Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

We had a long debate on this issue on Committee Stage and I thank Deputies Michael McGrath and Pearse Doherty for acknowledging that we had a very good Committee Stage debate in which matters were discussed very thoroughly. I thank the Deputies who participated because one needs two sides to get a good debate going. It was a very interesting and helpful debate. However, there is a tendency in such debates for the Opposition to always concentrate on the individual, which is fair enough, but the individual can only be aided in terms of tax breaks and social welfare benefits at the expense of the generality of taxpayers. It is my job to look at this generality. Deputy Michael McGrath has pointed out, rightly, that the full year yield of this measure is €40 million. We are phasing it out, but as the benefit is not being taxed until mid-year, the real effect will be felt in a full year. If we do not reduce the imposition, that €40 million will fall on to be met by other taxpayers - the poorest of the poor, as well the richest of the rich. The taxes paid by way of VAT and excise duties by people who do not even have an income tax liability go into the pool of taxes from which the funding for measures such as this come. It is not enough to argue all the time about the individual benefit, fly the flag for motherhood and say this is a dreadful imposition. One must look at what is happening across the board also. It would be great if we were living in the virtuous society to which Deputy Peter Mathews aspires where we could make our decisions without any acknowledgement of the fiscal consequences, but the hard facts are that one person's relief is another person's tax. We must always approach these issues to see whether we can achieve the best balance.

During the good years when the barns were being filled with wheat, as they were before the plagues in Egypt, many very generous measures were brought forward and at the time they were justified. We all supported them and they were a good idea, but there are some we can no longer afford. We are in a position where hard choices must be made. We see the Minister for Social Protection having to reduce the respite care grant for carers, at a total cost of €26 million. Not taxing what is an additional benefit for women on maternity leave adds up to €40 million. These are the choices that we are faced with and we must make the choice.

The Opposition would be right if there was not already much support provided in the tax system for pregnant women and children. Generous entitlements to paid maternity leave were increased to 26 weeks on 1 March 2007. Additional entitlements to unpaid maternity leave are also available, increased to 16 weeks from 1 March 2007. We are all familiar with child benefit payments and family income supplement is available to families on low pay. The one parent family payment is available, while the one parent family tax credit of €1,650 is payable to any single person with a child under 18 or over 18 years who is in full-time education or permanently incapacitated. Our benefits compare quite well to those available in many European countries. The duration of maternity leave is 26 weeks, or one half of the year. In Belgium, it is 15 weeks; in Denmark, 18 weeks; in France, 16 weeks; in Germany, 14 weeks; in Italy, 20 weeks; in the Netherlands, 16 weeks; and in Spain, 16 weeks. Compared to most other countries, about an additional ten weeks maternity leave is given in Ireland.

Deputies are all aware of how the payment works. The minimum payment is €217.80, while the maximum payment is €262 per week, but 90% of recipients receive €262 per week. For example, a schoolteacher on maternity leave has the same take-home pay in or out of work because her salary is deducted by €262 and replaced by €262 in maternity benefit. An anomaly arises in the sense that when she was in receipt of the €262 in her salary, it was taxed, but when she receives it in maternity benefit, it is not. We are removing that anomaly because persons in these circumstances have higher take-home pay than they would otherwise.

Deputy Michael McGrath is right in that there are other cases in which one can show losses. It is complicated because for some the losses are made up by having a tax credit; therefore, if someone is out of work for one half of the year, in many cases, they will not have used up their tax credits which will balances the maternity benefit payment.

Overall, there is a saving to the Exchequer in a full year of €40 million, but it is a question of choices. It is not free in the sense that the figure of €40 million comes from other taxpayers and if I do not get it in this case, I will have to get from somewhere else. Deputy Richard Boyd Barrett would have no problem in finding it. He will tell me to tax the rich. I have been searching for the small group of extraordinarily rich people who would pay all of our bills without making any imposition on anybody else if only we could find and tax them. We have been looking for two years and not found them.

On the balance of judgment, this is a fair scheme and measure.

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