Joan Burton (Dublin West, Labour)

I am sure it did not escape the Minister's notice that the individuals to whom I refer are earning handsome salaries and are doing a very good job spinning matters on his behalf.

The tax code requires a major overhaul in order to yield the additional revenue that will be needed to meet our debts and for investment. For over a decade, the tax code has been infected by the poison of the type of tax shelters which have facilitated the tax planners in ducking and weaving at will in order to evade and avoid paying their fair share. Regardless of the degree to which Ministers pretend that these shelters no longer exist, the truth is that they have left a long legacy which will continue to cost us billions in the years to come. This week, I obtained an admission from officials in the Department of Finance to the effect that the notorious property tax shelters will cost us close to €400 million this year alone. That amount is equal to the total cost of the free fees policy in the area of higher education. However, those who demand an end to this policy are curiously silent about and ignorant of the true cost of the tax breaks that have caused so much damage in the past decade.

Tax planners placed large advertisements on the front page of one of the Sunday newspapers last weekend and the weekend before in which those with spare cash were urged to hurry up and take the last remaining opportunity to use the tax shelters to which I refer in order to minimise their exposure for tax. These advertisements reminded me of the slogan employed by Moore Street traders in the week prior to Christmas and encouraging people to "buy the last of the Cheeky Charlies". Tax experts are exhorting people to avail of the last of the tax breaks while they remain in place. The figure of €400 million to which I refer is not insignificant.

I wish to refer to the absurd tax breaks that exist for very high income earners who have private pensions. Mr. Fingleton is the most famous case in this regard and he has a private pension pot of €27 million. All of this money has been carefully sheltered within structures put in place by the Government. These tax breaks are another cause of vexation on the part of ordinary PAYE workers and, in full, they cost the Exchequer between €1 billion and €2 billion each year. They must be amended in order that the costs to which they give rise can be substantially reduced. They must be focused on low and middle income earners rather than on those who earn high incomes. I am in favour of one measure that has been introduced by the new Conservative-Liberal Democrat Government in the UK, namely, the imposition of a cap on the amount of relief that can be claimed under this heading, regardless of whether it is contributed to taxpayers or by the owners of companies by which proprietary directors are technically employed. I urge the Minister for Finance to follow the lead provided by the UK Chancellor, Mr. George Osborne, MP, in this regard.

We are continually reminded that a high percentage of wage earners at the lower end of the pay scales pay no income tax at all. It may well be that there is scope for reform in this area and that a well-structured universal levy could have a significant role to play in order that savings might be achieved. The Minister previously referred to a universal social contribution, a matter in respect of which the ESRI recently compiled a paper. I would add the proviso that there is no change of securing consent under this heading when there is such rampant evasion and avoidance at the top end. Get that part of the equation right and we can then discuss a thorough application of the principle that everyone must pay a fair share.

It is astonishing to consider how the rampant organised tax avoidance to which I refer remains so embedded in our culture. One need only consider the recent stories relating to NAMA. All of the guys - and they are guys - whose loans were taken over by NAMA are each going to be given €200,000 per year in order that they might continue to live in the style to which they have become accustomed. A sum of €200,000 represents a large salary by most people's standards. The majority of those to whom I refer will not pay any tax on that money because they still have access to a range of tax shelters which they utilised in order to pay little or no tax during the period of the boom. It is all a question of balance. If one wants to cut child benefit, one must clearly show that one intends to act tough on this type of rampant tax avoidance.

In comparison to other eurozone countries, the overall gross tax take here, as a share of national income, is way below what it ought to be. The position in this regard must be changed in a planned and coherent way in the coming years. Many of those to whom I would refer as "deficit hawks", and who inhabit television and radio studios, do not want to acknowledge that this is the reality shown by all of the statistics produced by the OECD and other bodies in respect of Ireland. This reality is the result of the various tax breaks and tax shelters and the way in which our tax system evolved under Charlie McCreevy. Essentially, we should have moderate taxes, the effective tax rate should not be distorted by tax shelters and everyone should contribute. In this way, we could raise our tax revenues to reasonable heights without the necessity to have excessively high marginal rates.

The IMF has a fearsome reputation as an institution that will take whatever action is considers necessary if it is called upon to manage a failed economy. When I worked in a number of different countries in Africa, I witnessed the kind of restructuring the IMF tends to employ. It is not a pretty sight. The IMF's template is very simple: get to a zero-based budget in something of the order of one to three years.

When I visited the Department of Finance, I became depressed as a result of the quietistic mood that appears to obtain among the staff there. When I visit a school, I can nearly gauge, as I walk in the front door, the vibrancy of the children and the levels of hope and expectation that obtain. I did not feel that kind of vibrancy when I visited the Minister's Department. I am sure the officials who work there are the reservoirs of vast levels of knowledge and expertise in respect of public expenditure. However, none of them stated "Joan, we can do this. We can pull matters out of the fire. We know we are going to do it." Far be it from me to state that someone with a salesperson's approach should go into the Department. However, it is obvious that the Government is not inspiring the officials to whom I refer to come forward with serious plans to regenerate this country.

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