Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

The Minister will be aware of my long-time opposition to this scheme. When it was first introduced Deputy Joan Burton, who was a Minister at the time, insisted that it was linked to jobs when it was not so linked. It became evident that it was a way of introducing a lucrative tax reduction for high-income earners who were not already in the State. We should bear in mind that the scheme provides for an exemption from tax of 30% of a person's earnings above €75,000.

To add insult to injury, the Government was led by the nose by accountants. This scheme did not come from the former Minister for Finance, Deputy Noonan, or the Department. It came, as we were hearing at the time, from accountants who suggested increasing the threshold and expanding this scheme on the basis that it would result in a significant number of new jobs. The Government threw caution to the wind and refused to apply a cap. We welcome that the Minister is at least recognising the folly of the Government's mistake and reverting to the position of having a cap in the legislation. However, as my colleague pointed out, the scheme should be abolished.

There is an onus on the Minister to explain how the cap of €1 million was arrived at. Where is the evidence to suggest that €1 million is the appropriate amount? Will the Minister state, in black and white, the amount of income that can be disregarded for tax purposes? Will he also tell the House what has been the benefit of this scheme? What real analysis has been done of the scheme? I have looked at the forms that companies must fill out to enable their employees to avail of this relief and there is no doubt that gaming of the system could be taking place. This is a lucrative tax relief for high income earners.

While I welcome the decision to defer the flat-rate expenses, it is only a deferral because, as he indicated in reply to a parliamentary question, the Minister wants this to take effect with the abolition or restructuring of other flat-rate expenses. Workers, whether nurses, members of the Defence Forces or teachers, will now look closely at what is in store for them in respect of flat-rate expenses. Compared with the SARP, which allows for a portion of income above €75,000 and up to €1 million to be disregarded, their reliefs fall into the ha'penny place. This speaks to the priorities of this Government.

As I stated, I welcome that the Minister is recognising the folly of the mistake in expanding this scheme and abolishing the cap. Nevertheless, he has not restricted the scope of the scheme. I reiterate that Sinn Féin warned the Government about this. Who seriously listens to the big accountancy firms when there is no evidence to show that they have a case? Who allows a scheme to operate in this unlimited way in the belief that it will not have this kind of impact? The problem is the Government's view that when it comes to high earners and the super wealthy, the Finance Bill will always be available to assist them.

As I stated, while this amendment is an improvement, it still allows for a significant reduction in tax for certain employees who are now in the State and who will take up employment in the next two years. The relief is not available to those who are already here and in employment. The questions I have asked need to be answered. While I welcome the decision to place a restriction on the scheme, it should be abolished in its entirety.

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