Brian Lenihan Jnr (Dublin West, Fianna Fail)

I should start with Deputy Burton's amendment, but I want to deal with Deputy Bruton's points first.

It is envisaged that the Commission on Taxation will report at the end of July. As regards this particular amendment, the commission is not under my direction, but is independent. It exists to furnish us with an assessment of how the tax system can be reformed. It is looking at the issue raised by Deputy Barrett on individualisation. It has been requested to provide a report on the results of its examination and to make such recommendations, as it thinks fit, to the Minister.

As regards the publication of individual documents, reports and submissions made to the commission or internal papers or records emanating from its work, these are matters entirely for the commission at this stage. However, I believe there is merit in the point made by Deputy Bruton and in the spirit of the point made by Deputy Burton, that the widest possible information about the tax options is essential in advance of the budget to be submitted this year. For that reason I am prepared to examine what documents can be published on receipt of the report. Naturally, I shall have to discuss this with the chairman of the commission, and I cannot give a commitment at this stage, but I am disposed to publish the maximum possible amount of information on the work of the commission because I believe it will help informed debate about the options and choices that face us. Indeed, before the supplementary budget in April, Deputies Bruton, Burton and Morgan were given the opportunity of being briefed in detail by the Department of Finance about the options that were available. By convention, the content of those briefings and what passes between Deputies and the officials is not passed to me. I am not fully aware of what actually passed between the Deputies and my officials at that stage. To some extent I am aware, however, because the Deputies have told me.

While I did not seek to compel the Deputies to support the budget, I believed that providing more information on the available options was helpful for a more informed debate about the budget. For that reason I believe it is important that the maximum amount of information is furnished about the Commission on Taxation. However, I must emphasise as regards this amendment that my hands are tied in the sense that I cannot at this stage, nor should I, direct that the commission produce papers since it is an independent body. At the conclusion of its deliberations I will examine that issue, and I am disposed to the maximum possible disclosure.

The McCarthy group is referred to in Deputy Burton's amendment and Deputy Bruton has mentioned this, too. Again, no decision on publication has been taken yet in that regard. Fundamental decisions have to be made on expenditure, and again my disposition is to publish the maximum amount possible. However, the McCarthy commission is operating as part of the Department, so it is in a different position from that of the Commission on Taxation. It is not an independent body in that sense, but more in the nature of a collaborative exercise between my Department and those who have externally agreed to assist. There is no question, however, of my sub-contracting out my responsibility to prepare the Estimates. I just believed it was of value to my Department to have external assistance in assessing expenditure. Again, I will consider that, but neither the Government nor I has made a decision at this stage in that regard.

A wide range of issues was canvassed apart from that and I am not sure how much benefit can be derived from going back over them because I have spoken to the amendment. Clearly, it is important on the tax side that the various options under consideration are looked at very carefully. The ESRI is not allied to the Government. In fact, in its constitution and authority it has always been an independent source of economic and social advice and research. It does consultancy work, but is not a body which, on a full-time basis, advises private bodies. Unlike many analysts it is not working for a private firm and is not committed in that sense. It is of value to the State, however, to have an independent organisation looking at economic and social research. I find the ESRI's findings very valuable and informative, but it is not allied to the Government.

I am not sure how Deputy Burton might characterise the relationship between the Central Bank and the Government, but certainly the Government has given no consideration to any possible rate of property tax or any suggestion in principle in that regard to the effect that one should be introduced this year - or indeed to any suggestion that it should be fixed at the rate she mentioned. That has not come before the Government at this stage. We will examine what the tax commission has to report in that regard.

As regards the marginal rates, we may have an opportunity to speak to this when we talk about the levies. However, it is important to note, of course, that looking at marginal tax rates can be somewhat misleading. It is the effective rate of tax that matters. If we take one individual earning €36,400 and another earning €36,401, one has a marginal rate of 30% while the other has a marginal rate of 51%. However, they both have the same average tax rate of 19.2% and I can give many other examples. That, again, is known to Deputies, but it is a point worth making in the context of marginal rates.

In a broader sense I agree with Deputy Burton, and I made it clear in the budget speech that the limits for the extension of income tax have been reached. I welcome the fact that Deputy Burton, this morning, acknowledged that an adjustment is needed in the economy. The question, of course, is how this adjustment can be made in a fair way. I believe there are limits to the way in which taxation can be imposed or extended to meet that burden, and that inevitably means we have to focus on our expenditures.

I do not believe I was toasted by Europe regarding the four budgetary adjustments I had to implement in the last year. The European authorities' response was not a toast to me, but rather the Irish people, who have carried this heavy burden of adjustment and shown their capacity to adapt and be resilient. In fact, our unit labour costs this year will have improved 7% as against the rest of the eurozone countries. That is an enormous increase in competitiveness and it is a tribute to the adaptability of the Irish workforce. We know how educated and how adaptable it is. It is difficult for public servants to pay the pension levy, but that was introduced to fund what is a substantial State liability. Persons who wish to make these pension arrangements who are not public servants have to spend considerable sums of money doing it. All these facts should be taken into account in looking at our contemporary economic position.

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