Brian Lenihan Jnr (Dublin West, Fianna Fail)

I agree with Deputy Bruton that we may well have to return to this subject. I am not sure, by the way, that if a person fails three times there would be an extraordinary tax liability as the person might have quite an amount of losses to carry forward.

That said, the issue is really the untargeted character of the proposed relief. The distinction between the contract of service and the contract for services is of course fundamental in the whole income tax code in so far as the individual natural person is concerned. This is why the Revenue authorities are far more comfortable administering a relief with a corporate garb, which I can understand. There may be a case for examining whether there is an intermediate category of persons in particular areas. However, it will have to be very carefully ring-fenced because the introduction of this on a generalised basis could be very difficult.

There is the seed capital scheme as well as the back to work allowance, so there are a number of schemes in operation. As Deputies keep reminding me, we have to work out what these reliefs cost as they are expenditures. It is not just a case of "Would you not feel sorry for a fellow, give him a few bob and leave him go". We have learned they are a cost to the Exchequer. I find it extraordinary that we spent so much of our time in committee denouncing what happened in regard to tax reliefs in various directions and we then turn around and look for new sets of tax reliefs. The lesson to be drawn about tax reliefs is that we must measure their value, which is why I have put in place a new procedure with the Government so people must stand over them in the Estimates process. Governments will have to take responsibility for these because they are expenditures.

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