Billy Timmins (Wicklow, Fine Gael)

I will start again with my time starting now.

It is important to realise that the Government is lining up to take the hard decisions simply because it has no choice. While it did have choices in the past, it always took the road not less travelled, to paraphrase Robert Frost, and took the easy option. Over the past decade, Fine Gael outlined the many choices that were available and pointed out in a pragmatic and reasonable manner how the Government could have avoided the current situation at which we have arrived. However, the position is as it is and people want Members to move on.

It is projected that Government spending for this year will reach €55 billion, while tax revenue will amount to approximately €35 billion. As borrowing must be under 9.5% of GDP, the Government must find €5 billion through a combination of increased tax revenue and public spending cuts. The best method of increasing tax revenue is to create jobs but regrettably, Ireland losing them. This would be a difficult task for any Minister and I believe the invitation to the Opposition from the Minister for Finance, Deputy Brian Lenihan, is more about saving Fianna Fáil then Ireland. However, there are more important things than Fianna Fáil and Ireland is one of them, and Fine Gael, as always, will put the country first. I fear to think what would have happened had the boot been on the other foot and wonder whether the VAT on hurleys mindset has been banished to a bygone era. Only time will tell.

I have some personal proposals that I would like the Minister to take on board. He should not listen to populist commentators who appear to believe that a change in tax policy is purely about placing a mathematical template on our current spending, earning or investment pattern. Changes in tax policy change human behaviour and I was glad to hear the Taoiseach refer to this point in the House earlier today. The securing of €2.5 billion by the stroke of a pen with regard to pension relief policy is an inaccurate and simplistic view that only assists in causing confusion among the public. Irish people do not like paying taxes but will willingly do so if it is fair and used for the common good in an equitable manner. I believe they are not satisfied that this is happening at present and until such time that Members can demonstrate clearly that it is, there will be widespread dissatisfaction.

I refer the Minister of State to Adam Smith's Wealth of Nations and his four maxims with regard to taxes in general. First, an individual's contribution should, as nearly as possible, be in proportion to his or her respective abilities. Second, the tax ought to be certain and not arbitrary and the time, manner and quantity should be clear. The absence of these criteria in local authority charges certainly causes great difficulty. Third, every tax ought to be levied at the time or in the manner in which it is most likely to be convenient for the contributor to pay it. Finally, every tax ought to be so contrived as both to take out and keep out of the pockets of the people as little as possible over and above what it brings into the public treasury of the State. In other words, one must be conscious of the cost of the collection, its impact on the creation of jobs and wealth and that it does not lead to innovation. I believe these maxims hold true today.

The push for profit, which turned into greed, has caused some of our current difficulties and many contributions in this House have spoken of the necessity to move away from the liberal capitalist model. However, I believe that ultimately, it will be the same push for profit that will get us out of the current crisis. Until such time as wealth and jobs move in a positive direction, we will face unpleasant choices. However, such choices must not dampen creative skills and ambition and we must not confuse these with greed. In the interim, we must get our regulatory house in order. However, if history tells us anything, it is that we never learn from it, as evidenced by the South Sea bubble, as well as the Dutch tulip and Irish money bubbles.

I wish to make some personal proposals, which I now will outline. I will not forward them to the Secretary General of the Department of Finance because it is important that this Department should take on board debates in this House and that Members do not simply speak in a vacuum. First, a change in the law to permit funds from self-administered pension schemes to be invested in their owners' companies could in many cases release much-needed cash for investment. At present, this is not possible as although such funds can be invested in almost anything, they cannot be invested in the owner's company. Any income taken from an approved retirement fund is taxed as income. Many businesses have availed of this scheme in the good times but now are in need of cash flow and cannot get it. This change should be introduced by the Department of Finance as it would assist in releasing money.

With respect to the public services and State agencies, I believe a pilot scheme of a reduced working week of, for example, four days should be offered for voluntary uptake in a couple of specific areas. This could prove beneficial to both the employees and the public finances. It would have to be carefully controlled to establish its impact and I believe this would be a much fairer method with which to cut back the public pay bill than the levy system. People should be given an option as it might suit many people to not work on Fridays.

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