Brian Cowen (Laois-Offaly, Fianna Fail)

Before the sos, we had a discussion on this amendment similar to that on Committee Stage. All I can say is that the manner in which Deputies characterise the work of the commission, which met for the first time this morning, is very unfortunate. Members are entitled to their views on any individual or what they regard as the orientation or composition of the commission, but attacking its professional integrity is not a very constructive means of suggesting how it should go about its work. The commission will do its work according to its terms of reference in a way that will exhibit a genuine effort on its part to come forward with ideas on the equitable distribution of the tax burden between income, labour and possible environmental issues, and on the financing of local authorities in this context.

These issues have been dodged consistently in some respects by consecutive Governments because of the political sensitivities involved, but they clearly must be addressed in some way in order to have a sustainable public finance system. In this regard, one must also bear in mind the challenges posed by demographic change, globalisation and climate change. Such major international trends and phenomena will have an impact on our ability to generate resources and the purpose to which we put them. It is a matter of achieving a sustainable level of expenditure in the context of increasing costs in some social policy areas, as a result of the ageing of the population, for example. The issues involved are considerable and I suggest that the terms of reference the commission has been given are quite comprehensive. They are not as specific as Deputy Burton outlines in her amendment but by the same token they are not omitting or excluding particular areas either. It is best to give full discretion to the commission to look at the present state of the taxation code and to come forward with recommendations in any area of policy, recognising that the terms of reference are quite wide, expansive and comprehensive and are in line with what is set out in the programme for Government. This is probably the best way of ensuring that the terms of reference are consistent with the political commitment regarding the setting up of the commission in the first place.

Following the announcement on the establishment of the commission, which is now beginning its work, reference has been made to the high standing in which the chairman is held. I would suggest, that being the case, the chairman is quite capable of ensuring that the direction of the commission's work will be such as to instil rather than undermine confidence by us in the outcome of its work; indeed, we could look forward to the quality of its work being quite high as a result of his chairmanship. We can agree there is at least one person in whom we have some confidence, although I would suggest that all of the persons who have been appointed have an expertise in this area and an ability to make a positive contribution.

We have engaged in tax reform, as has been stated, without the existence of a commission on taxation in the past quarter of a century. I heard recently an interview by the former chairperson of that body who suggested perhaps that much of the work might have been ignored. It had some quite radical proposals at the time. Certainly, it is true that it was not transplanted word for word into the taxation code because all of these recommendations, ideas and studies by eminent and reputable people require to be posited in the political circumstances of the day. At the end of the day it is we in this House who are accountable to the people and support or modify their judgments as we see fit, and they recognise that such is the case as well. We must apply our own political realism to many of these issues.

In that context, in more than a decade we have seen a move towards a greater simplification of our system and codification of our tax code — the Taxes Consolidation Act 1997 is an important piece of legislation. We have seen a continuing effort to reduce taxes on labour and, indeed, on capital in an effort to spur economic activity to deal with the historic problems of underemployment and mass emigration, which have bedevilled and characterised the Irish economy in the past. Such problems, thankfully, are no longer the reality but are ones about which we cannot be complacent in the future while at the same time we may operate from a position of strength. Having joined a common currency system and had the benefit of being part of the euro area, that ability to withstand external turbulence, as we have seen since the autumn, in financial and equity markets has been a clear demonstration of the correctness of the decision in the late 1990s to pursue our full participation in and membership of the euro currency area.

Needless to say, since the debate on Committee Stage I have not changed my mind substantively from when I stated that introducing the type of specific terms of reference such as the Deputy has proposed would only serve to restrict the work of the commission and place it under unnecessary constraints. If we were to make the terms of reference so specific that they would remove discretion, why have a commission in the first place?

As I have indicated previously, the members of the commission are drawn not only from the social partners but the accounting and other sectors, and also include accomplished people with environmental and economic expertise and those with wide experience in central and local government. The wide range of skills and knowledge of the members of the commission will help to ensure that we get a report that can help shape future policy in a positive manner. Therefore, I do not accept the amendment.

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