Éamon Ó Cuív (Galway West, Fianna Fail) | Oireachtas source

I am pleased to have the opportunity to speak on the Bill. I am disappointed to note how few Deputies are around tonight. I received a list of speakers which showed Deputy Fleming, Deputy Calleary, Deputy Eugene Murphy, me, Deputy Michael Moynihan and Deputy Fitzmaurice. There were also meant to be Government and Sinn Féin speakers. However, there are no Government and no Sinn Féin speakers, which is disappointing. In previous times, Government Deputies always used the Second Stage of the Finance Bill as an opportunity to think out loud for themselves about things they found wrong with the system in a non-adversarial way. I have no time for the people who come into the House and just read out scripts prepared by somebody upstairs. I have often thought if that is what we do in this House, we might as well just put them online and be done with it.

The Finance Bill provides an opportunity to look at a number of issues. I first return to a hobbyhorse I have had for many years, which is the system's apparent love for complication. I do not mind if it is a big multinational with a team of accountants and other professionals working all sorts of tricks on one; one has to close them down and make it vastly complicated. I am talking about the ordinary taxpayer who might have a small self-employed income and a PAYE income or be working on a scheme. Not only do I find that they do not understand, but I have found that even with what would appear to be reasonably simple questions even officials in the tax office have to go and check because it is such a mass of rules.

The other day a PAYE question arose. It was an issue relating to the allowance for a widow or widower with a dependent child. The question was quite simple. Is the person allowed to get the individual allowance plus the allowance for being widowed with one child which is kind of tapered off over four or five years? When I rang the tax office, the person did not know and said they would come back. They subsequently came back and said that one could. Interestingly this person had made a return for three or four years and the tax office had not realised that it had overtaxed the person. Of course, the problem is that it is not possible to go back more than four years to correct mistakes even if the mistake is made by the tax office.

In another case somebody did not claim the working allowance one can claim - in other words in different employments there is an allowance. There are myriad different allowances for different employments and the cost of work. I would say half the country does not claim the allowance. If someone suddenly becomes aware of it and points out they never got it over the past seven years, the tax office will inform them that they can only claim it for the past four years. The Revenue can come after a taxpayer, but a taxpayer cannot come after Revenue.

Another person five years ago did not tick the box to claim the €1,650 employee tax credit, formerly known as the PAYE tax credit. Revenue did not spot it even though it was obvious PAYE income because it was filled in the PAYE box in the tax return. That person cannot get the €1,650 now. These issues cause huge alienation.

When I was a Minister I looked in despair at some of the forms my Department had. I often wondered how the hell we got involved in making a complicated form when many questions could have been much simpler. I stayed up one night and rewrote the form. I met the officials the next day because we were having one of these customer-friendly things we were all into - all this love-in and fora to be customer friendly. I told them that the next time they designed a form in any Department, they should go down to the far end of the Department and give that new form to somebody who has never seen the form before but is a full-time civil servant. I have great time for civil servants. I said if they cannot fill it and if they come back and ask what something means or how to answer something, it should not be given to the public who are not half as skilled in the ways of the world.

I absolutely believe if I gave 80% of the population a tax form to fill - they might have PAYE income, a very small amount of self-employed income and all the rest - they would come back with many questions. Should it really be like that?

I am interested in this PAYE modernisation. I can see the attraction from the State's point of view because it will get everything in by the fortnight and should have the details. That will be very handy, but handy for whom? If the information is used to be consumer friendly to the individual taxpayer, it is a great idea.

10 o’clock

One thing that amazes me is that when somebody is issued with a tax form, the authorities already know the PAYE income. They have this information on the P35. That form is to become redundant but the authorities will still know the details. They will actually know by the week. Also known is the social welfare income one has because there is data-matching. I often wonder why the authorities cannot give the individual the relevant information on the form and state that if he or she is happy with it, he or she does not have to supply the information requested.

If, for example, somebody is in receipt of an invalidity pension and perhaps has a private pension, he or she has to write to the Department of Employment Affairs and Social Protection. This process has been made more complicated because 1 January is not the date used for everything. The simple thing is to write to the Department and ask it how much invalidity pension one got for the year. With that pension, there is the rate at the beginning of the year and the rate for the other part of the year, from 17 March. Then one has to calculate the Christmas bonus at 80%, 70% or, as I hope it will be this year, 100%. The tax officials already know the information, however.

The same applies to social welfare. I do not know whether the Minister ever filled out a pension form. This applies right across the board. The data-matching is possible. When filling out a pension form, one is asked about one's history of employment. What we do to get around all this work is write to the Department asking for the contribution record. When we get it, we ask the individual whether it looks right. If it does, we advise the person not to bother filling in all the detail but to copy the contribution record and throw it in with the file. My constituents are absolutely amazed by this because it saves so much hassle. It is time we started thinking of the consumer and making compliance easy.

We should get rid of the small tax reliefs. I have raised this for years. Small tax reliefs are great for aficionados. Unions love them, as do farmers. If, however, the ordinary punter is given a choice between claiming a bit here, there and everywhere and taking a credit of €200 or €300, he or she will take the flat credit and be done with it. If the Minister does not believe me, he should try it.

Years ago there was a scheme that compensated farmers for the loss of sheep. Of course, the IFA said its members' sheep would be worth a lot more than the going rate. Being ever generous, I said that if it could prove to me, with expenses and sales figures, that its members' sheep were making more than the standard price I was giving, I would consider the claims and make the payments. Of the 4,000 farmers, only four came back having bothered to do the accounts. The other 3,996 took the cheque and ran, saying it was awfully handy and that they got their money without hassle or complication.

Consider the circumstances when trying to fill out a medical card application form. This all goes round in a circle because all the officials have access to the relevant information. The medical card application form is the top of the tops. The officials have the information but insist on getting it from the applicant also. How many of us have received requests for P60s and so on when the Department could have got the information required at the press of a button?

The example I love most concerns what happens when the Department of Agriculture, Food and the Marine, on finding out some small farmer in the back end of Connemara has received €500 through a farm grant, looks for full farm accounts to see how much profit he has been making from the five acres of bog. He is told he has to make a tax return and have a tax assessment although he has no tax, USC or PRSI to pay in order to get a medical card. This country is mad.

As I said, much of the time the Department already has the information. If one submits the wrong information, the Department will say it is wrong because it already knows the correct information.

Could we start running the country for the people? A judgment was given in the case of Ó Beoláin. It was related to the Irish language. The late Mr. Justice Hardiman made a very fundamental point. He said the State places a burden on people but that means it should place a burden on itself in helping the people. It was a very interesting principle and one that could simplify life for many people. Not everything in life is about money. How many people passed things up because they are too complicated, and how many do not claim what they are entitled to because doing so is too complicated? So many schemes, tax reliefs and other measures involve significant frustration and complication for the ordinary people.

Everyone wants everything online. There are two problems with that, one being, as we know from the debacle of the past few weeks, that there are many places where there is no Internet available. I use a computer all day every day and do so many things online. I would not say I am stupid about doing things online but find some websites much easier to use than others. In other cases, it is very complicated to figure out what one is meant to do. Many websites are not very user-friendly. Therefore, insisting on online submission means people often have to pay for expensive professional advice to obtain very small sums of money.

It is time we simplified matters for the punter. I read the Bill and see all the lovely corporate stuff, which is fine. That is a different game and it is in a different league. The majority of the people, however, do not live sophisticated, complicated lives.

With regard to form 11, even if one's income is only €15,000 per year there are 48 pages of questions to respond to. The self-assessment part at the back is mind-boggling to those who try to fill it out. I suggest that the Minister go back to the office now, get the form, start filling it out and do the calculations with a view to seeing what goes where. I would have said the old-fashioned tax assessment gave the punter much more information. I do not know why the new system is as it is. It gives the authorities some very magical information but the document is not as useful as the old one, which referred to the income at the top. It then stated one's gross figure and one's personal allowances, including the PAYE allowance, income relief etc. It then had the calculation for the USC and PRSI. It was all on one page. The next page aggregated the whole lot and stated whether one owed money. The new form is much more complicated and gives a lot less information. When the Minister tries to fill out the form when he goes back to the office tonight, he will find out that I am not exaggerating what we are on about.

The budget tinkered at the edges. Unfortunately, with both the social welfare code and budget this year, we have just been playing around at the edges. There is no reform taking place. Reform is needed urgently. Reform is required to simplify taxpayer compliance and so people will understand their taxes.

We introduced the USC at a time of severe recession but it was a bit like Wellington's income tax, which was introduced initially to pay for the Napoleonic wars as a very temporary expedient. It is still with us. I never agreed in principle with the idea of three taxes. It is messy and complicated. When one tries to mesh all the rules, one finds the ordinary person does not really understand how his or her tax is calculated. He or she is entitled to understand that. I favour amalgamation into a two-tax system. The same amount of money would have to be taken in. It would have to be revenue neutral. We cannot live in an El Dorado in which there would be no taxes. We should take in the same amount of money but go back to a two-tax system, involving both income tax and social insurance payments, with the latter allowing the State to make all the social insurance payments in any year and leaving a little for the Social Insurance Fund.

The quicker we abolish the USC the better. With all its crinkles and complications it does not mesh in with the rest of the system.

I wish to make a further comment. Despite all the talk about successful cities, this city and most cities have two main features now. One is the fact that areas of huge deprivation, with by far the highest deprivation in the country, are in urban areas. That is a scientific fact. The second feature is gridlock in the mornings and evenings. If we continue to grow our cities as fast as we are doing and as planned we will never catch up. There are two ways in which we could begin to resolve that issue. One is to please the public servants and do what they overwhelmingly wish, which is to reinstitute a decentralisation programme. All the surveys of applications by people who want to go to Dublin or who want to get out of Dublin, where we can get the data from the Department, show that the majority are trying to get out, not get in. Anybody who says the decentralised Departments do not work as efficiently must prove their thesis because that certainly was not my experience. The Departments of Education and Skills and Employment Affairs and Social Protection that were decentralised work perfectly.

The second way is through our old friend broadband. One way to reduce traffic at peak hours is to provide good broadband for people everywhere so they can do more of their work from home, a practice that is becoming more common internationally. They would not have to face the nightmare of the commute into and out of the city twice a day for the arbitrary reason of being in an office at an arbitrary time and wasting their time, burning carbon unnecessarily and clogging the roads. That quiet revolution is taking place and the only thing holding it back is lack of broadband. People consistently contact me about getting the broadband they need at home. They work for all sorts of companies in various places. They tell me they can do half of their work from home rather than going into work every day. Imagine what that would do for the traffic. That is a very simple move instead of building lots of roads. It is interesting that IKEA, which is a very smart operator, has an entire section for the home office. It knows what is happening. The home office is becoming big.

I am really sorry that reform - simplification for the ordinary person and taking the drudgery out of life - is not in this Bill when the Minister already has the information.

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