Seán Fleming (Laois-Offaly, Fianna Fail)

I hope the party continues with this nonsense because the people will see through it. If they threaten such an increase when in opposition, I would hate to see what the party would do if it got its hands on the levers of power. Fine Gael would probably ration petrol and diesel as well as doubling its price. Thank God there is a little common sense on this side of the House.

As chairman of the environment committee, I look forward to the passage of the legislation in the coming weeks. It will be before us on Committee Stage next week. The legislation is a major step forward in the war to reduce carbon emissions. In the first week of December 2006, my constituency colleague, the Minister for Finance, announced in the House that he would examine motor taxation, carbon taxes and carbon emissions. During 2007 substantial consultations took place and progress was made in this regard. Changes were announced in the budget, which are being provided for in legislation before the House this week and next week.

There are two aspects to the changes being introduced as part of the overall move to tax carbon emissions. The changes in VRT, which one pays when one purchases a car, are being dealt with on Committee Stage of the Finance Bill, which is before the select committee now. This legislation deals with annual motor tax. Two parallel Bills are going through the House as part of the root and branch approach to carbon emissions and the introduction of a carbon tax.

People give out about changes in tax regimes, but governments have always used taxation as a major method of influencing change in society. There is more to taxation than increasing VAT or other taxes by a few cent. In years to come, legislation will be introduced as this form of taxation evolves and this Bill is the first major step. I refer to tax reliefs and changes in the taxation system that have led to changes in society as we embark on a new road with a new tax, which will have a major impact when people look back in 2050.

Mortgage interest relief is a strong feature of the tax code and it has resulted in Ireland having one of the highest home ownership rates in the world. Export sales relief and the Shannon free zone were tax incentives introduced to encourage companies to export from particular locations. Urban renewal schemes have been of great benefit to help breathe new life into many towns and cities. The Irish Financial Services Centre is in place because of changes to the tax regime. Many hotels have been built throughout the State as a result of the tax relief on hotels. When I entered Leinster House first, we had two hotels in County Laois but now we have seven or eight. They were developed and opened and they have been fully functioning for the past five years because of changes to the tax regime.

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