Willie O'Dea (Limerick City, Fianna Fail)

I would not recognise the Minister for Finance if he engaged in anything other than "a full and frank discussion". I would like to pick up on the question asked by Deputy Michael McGrath. The programme for Government includes a fairly specific commitment that income tax rates will not be interfered with and that income tax bands or credits will not be narrowed or reduced. The indications in the Minister's response to Deputy McGrath seemed to depart from that, however. My reading of his reply is that it did not close off the possibility of such changes.

I would like to speak about this section of the Bill in general. I am aware of the Minister's fiscal difficulties and I understand the financial situation facing the country. The Minister will be aware that there is huge competition between different countries to attract investment in research and development. He will have received submissions from IBEC and other bodies about improvements that could be made to the research and development tax system. The use of 2003 as a base year is apparently having adverse effects on certain businesses. A strong case has been made to me and others - I am sure the Minister has heard about it - to the effect that the outsourcing limit of 5% should be expanded to bring it into line with some of the Government's other industrial and commercial policies. If I recall correctly, the programme for Government contains a commitment to provide that the base year test will not apply to companies that spend up to €100,000 on research and development. In other words, such businesses will be given full credit for that, and amounts slightly over it, at a marginal rate.

While I appreciate that the Minister is dealing with financial difficulties, I suggest these things would more than pay for themselves. The IDA Ireland figures indicate that we have had a fantastic record in attracting such investment over the past four or five years. Is the Minister giving serious consideration to including the provisions I have mentioned in the next budget and the next finance Bill?

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