Joan Burton (Dublin West, Labour)

-----or school building projects? I am not a fan of public private partnerships but I recognise that they offer some advantages in securing finance for the capital budget. Why is the use of this mechanism limited this year to four schools in the Taoiseach's constituency? We need more outside-the-box ideas to keep the capital programme ticking over. By this I mean projects that are fully assessed by robust cost-benefit analysis and perhaps sanctioned by the EU for funding outside the headline public deficit constraints. In other words, they would be off balance sheet for EU purposes.

The Labour Party has suggested the establishment of a national development bank that can focus on the many sensible proposals for the smart economy that allegedly form part of the Government's strategy. I am afraid I saw little commitment in today's announcements to making progress on that agenda. Access to broadband and investment in public transport, water supply and low-carbon energy all form part of the agenda, but for these we will need access to capital, which must be sourced in new and imaginative ways. The Labour Party's proposed development bank could be used for this purpose. It would be set up on a commercial semi-state basis. Capital projects it supports would be considered by Brussels to be off balance sheet and thus would not affect the general Government balance, except where the Exchequer transfers funds directly to the bank. The national development bank could support some €3 billion of capital spending over the 2009 to 2011 period. The bank could be capitalised in several tranches over a number of years through the National Pensions Reserve Fund on a once-off basis, through private investment in a recovery bond, through providing the credit union sector with a stable investment vehicle, which it is currently looking for, and through borrowing under Government guidance. I am disappointed that the Minister has shown so little imagination in his statements today.

I said already that the PAYE sector, which is paying more than €1.5 billion in extra income tax and health and PRSI levies, is the main target of this budget. I have talked about tax justice until I was blue in the face. A recent case highlighted how easy it is to set up a perfectly legal tax scheme whereby one can avoid a modest 20% tax on a €25 million profit by simply sending one's spouse to Italy for 183 days. A whole industry has developed among tax accountants and lawyers to facilitate this. In today's statement there was precious little to show any serious intent to end this outrage. All the tax exile rules, all the tax shelter schemes, and all the cosy arrangements to allow tax losses to be brought forward indefinitely and even back for a year should end now.

I do not think the word "pension" even crossed the Minister's lips. We are talking, for example, about the pension pots of €5 million to €20 million accumulated personally by a number of our large bankers and other captains of industry. When they retire they get a quarter of their funds tax-free. That equates to a tax saving of €1 million when they exit the funds. I thought the Minister would seek to cap that. There will be no consent from taxpayers to the €1.5 billion hit to the PAYE sector when they see that the culture of tax avoidance and evasion continues to flourish. Tax justice must be done and must be seen to be done. I told the Minister to write down the words "Tax justice" and put them on his desk, as the former American President Harry Truman did with the words "The buck stops here." There is a fallacy about that the Revenue Commissioners have changed the culture of tax evasion. The former chairman of the Revenue Commissioners, Mr. Daly, and the current chairman have done sterling work, but there is more to be done. The new campaign on offshore trusts shows that there are still mechanisms in place to dodge and weave around the rules.

The Taoiseach will remember Lord Justice Denning's notorious "appalling vista" remark with reference to the Birmingham Six. I will give him an appalling vista with regard to the tax-back schemes that will be implemented shortly. A property company, Company A, has stock consisting of development land and buildings. In view of the crash, it will have major write-downs in the value of this stock. The result will be massive losses for tax purposes. These losses may be carried forward, but they can also be written off against tax already paid currently - that is, in 2007 - which will allow it to claim a refund from the Revenue Commissioners of tax paid recently. There is more. The bank that lent the money to Company A to fund the purchase of land will also write down the value of the loans, and this too will give rise to a claim for tax refunds by the bank. This is a double whammy for the Revenue Commissioners. It will have tax refund claims from both the company and the bank. The losses on these refund claims are likely to be quite astronomical. I have heard suggestions that they could be as much as €1 billion between this year and next year. This is not fancy speculation. As the Taoiseach is aware, the Office of the Revenue Commissioners is bracing itself for major refunds to developers and banks, including the very institutions that have been bailed out by the taxpayer.

If the Taoiseach engaged an accountancy consultant to examine this he would be charged a handsome fee. I am giving him this advice free. I do not think the Government can stand idly by and tolerate this. It would mean a double whammy for the taxpayer. The very banks we are helping are fleecing us with bail-out demands and they will shortly be fleecing us on the double with tax refund demands based on write-downs of their dodgy loans. There will be a sos later. It is open to the Taoiseach and his colleague the Minister for Finance to write further emergency legislation to close this loophole tonight. We will vote for it. This is an offer to the Taoiseach that makes a lot of sense.

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