Dáil debates
Tuesday, 7 December 2010
Financial Resolution No. 23: Income Tax - Artists' Exemption
I wish to deal with Financial Resolutions Nos. 19 to 23, inclusive. Financial Resolution No. 19 deals with the treatment of relevant trading charges on income and the compensation of the relief due in respect of foreign tax paid by a company on its foreign income. In general, relevant trading charges on income are paid on royalties paid in the course of a trade. Schedule 24 of the Taxes Consolidation Act 1997 sets out how the amount of such relief is computed.
Paragraph 4(5) of that Schedule 24 permits a company to allocate certain charges on income as it thinks fit for this purpose. It has been generally accepted that paragraph 4(5) does not permit a company to allocate relevant trading charges on the income in this matter. This financial resolution puts the position beyond doubt. The resolution will be effective as from today. It will apply to, first, all returns for corporation tax, second, all claims to repayment of corporation tax and, third, all claims to reduction of liability to corporation tax made to the Revenue Commissioners from today.
Financial Resolutions Nos. 20 to 22, inclusive, deal with the restriction and the phased abolition of property based legacy reliefs related to section 23 type reliefs on capital allowances. In the period since budget 2006, virtually all the area based and property tax incentive schemes have been terminated. Subject to transitional arrangements on projects already in the pipeline, all of the urban renewal, town renewal, rural renewal, accelerated capital allowances for hotels, capital allowances for holiday cottages, student accommodation, multistorey car parks, third level educational buildings, sports injury clinics, park and ride facilities and general rental refurbishment schemes have by now come to an end. In addition, most of the remaining property reliefs in the health and child care areas have been abolished, with similar transitional arrangements.
Different variations of these schemes have been in existence in one shape or another since the early 1980s and even though the schemes have, by and large, ended, there is still an ongoing legacy cost to the Exchequer as the various tax reliefs which were originally given are gradually being used up by the investors. The Government has clearly stated in the national recovery plan that in current circumstances it is no longer acceptable that measures abolished as far back as 2006 should continue to cost almost €400 million per annum. We have committed to the phased abolition of these legacy reliefs over the period of the plan.
The restriction of reliefs measure which was introduced in 2007 and further enhanced in 2010 has already curtailed the ability of individuals to utilise these reliefs, thereby spreading the cost over a much longer period. Although the annual Exchequer cost of these schemes is expected to decline in future years anyway, the way in which the reliefs are claimed against taxable income means it may take considerable time before the tax system is finally clear of them. In the context of the national recovery plan, the Government has decided to take steps to curtail this legacy cost over a much shorter and definite time period. These steps are provided for in Financial Resolutions Nos. 20 to 22, inclusive, which will commence with immediate effect.
There are two broad categories of tax relief which are addressed in these measures and they apply equally to companies and to individuals. These are tax relief for residential rental accommodation, commonly known as section 23 type relief, and accelerated capital allowances in regard to the provision of a wider variety of buildings and structures. These allowances can be made over seven, ten and greater than ten year periods, depending on the circumstances. The third category of residential relief which applies to owner occupiers is unaffected by these current measures. There is a natural end date to this form of relief in any case.
Under the heading of section 23 type relief, the following changes are being introduced with immediate effect. The current rules require that to avail of the relief the property must be let under a qualifying lease for the first ten years. From 1 January 2011 any relief which is not used in the ten year period will be automatically lost. Properties which have already passed the ten year deadline will not be allowed to carry unused relief forward in 2011 while all other properties will lose it once the ten year deadline has been reached.
Until now, section 23 type relief can be set against all rental income of that person. From 1 January 2011 the use of the relief will in all cases be restricted solely to rental income from the section 23 property itself. Currently, when a person sells a section 23 property within the ten year period, any relief already given to him or her is clawed back and given to the new owner, who only has to hold the property for the balance of the period. From 1 January 2011 the claw-back will continue to apply but the new owner will get none of the relief.
Finally, for section 23 properties which remain unsold as of 30 June 2011, the ten year period will begin on that day. If such a property is not sold for a further two years, for example, there will only be a further eight years in which to claim the relief. In effect, this new measure will ensure that all section 23 type relief will end by 30 June 2021.
Under the heading of capital allowances there are two discrete but interlinked classes of changes which are being introduced in these financial resolutions. The first change will narrow the range of incomes to which the allowances can apply while the second change will curtail the ability of the person to carry forward unused allowances beyond certain deadlines. All of these measures apply with effect from today. The measures will only apply to capital allowances arising under the various incentive schemes to which I referred earlier and only to persons who are passive investors in the relevant businesses. By that, I mean those who are not actively engaged in the conduct of the respective businesses. These prescriptions are already well understood and are already provided for in a related context in tax law.
With immediate effect, where any individual becomes entitled to capital allowances in respect of a building or structure for use in a trade, those allowances may only be set against the income of that trade. The allowances can no longer be used against income from another trade or against any other form of income. This restriction will apply to allowances arising in any particular year as well as those carried forward from a previous year.
Where a person has let a building or structure and is receiving rental income from it, capital allowances may only be set against the rental income from the building or structure itself. This restriction is analogous to one restricting the use of section 23 type relief. Currently, the rate at which normal capital allowances for industrial buildings is given is 4% per annum over 25 years. Under the various property and area based tax incentive schemes, this period can be shortened to seven or ten years, and in some cases to periods greater than ten years but less than 25 years. Obviously, the annual rate of allowances is higher when the period is shorter, and these are commonly known as accelerated capital allowances.
The changes which are being introduced will apply with effect from today and are as follows. For the seven and ten year schemes, any unused capital allowances carried forward beyond the seven or ten year end dates will be lost. This will apply both to circumstances where the end date has yet to be reached and those where the date is already passed. In the latter case, the carried forward amount will be lost immediately. Where the capital allowance is given over a period greater than ten years, this period is now being revised downwards to seven years from the year it was first claimed. The consequences of this are that, in circumstances where this seven year period has already elapsed, any capital allowances which have yet to be given, as well as those carried forward in the current year, will be lost. Where the seven year period has not elapsed, the aggregate of capital allowances not yet given by that time will be reduced by 20% and given over the balance of the seven year period. In all cases, any capital allowances carried forward beyond the seven-year period will be lost.
The reason for introducing the amount of future capital allowances by 20% in these circumstances is to take account of the fact that these allowances are now being made available faster than would otherwise have been the case. In fact, these types of schemes tended to frontload the allowances, typically with 50% of the total allowance being made available in the first year. The impact of the 20% reduction in these circumstances is modest.
A guillotine will be introduced to terminate all unclaimed and unused capital allowances arising after or carried forward from 2014 as well as unused section 23 relief carried forward from 2014. An impact assessment will be undertaken of the effects of the phased abolition of the property based measures and the guillotine provision.
In conclusion, I accept these are radical changes to the terms of these property schemes. However, the current economic circumstances demand that these radical steps be taken now rather than later. I am confident that, over the course of the national recovery plan, the Exchequer impact of the legacy of these area based and property tax incentive schemes will have been significantly reduced by this series of measures. On that basis, I commend these financial resolutions to the House.
Financial Resolution No. 23 amends section 195 of the Taxes Consolidation Act 1997 in regard to the income tax exemption which currently applies to the earnings of artists. The effect of the resolution will be to limit for the tax year 2011 and subsequent tax years the amount of the exempt income to €40,000 per claimant per annum. In section 195 there is currently no limit on the amount which can be claimed per annum, although the high earners restriction introduced in 2007 and extended in 2010 may limit the amount of an artist exemption in cases where gross income reaches €125,000. Over a full tax year, this measure is expected to produce a saving of approximately €14 million.
10:00 am
Brian Hayes (Dublin South West, Fine Gael)
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With regard to Financial Resolutions Nos. 20 to 22, inclusive, the Minister is correct to state this is quite a radical change. Nonetheless, it is a change that has been largely supported on this side of the House, at least in respect of bringing to an end some of the reliefs that have been in place for some time. How is it possible that a figure of €100 million is given as a potential saving in a full year? It presupposes that we know the total number of individuals who have been able to obtain the section 23 relief thus far. If the Minister claims that a saving of €100 million can be made in a full year, will he inform the House as to the number of individuals affected by the roll-up?
The Minister stated that the guillotine provision will be introduced by 2014, by which time all the unused capital allowance must be lost. Why was 2014, which is three years from now, selected as the date? Given the desire to have a greater yield, why was an earlier date not set? The Minister said the full impact statement has yet to be determined. One would have expected that it would have been in place before the decision was arrived at.
With regard to the changes to the artists' exemption, many people have been arguing for some time that we should have been moving in this direction. I hope the change will not destroy the possibility of Ministers on the other side of the House writing their memoirs when they move to this side of the House in the next few weeks or so.
Michael Creed (Cork North West, Fine Gael)
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Would the Deputy call that a work of art?
Brian Hayes (Dublin South West, Fine Gael)
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A work of art and creativity will be very much in vogue at that stage.
Some measures, particularly those in Financial Resolutions Nos. 20, 21 and 22, have been advocated for some time. I am interested in hearing answers to the questions I have posed.
Pat Rabbitte (Dublin South West, Labour)
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The Minister stated, in introducing the measures on property-related legacy issues, that the cost was €400 million. Is the yield of €100 million a quarter of this? Does it mean the changes being made to the schemes will result in a yield that is 25% of the yield that might accrue if the pruning were more severe? What are the considerations in trying to make the restrictions more severe? Are there contractual issues or others that constrain one? Reliefs in this area fuelled the system that resulted in much of the overhang of housing and apartments. The section 23 relief, which is probably the best known, will be restricted in application to income from section 23 property as distinct from rental income.
The wish is to try to have some kind of market operating again in terms of disposing of the overhang in urban areas, where there is undoubtedly pent-up demand. However, young people and first-time buyers do not want to move if they believe that, in six months, values will have fallen by another 7%. It is very difficult to know the floor in circumstances such as these. It is important that some kind of market be regenerated where there is a population and demand, for all the obvious reasons, but some of what are referred to as legacy relief schemes have outserved their usefulness and ought to have been brought to an end or pared back long before now. Why is €100 million the figure determined for a full year? Why not €200 million in a full year? What difference would the latter figure make? Are there contractual or constitutional impediments in the way of pruning more severely?
What judgment was brought to bear on the capping of the earnings threshold for artists? As with many exemptions that served a very useful role at one stage, the artists' exemption came to be abused. I do not know the result of the cost benefit analysis. If one makes the threshold relatively harmless, is the exemption of any value in attracting artists to live here who might not otherwise consider doing so? Does the Minister believe the threshold of €40,000 is well judged?
Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Ba mhaith liom déileáil leis an exemption ó thaobh ealaíontóirí. As with Deputy Rabbitte, I would like the Minister to explain where the €40,000 figure has appeared from. It seems to have come from nowhere. It does not account fully for the context in which artists earn their money. A sum of €40,000 may sound like a lot of money but if one is an artist working on a commission that takes two years, one must pay tax for one year rather than two years when one gets paid.
The circumstances of many artists must be borne in mind. Most of them will not even reach the threshold. Certain artists who formerly enjoyed the artists' tax exemption disappeared from our shores as soon as there was a hint of capping the exemption. Some big bands are included in this regard. I do not believe the exemption was ever intended for rich artists, but perhaps it was. It may be the only good legacy of Mr. Charlie Haughey. Ireland has benefited from it.
There needs to be a cost benefit analysis. The Minister referred to encouraging tourism. One attraction of having internationally famous artists here or their works is that people will travel to view where an author grew up or to see a work of art. Will the Minister explain where the figure of €40,000 came from? We should not have an open-ended exemption but should bear in mind that a threshold that would benefit tourism and artists would be higher than €40,000.
John O'Donoghue (Kerry South, Fianna Fail)
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Every Member of the House will agree that the perception of today should never be utilised for formulating the policy of tomorrow, but that reality should. In that context, it is extremely important that in dealing with the Financial Resolutions, we remind ourselves that behind every collapsed developer and building company are thousands of workers, including plumbers, carpenters, bricklayers, brick carriers and many others who-----
Enda Kenny (Mayo, Fine Gael)
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And carpet fitters and carpetbaggers.
John O'Donoghue (Kerry South, Fianna Fail)
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-----find themselves unemployed and who have little prospect of working in the construction industry in this country in the foreseeable future.
I fully understand why the Government has brought forward the provisions it has introduced this evening. As implied by Deputy Rabbitte, the market was over-fuelled. There are more than 2,000 ghost estates, not just in urban centres but in other centres across the country. Seán Lemass, the former esteemed Taoiseach, reputedly said, "Tell me how many bags of cement you sold last year and I'll tell you the state of your economy." I appeal to Members of this House, in accelerating our desire to ensure a property bubble of the nature that occurred does not recur, to remind ourselves that one day not so far away a future Government will have to come into this House and ignite the spark of the construction industry again. Its failure to do that at some stage in the future will mean a continuum of unemployment for thousands of ordinary workers. When we use euphemisms to describe the collapse of the building industry, let us also ensure we remind ourselves of where precisely we are coming from, where we are and to where we must get back.
Enda Kenny (Mayo, Fine Gael)
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And that when it is reignited it will not get out of control like the last time.
John O'Donoghue (Kerry South, Fianna Fail)
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With regard to the artists' exemption, it would be remiss of me and of Members of the House, and I compliment Deputy Ó Snodaigh on doing so, not to remember the contribution the artists' exemption has made to Ireland and its people. It was the brainchild of the great Irish poet, Anthony Cronin, who happily is still with us, who inspired Charles Haughey, the then Taoiseach, to bring forward this relief. It was not meant to make millions for any given individual. It was not meant to set up record companies, and it certainly was not meant to create an elite. It was meant to give expression to Ireland's unique cultural identify and in that context it was also meant as a haven for great artists who might come into this country and give expression through painting, poetry, novels or other ways to Ireland's history and cultural heritage. To that extent, let it be said, it was an enormous success.
I understand the economic exigencies which see the ceiling come down to €40,000 and I understand the philosophy behind that, but I am greatly minded of the words of William Butler Yeats who said one should never seek to extract the marrow from the bone. He wrote:
What need you being come to sense,
But fumble in a greasy till
And add the halfpence to the pence
And prayer to shivering prayer, until
You have dried the marrow from the bone.
Michael Creed (Cork North West, Fine Gael)
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I remind Deputy O'Donoghue that Yeats also wrote: "All changed, changed utterly: A terrible beauty is born." Regrettably, that is the reality we are coming to face in painful and stark terms in the context of this year's budget.
I am particularly interested in two issues, the first of which is the changes in section 23 reliefs. What is the basis for the Government's decision to restrict the rowing back of reliefs just to the section 23 developments? For example, we have developments in the student accommodation area which were equally attractive and which fuelled extensive provision, overly extensive in certain locations. What is the basis for the singling out of section 23? Why is it that others were or were not looked at as the case may be? Is the figure of €100 million a guesstimate or is there some scientific basis behind it?
I am also interested in the artists' relief, although not so much on the basis of the figure of €40,000. I would preface my remarks along the lines of the previous speaker and Deputy Ó Snodaigh to say that in times such as those in which we now live, very often the only ray of hope and light relief we get is from the artistic community. It is very important that especially those who are struggling to make a living, many of whom have operated on incomes at or below the minimum wage, are given every assistance possible.
I am interested in what constitutes artistic endeavour, and the Minister might address this in his response. We have ghost written autobiographies of former leaders of this country which qualify currently for exemption under the artistic endeavour clause in this scheme. That is not for what it was ever intended. It must be about creativity. It must be about fostering a climate of-----
Pat Rabbitte (Dublin South West, Labour)
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There was a fair amount of creativity in one of two of them to which the Deputy is referring.
Michael Creed (Cork North West, Fine Gael)
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Yes, certainly, but-----
John O'Donoghue (Kerry South, Fianna Fail)
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And in ones to which the Deputy is not referring.
Michael Creed (Cork North West, Fine Gael)
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We have strayed a long way from the original raison d'être for it. This is an attempt to go back to basics but critical to that would be a clear definition of what constitutes artistic endeavour. As I understand it, it is a question of a negotiation or a conversation between the Revenue Commissioners and the artist. That is too loose an arrangement to be acceptable. I note the former Minister is nodding his head to the effect that it may not be that loose an arrangement but that is the impression that has been given. The Minister might clarify that matter.
Seán Ardagh (Dublin South Central, Fianna Fail)
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I want to declare an interest in that I claim relief under section 23. I want to refer to this measure not in regard to my case but to a more general case. Deputies Ó Snodaigh and I are in an area where there are hundreds if not thousands of empty section 23 apartments along Cork Street and in that vicinity. Many people who have purchased and are the landlords in those apartments are civil servants, public service workers and people who earn a PAYE income. They are good landlords who look after their tenants. Some of them operate through the rental accommodation scheme. The amount of trouble that emanates from the section 23 measure is minimal in comparison with the rogue landlords who sometimes operate in the multi-unit old houses who act in a totally different manner. If those hundreds of apartments are to sell in my constituency, for a two-bed apartment one is talking about €250,000 and if one gets a rental income of €1,000 a month, €250,000 at 5% is €12,500, the interest on the loan would not be covered by the rent, leaving aside management charges, insurance cover and all the other items.
I would like the Minister to consider in the Finance Bill the implication of the loan that has been taken out on the understanding that there would be the wherewithal to pay it from other rental income that would have offset to some extent the tax that would otherwise have been paid. There is no way that in ten years the capital cost of any section 23 apartment will be covered by the rental income from that 23 apartment. It is inconceivable, unlikely and cannot be done.
In regard to the artists' exemption, most of the artists in this city earn significantly less than €40,000. They are more likely to earn €20,000, €25,000 or €30,000 per annum. Taking into actors who are resting, which is the term commonly used, for a long period, the idea of having a €40,000 base is excellent. At the same time it means that those such as Bono and other members of U2 and major authors who can afford it will be able to pay on the basis of what they can afford.
Pearse Doherty (Donegal South West, Sinn Fein)
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Ar Rúin Airgeadais 20, 21 agus 22, iarraim ar an Aire na faoisimh cánach atá ar fáil faoi alt 23 a shoiléiriú. Nuair a bhí mé ag éisteacht leis an Aire Airgeadais níos luaithe, dúirt sé go gcuirfí deireadh leis na faoisimh seo i 2014. Ag amharc ar na sonraí, áfach, tá sé soiléir go mbeidh cuid dóibh ar fáil go dtí 2021. Iarraim ar an Aire é sin a shoiléiriú. Níl dabht ar bith go bhfuilimid ag bogadh sa treo ceart. Tá mo phairtí ag rá le fada an lá gur cheart dúinn deireadh a chur leis na faoisimh seo. Is mór an trua gur ghlac sé an oiread ama seo don Rialtas tús a chur leis an bpróiseas sin.
Ba mhaith liom cuid de na pointí atá déanta agam a shoiléiriú i mBéarla. I note in this speech earlier today the Minister for Finance, on the property based reliefs, stated, "This last provision will effectively terminate all property-based reliefs in 2014." He went on to state that all details are set out in the Summary of Budget Measures. When one looks at the Summary of Budget Measures, it does not seem that all those property reliefs will be finished in 2014. If we look at the section 23 reliefs for properties that have yet to be sold, what is being proposed here is that the ten year qualifying period for unsold properties will kick-start on 30 June 2011, regardless of them being sold. Therefore, the summary continues, "in such cases no Section 23 relief will be available after 30 June 2021." Is it the case that section 23 reliefs will still be made available to people ten years from now, and further than that, up to 30 June 2021? How does that correspond with the Minister's statement today that this will effectively terminate all property based reliefs in 2014? That takes me to the second point. Why are we looking at 2014 for the guillotine? Why can we not introduce the guillotine earlier?
Even in the case of the section 23 properties that are not sold, why are we starting the effective ten year period on 30 June 2011? Why are we not starting it tonight, next week or in January? Why are we giving that additional six month period? Are we serious about phasing out these reliefs? What are the blocks here? Are there legal blocks to stop us introducing the guillotine earlier? Can we not phase out these reliefs any quicker?
These people gambled on property. I disagree fundamentally with one of the previous speakers, Deputy O'Donoghue, when he spoke about fuelling the construction sector. We want to fuel the construction sector. That is why we are arguing to build schools, hospitals and roads, but we will not start building property again to lie idle and then provide reliefs for the next ten or 11 years on the back of which persons may claim tax exemptions. I seek clarification on those points.
Tony Killeen (Clare, Fianna Fail)
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There were a number of questions on the section 23 and other property reliefs. As participants joined the schemes at different stages, many have availed of some of the reliefs at this point. Others have availed of less of them. That is why 2014 was selected as a median date in terms of addressing all of the considerations, which are many when one considers the various schemes and the differences that arose between the various properties. Some of them, I understand, are as old as 20 years. The belief was that some measures which were introduced in 2006 would have the impact of finishing these schemes much quicker than has been the case but, because of the nature of their design over several years that has not been possible and the decision to go with 2014 is a median that seems to be acceptable, and reachable, which is an important consideration.
Deputy Rabbitte asked about the constitutional and legal considerations, if there are any. The legal advice is that the restriction on the property reliefs is legally sound. However, there is also advice that the speed in closing down the reliefs needs to be proportionate. That is a standard consideration in matters of this nature in any event. The advice also suggested that it was appropriate to have a full assessment of the impacts before the complete shutdown of the scheme in this instance.
Pat Rabbitte (Dublin South West, Labour)
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Is the Minister stating that a €200 million saving as distinct from a €100 million would not be proportionate?
Tony Killeen (Clare, Fianna Fail)
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I will come to that in a minute on how the €400 million and the €100 million is reached.
The final close down in 2014, the guillotine which I mentioned, is designed to allow for this assessment to take place on the full impact of the way the are being wound up and to ensure that all possible impacts are identified and taken account of in view of the considerations mentioned by Deputy Rabbitte and others.
Based on the latest data, the cost of the legacy reliefs was estimated at €400 million and when developing the initiative to terminate the schemes, the timescale of four years was taken as being a median being acceptable in terms of achieving the assessment and in terms of winding down in a proportionate manner, and on that basis the €100 million arises as a quarter of the €400 million.
The points made by Deputy Ardagh were considered when this proposal was being developed and the view was taken that, no more than anybody else in society, those who were involved with the section 23 schemes ought also to make a contribution towards the financial adjustments being made currently.
Deputy Creed asked about student accommodation and all of the other schemes which I listed at the beginning of my contribution - there are approximately a dozen of them in all. They all are restricted by the capital allowances restriction and, in fact, in most instances have been restricted previously, both in 2006 and earlier this year. The figures are based on the Exchequer costs in recent years, and the Exchequer costs have dropped in the past year.
D'iarr an Teachta Ó Dochartaigh ceist faoi na faoisimh cánach a chríochnóidh i gcoitinne i 2014. Dúirt sé go mairfidh cuid acu go dtí 2021. Baineann na faoisimh áirithe leis na foirgnimh faoin scéim seo nach bhfuil díolta go fóill, agus nár thosaigh an tréimhse deich mbliana a mbaineann leo go fóill. Mar a dúirt an Teachta, caithfimid iarracht a dhéanamh bheith cothrom do dhaoine sa scéim ghinearálta. Ní chóir go gcuirfí deireadh leo anois láithreach, de bharr na fadhbanna a luaigh an Teachta Rabbitte agus Teachtaí eile. Is é sin an fáth go bhfuil cuid dóibh, a bhaineann leis an chás a luaigh an Teachta Ó Dochartaigh, á choinneáil.
Most of the Deputies mentioned the exemption in reliefs for artists. The first point to bear in mind is that the Commission on Taxation recommended that this exemption be finished and the Government took the view that there were some benefits, as outlined by several Deputies. Luaigh an Teachta Ó Snodaigh cuid díobh nuair a bhí sé ag caint.
John O'Donoghue (Kerry South, Fianna Fail)
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I would say there were not too many votes on the Commission on Taxation.
Tony Killeen (Clare, Fianna Fail)
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Deputy O'Donoghue will appreciate that one must take a balanced view of these matters.
That was the background against which the decision was taken. It is well to bear in mind that the Commission on Taxation recommended the abolition.
The average income of the artists availing of the scheme is of the order of €32,000. This is a little above the average. Many Deputies will have heard from various artists that the benefits from participation in, or having the availability of, the scheme are considerable for those on fairly low or modest earnings. On that basis, the Government considered that going with the Commission on Taxation proposal was not a good idea. I can assure Deputy Brian Hayes that I have no plans to write memoirs. I regret somewhat that I did not keep a diary of some of the events.
Enda Kenny (Mayo, Fine Gael)
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There are others over there who will write them.
Tony Killeen (Clare, Fianna Fail)
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In any event, no doubt there will be plenty.
Enda Kenny (Mayo, Fine Gael)
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They are already half-way through them.
Tony Killeen (Clare, Fianna Fail)
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I think I have answered most of the questions.
Pearse Doherty (Donegal South West, Sinn Fein)
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I return to the section 23 reliefs for properties that are not sold. The Minister spoke of proportionality, but it is wrong if the Government is willing to allow for section 23 reliefs to be paid up until 2021. The whole country is demanding that we end these property based reliefs. I stated already that the Government is moving in the right direction, but it is fundamentally wrong to allow property based tax reliefs to continue for a period of 11 years.
If we park that point to one side now and say that I will lose the argument that we should introduce a guillotine on these the same as we are doing in terms of the 2014 measure, it may be proportionate for us to only allow the reliefs for the houses that are not sold for a five year period so that at least they would be phased out over half the period that the Minister is accepting. Why can we not introduce the ten-year period for these reliefs now? Why are we allowing six months prior to the ten-year period kicking in? I refer back to the Minister's statement today which he made to the Dáil but during which he spoke to the nation when he said that effectively all property tax reliefs will be finished by 2014. This is simply untrue given the measures contained in these resolutions which will allow property tax reliefs until 2011 and a grace period of six months before the start period kicks in.
Tony Killeen (Clare, Fianna Fail)
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I should have made clear that in the assessment and measure of what is proportionate - which is somewhat difficult to measure from this perspective - it may well be that the closing date about which Deputy Doherty complains may come under the 2014 guillotine, but at this point the assessment has not been carried out; it will be carried out during that timescale and may well impact on the closure date for the cases about which the Deputy has expressed concern.
Séamus Kirk (Louth, Ceann Comhairle)
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We have reached decision time on this group. I am required to put the following question in accordance with the order of the Dail of this day.
Tony Killeen (Clare, Fianna Fail)
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I move the following financial resolutions: