Bertie Ahern (Dublin Central, Fianna Fail)

I do not want to get into a debate on last week's figures, but if the Deputy looks at the figures, which his question was about, concerning the performance of taxes he will see that income tax is up 5% compared to the same period last year and is directly related to employment, showing the real health of the Irish economy and reflecting how the most important part of economic activity, which is employment, is remaining strong in a period where there is a sharp international downturn mainly because of sub-prime lending and the fact that oil is at over $100 per barrel.

I do not want to get into a debate about the figures but, if we are talking about unemployment being at 5%, when we had marches 20 years ago, lest the Deputy forget, it was because we had managed and were lucky to keep unemployment at just under 20%. Our labour market 15 years ago when I was chairperson of the Cabinet committee on employment included 1.25 million people working. Today, we have 2.25 million people working, a substantial part of which has been an increase in recent years.

Overall, if one looks at tax receipts on income, we were €600 million or 5% behind target in the first three months of the year. Over half of the shortfall is due to the poor performance of capital gains tax, which reflects the more adverse conditions in equity and property markets. That is the analysis of those in Revenue and the Department of Finance who have looked at this issue. It is largely driven by the necessary housing market correction, which is well under way. It is a source of satisfaction to me that, for the first time since 1999, the Central Bank is saying that house prices are at sustainable levels. In no way should we feel anything other than satisfaction in that regard. If the Central Bank can say for the first time in nine years that house prices have reached a sustainable level, it supports the recent actions the Government was forced to take.

Yes, it is a fact that taxes are down in the area of development lands and that developers are not developing as much. The only ironic thing about this is that, while I have spent my entire period as Taoiseach defending the fact that it is a good thing for the economy that developers and development land were moving ahead and striving, now that it has come down for the first time, it is seen as a criticism. I am glad to see that the view articulated on this side of the House — that a construction industry, development, capital gains tax and capital-related taxes are good for the economy — is shared for the first time in the period in which I have been Taoiseach by everyone else in the House.

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