Brian Lenihan Jnr (Dublin West, Fianna Fail)

I do not propose to accept this amendment. Deputies will be aware that the issue of cost-benefit analyses of tax expenditures was considered by the Commission on Taxation but it was of the opinion that tax expenditures should be the subject of ongoing evaluation and appropriate and timely cost-benefit analyses to ensure they are both economically efficient and that parliamentary oversight can be well informed. They will not be surprised that I am entirely in agreement with the commission's guidance.

However, for me to make a report as suggested, both my officials and those of the Revenue Commissioners would require that the necessary data be available and this in turn would require the appropriate tax returns. I agree with the commission that such a requirement would add complexity and volume to the standard tax return forms and increase compliance costs for taxpayers. I also agree that the ongoing monitoring and evaluation required to ensure that tax expenditures remain fit for the purpose for which they are designed and continue to be economically efficient are highly desirable. It could be argued that it is reasonable and proportionate that people who are availing of tax expenditures should supply the appropriate information to the Revenue Commissioners. However, Deputies will understand that given the current economic situation I do not believe this is an appropriate time to introduce additional complexity and cost for hard-pressed taxpayers.

As I noted in my Second Stage contribution on the Bill, I intend to ask each of my colleagues in Government to assess the effectiveness of tax expenditures in their respective sectors with particular reference to those the Commission on Taxation recommend should be removed from the tax code. My Department will review the outcome of the sectoral analysis and it is my intention to report to Cabinet on progress by the end of June 2010. This new approach will place the onus for objectively justifying retention of any expenditure on the sector benefiting from the relief. My Department will then be in a position to present the Cabinet with an analysis from which to make well-informed decisions about the future of tax expenditures in good time for budget 2011.

A wide range of matters was introduced under this heading in Deputy Burton's amendment. I am not sure I want to deal with all of them but Professor Krugman's suggestion that Ireland has gone broke has proven wide of the mark in the period since he wrote his article. He was either misinformed or else he made a false prognosis about our prospects and he was wrong in that regard.

That was the fundamental thesis of his article, to which the Deputy referred. He indicated during the course of last year that Ireland had gone broke. Ireland has not gone broke; far from it. As a result of decisive action by the Government, in the teeth of opposition from the Deputy's party, we do not find ourselves in the same position as the Greek republic because we took timely action when action had to be taken.

The Deputy's economic analysis consistently and persistently misinterprets and misrepresents the issues facing the people. Unfortunately, the excesses in which we were engaged related not only to the banking sector, but to the whole structure of public expenditure and to the fact that we had the highest unit labour costs and welfare rates throughout the eurozone. All these matters weighed heavily on our performance, along with a poorly regulated banking sector and I quite accept the burden of some of the Deputy's criticisms in that regard. However, I do not accept for one minute the suggestion made and Professor Krugman is highly misinformed if he believes there was collusion of any shape in these matters between myself or my party and the various interests to which the Deputy refers. It is my practice to act in the public interest and that is what I have always done as Minister for Finance as a member of the Government.

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