Minister has failed to do this.

He also failed to take into account that of the 2 million people at work in this economy, a significant number pay no tax because their income is so low. These people are either in part-time employment or on the minimum wage. Many of these could even get some money back if there was a refundable tax credit system, which would help their position. The Minister is instead still relying on a very inadequate process of payments through family income supplement, which is not taken up by large numbers of people on low income.

The Minister is still hiding behind veils or a green curtain with regard to the commission on taxation. I put forward this Labour Party proposal every year for the past five years and I am glad the Minister accepted it and included it in the programme for Government. We should hear what the Minister intends to include in this and whether he intends to make the hard and difficult decisions in the harsher economic circumstances that lie ahead.

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