Joe Costello (Dublin Central, Labour)

At this difficult time of recession, there should be a return in the specific areas of job retention and creation. Such a link should be made.

When I read the Minister's speech, I was disappointed by the section that indicated he intends to undertake research and preparation on property-related tax expenditure, and subsequently publish his findings, before he introduces cutbacks to existing tax reliefs. He said that although the property-related tax expenditure provisions which were announced in the budget are retained in sections 22 and 23 of the Bill, the Government has decided they will be subject to a commencement provision which may only take effect in the next tax year after the preparation and publication of an economic impact assessment on the proposed changes. Anybody in their right mind would expect that all of this would have taken place before these proposals were made on budget day or introduced in the Finance Bill. As it is, the proposals have been made but are on hold until some future stage. The Minister will not be in a position to ensure they are implemented in the future. A new Government will deal with the matter. The Government is reneging on a commitment that was made on budget day by not delivering it in the context of the Finance Bill. It should have known before it made its budget day commitment that the research had not been done. Why is it being done now, post factum? It is another way of removing the proposal, which is not a good enough way of conducting business.

If the amendment being proposed by Deputy Burton had been in place, all of the necessary homework would have been done. We would have seen a cost-benefit analysis of the continuation of any property-related or pension-related tax reliefs. That is how we should be moving forward. There is an example of a good provision in a later section of this Bill. The Minister has proposed to offer tax relief with regard to the energy efficiency of residential premises in the State. This welcome measure will create jobs and stimulate employment. Although we will forgo income tax in that respect, it is obvious that there will be a return to the State from it. It is an example of what this amendment proposes to achieve. Unfortunately, even on a desirable project such as that, there will be tax relief of only €30 million per annum.

We have seen obscene figures for the total value of tax reliefs to the people who benefit from it; some economists say it is in the region of €11 billion annually. I do not know what is the Department of Finance figure but economists said last year in Killarney at the annual IBEC get-together that the amount of tax foregone annually in tax reliefs for various sectors that have benefited outrageously from such policies is €11 billion. It has got totally out of hand.

We need to know the total quantity of tax foregone and we then need to establish a framework to ensure that we have a rationale and basic underlying principles for tax reliefs in the future. Most importantly, any reliefs must be of substantial benefit to the community. In this time of recession, they should be directed towards the area that would be most of benefit, which is job creation and retention.

See this speech in context