Róisín Shortall (Dublin North West, Labour)

There should be a fully refundable system in place so that even if a person does not pay tax, he or she gets the benefit of additional initiatives in budgets. Too many people were precluded from changes and benefits in recent budgets. We need to change that and introduce a very targeted instrument to improve the situation of working poor families, in particular, which are finding it very difficult to survive. That call is echoed by the Irish Congress of Trade Unions. In its pre-budget submission. It appealed to the Government to move towards a fully refundable tax credit system.

I refer to tax relief on pensions. At present there is a rich man, poor man approach in that the more one earns, the more benefit one gets from the State. That is not an equitable system by anybody's reckoning. As it stands, one can claim tax relief on pension contributions up to €250,000. There is no justification for that. Those who are wealthy and who can afford it are welcome to put away as much as they like for their pensions, that is their business, but the State should not subsidise those pension contributions. The level of relief available to people at the top rate annually equates to more than twice the State old age pension. That is indefensible and should not be allowed to continue. There should be a reasonable cap on the level of relief. The Irish Congress of Trade Unions again raised this issue. It talked about a cap of approximately €130,000 in terms of contributions. That is pitched at just about the right level.

I refer to the approach to the taxation of rental income which came up recently at the Committee of Public Accounts when the Revenue Commissioners appeared before it. The Comptroller and Auditor General described Revenue's approach to taxing rental income as haphazard and ineffective. They are fairly damning words to use. That area needs to be seriously tightened up and a serious approach to pursuing the many people who have a nice income from rental property which is not tracked and taxed needs to be taken.

I referred to three areas which I regret are not tackled in this year's Finance Bill and I will pursue them with the Minister.

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