Brian Lenihan Jnr (Dublin West, Fianna Fail)

Of course I am concerned. I have been concerned for a considerable period about the structural loss in our tax base occasioned by the property bust. The effect of it has been a substantial depletion in the amount the State received in capital gains tax and stamp duty receipts. I agree that has been a very serious problem. Any Government would be concerned about it, naturally. That is why the Commission on Taxation has made proposals for broadening the tax base and ensuring it is less elastic in the future. Clearly, one of the lessons highlighted in the reports is that a tax base which is subject to rapid upward and downward changes in tax receipts, because of the elastic character of certain receipts, is not structurally viable for the future. The Government is examining the proposals in that regard. I will bring proposals to the Cabinet in the context of this year's budget to ensure our tax base is more reliable in the years ahead. I agree that both factors - employment measures and general confidence in the economy - have to be attended to if we are to generate a viable revenue base.

Initiatives of the type mentioned by the Deputy - graduate internships and back to work arrangements, etc. - can be brought into operation now that final agreement has been reached on the Croke Park deal. It is disappointing that it took so long for that to happen. Now that agreement has been arrived at, we have an opportunity to make progress with these issues. Proposals that would generate confidence, in terms of income tax and employment numbers, can be pursued. I place considerable emphasis on the importance of sustaining general confidence in the economy so that individuals spend money and make investment decisions. Fiscal correction is necessary as part of the climate of sustaining confidence. Many people have called for a stimulus package. Our level of borrowing is such that it amounts, in itself, to the only stimulus package - and a substantial one at that - in which the Government can engage, with the exception of supply side stimulus measures that can be considered in specific sectors.

Having agreed with the first two points made by Deputy Burton, I would like to take issue with her third point. I do not have a preference for cutting the public capital programme. We have maintained capital investment at a very high level. Many of the reductions in the total volume of capital expenditure can be justified in terms of the cheaper tendering prices for elements of physical infrastructure that now exist. The question of how EUROSTAT will treat the capital sums that are required in connection with Anglo Irish Bank and Irish Nationwide, with which the Deputy concluded, is a matter for EUROSTAT. Clearly, the Department of Finance will liaise with EUROSTAT on the appropriate treatment of these matters. It is fair to indicate, as the Deputy did in her question, that a precedent that may have to be followed in relation to further payments has been set.

See this speech in context