Brian Lenihan Jnr (Dublin West, Fianna Fail)

-----because we are in an arrangement whereby our funding comes from the European Central Bank and any progress in this area will have to be made in co-operation with it. It will not be possible to take unilateral measures in this respect and any party which in the course of the campaign promises unilateral default measures is misleading and deceiving the people.

Deputy Noonan raised the question of Spanish banks. The Spanish Government announced that its banks will have to raise more capital. This is the same as what is happening here under the EU support programme.

Deputies raised the issue of the universal social charge. I will consider the issue Deputy Noonan raised on the threshold but it is necessary to have an exemption threshold at the lower end of the charge to avoid very low levels of income attaching to a tax liability. I am pleased that the Deputy Noonan has welcomed my proposed Committee Stage amendments. He has, however, questioned the surcharge on self-employed income being applied at income levels of €100,000 rather than at income levels of €200,000 where the gain first appears. I must inform the Deputy that the gain only occurs at €200,000 and above but first shows itself as a diminishing loss on earnings from €100,000. If the surcharge were placed at income levels of €200,000, those above that level would still gain from the budget. I can provide the Deputy with a table that demonstrates this effect.

Deputy Noel Ahern queried why the 3% surcharge would apply only to self-employed income earners. This is because an unintended effect of introducing the social charge was that self-employed income earners above certain high levels of income actually made a gain from the original budget measures. The surcharge rectifies the position. Deputy Burton stated the highest income earners actually benefited as a result of the budget. This is simply not the case. All PAYE workers regardless of their income levels are worse off after the budget. It gives me no joy to state this but it is the factual position.

With regard to Deputy Burton's confusion over the nature of the universal social charge, let me make clear that the charge is a tax. All revenue goes to the central fund and is then used to fund services and other expenditure. It is certainly correct that the revenue from the health levy went directly to fund health services but this accounted for only 13% of what the HSE required in 2010.

With regard to the changes to self assessment, I refer to the points made by Deputies, in particular Deputy O'Donnell. It is true that implementation of the proposals would reduce the over-concentration of tax receipts in late October and mid-November and thus enhance the accuracy of next-year budget forecasting. It would also help facilitate an earlier budget and lengthen the period available for the development of policy and legislation for the Finance Bill. As many Deputies, including Deputies Roche and O'Connor have noted, the Finance Bill is one of the key pieces of legislation which goes through the Oireachtas and needs an appropriate level of commitment from all parties. However, bringing forward the pay and file deadline to 30 September would have a huge negative impact this year on small businesses and the self employed. Deputy Lowry advised me the harsh treatment of the self-employed is unfair. Likewise, Deputy Healy-Rae made a strong case in this regard. This measure would also have serious consequences for farmers because the single farm payment will not have been paid by 30 September, leaving farmers with no financial resources to make this payment prior to the deadline. In all these circumstances I am prepared not to proceed with the proposal to bring forward the pay and file deadline to 30 September. It was a worthy proposal and would have improved our budgetary process. It would have removed the criticism that we are constrained to introduce a budget in early December but one must weigh up this against the real difficulties which the self-employed and farmers face in the Irish economy and this is not the year for such a fundamental reform. Hence, I will not proceed with this particular element of the Finance Bill. It was not part of the original budgetary measures and therefore I am free to not proceed with the matter and I do not propose to do so.

It is appalling and unacceptable that the proposed taxation measures on bankers' bonuses were not dealt with because of the time restrictions placed on the passage of the Bill by the Labour Party and Fine Gael. I noted what Deputy Mattie McGrath stated a few moments ago in this regard that the constraint in the discussion on the Finance Bill to one week rather than two constrained the Department in what we could do. Nevertheless, having discussed the matter with my officials and having regard to what Deputy Mattie McGrath raised with me I will be in a position to bring forward an amendment on bankers' bonuses on Committee Stage. However, I will need all-party co-operation on this amendment because it has not been published with the other Committee Stage amendments. I know it is an issue about which all sides of the House are concerned.

A number of other tax issues were raised in the course of the debate.

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