Pat Rabbitte (Dublin South West, Labour)

Many incentives are completely overcooked, have outlasted their productivity and are unwise. The big ones, such as pension relief and property-based incentives are finally beginning to be dealt with. The ones we are talking about here, however, are largely Mickey Mouse measures. The savings are not worth talking about.

I understand why people outside this House call for leadership, authority and good example. We are in no position to contest that call. It is a reasonable and deserving proposition, but there is also a fair amount of begrudgery around. Why begrudge parents who happen to work for a good employer who has gone out of his or her way to provide child care in a fashion that qualifies for this exemption from benefit-in-kind tax? Why do we want to shut them down? Do we presume they will continue to provide child care if they do not get the tax exemption? For the sake of €6 million in a full year, I do not see the point of it.

I wish the Commission on Taxation had gone down through each of its proposals and said that each should be implemented. It did not do so. The commission pointed up certain things and gave background and information regarding individual tax breaks, shelters and incentives, but it was not prescriptive with regard to priorities.

I take Deputy Ardagh's point on tax avoidance. I agree with bringing the transfer of share awards into the PAYE system and making them subject to tax at PAYE rates. I remember when tax relief for the purchase of new shares in an employing company was introduced. The Minister for Finance, Deputy Bertie Ahern, said this was a great idea designed to encourage industrial peace and good industrial relations in that type of company. The entire yield from this measure in a full year is €300,000. It is not long since we were following Mrs. Thatcher's property owning democracy. Now, everything has to go. I do not see the point.

I refer to Deputy Ardagh's point about the notional income of the trade union movement. As I understand, the trade unions are regulated by the Registrar of Friendly Societies, if that is still the case. The trade unions have to produce audited accounts. However, given the hole we have been landed in, I cannot make an argument to resist the change that is proposed here. It raises some meaningful income as distinct from something like the new shares purchasing scheme which raises damn all. People may point to the banks as a good reason for not having such a scheme but that is a different problem.

Deputy Gilmore highlighted the rent relief, which will hit a lot of low-paid people very hard. We are going in one direction with housing policy. We use tax as an instrument of social policy and then we change direction and go in the opposite direction. It is a little like the earlier discussion where Deputy Ardagh highlighted the unreasonableness, for example, of the write-down of section 23 reliefs against the section 23 property only. Not unreasonably, he pointed to examples in his own constituency where the new owner would not be able to pay the interest on the mortgage in return for the amount of rent he or she might get. That is very probably true but the question it raises is whether this is good housing policy.

It seems to me that like this proposal, they were all designed to drive the output of private housing and to transfer our social housing need into private housing and create and expand the need for housing supplement, which is hugely uneconomic and which has produced an entire category of person who is trapped in that apartment because if she goes to work, she loses her housing rental supplement. There are significant implications, policy-wise and it is now proposed that we reverse engines.

Deputy Ó Snodaigh is right in that it is also my experience in my constituency that at the lower end the rents have changed damn all although they have changed at the higher end. It is now proposed to end on a phased basis the rent relief to match the mortgage interest relief for young people who find themselves housed in these circumstances. They ended up there because they could not get a mortgage at the time, the price of housing was inordinate at many times their salary.

We have moved from one extreme to the other and we are all searching around for where savings can be made to contribute to something like the ball-park figure that is required. I am not so sure it is good leadership from this House to induce good employers who have gone out of their way to provide child care to either shut it down or to charge for it, or make whatever new arrangement they wish to put in place, no more than it is good industrial relations to kill off the share scheme which was probably minimally subscribed in this country. There are young workers in that €97 million the Minister hopes to save in a full year who are on the rent relief on that type of housing. When the sums are being done in The Irish Times tomorrow morning, this should be factored in because it will be a significant factor for many young people who have started work, such as young nurses and teachers.

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