Éamon Ó Cuív (Galway West, Fianna Fail)

Deputy Arthur Morgan obviously has not read the plan. He obviously did not read the sections that deal with tax relief and pension contributions. In fact, there is a radical change in the way tax relief will be available on pension schemes. It will ensure that rich people will not be able to shelter large sums of money in pension relief. I quote a sentence from the plan: "Pension tax expenditures will be kept under constant review to ensure that abuse of tax sheltering does not take place." That is right. I have always believed that pension funds should not be a place where the very rich can hide their money and avoid taxation.

We are also reducing the annual earnings cap for personal contributions by almost 25%, to €115,000 per year, and introducing a lifetime cap on pension contributions. This is very significant and important because it will make those who can pay do so, including those with very large incomes that they could put into a tax shelter.

Some parties make great play of increasing the top rate of tax. One might get another 4% or 5% there but one might not. If the top rate is too low one raises no money and if it is too high it might be a disincentive, which would not be in the long-term interest of the development of the economy. It is much more advantageous to get rid of tax breaks. Tax breaks to be finished in the budget include those for patent royalties; investment in machinery and plant for exploration; approved share options and; benefits in kind. We are totally closing down many tax shelters. Increased revenue in those cases will be 41%. We have also made it clear that we will be charging PRSI and the health levy on pension contributions. The plan is radical in tackling the issue of those at the top paying a fair and equitable amount of tax, particularly those whose incomes are so large that they could avail of various tax shelters and tax avoidance measures that have been there in the past. That is an important part of the plan.

When one goes through departmental Estimates, as every Deputy does in some committee of the House, one often finds it is not so easy to make saving. I am always fascinated when I debate the Estimates for my Department in a select committee. Deputy O'Dowd and I have done so often. I cannot remember Deputy O'Dowd ever pointing out where I could save €10 million or €15 million in the Department of Community, Rural and Gaeltacht Affairs. Most of the time he was telling me that expenditure was not half enough and that I should be spending more on the various schemes.

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