Charlie McCreevy (Kildare North, Fianna Fail)

The word "stealth" means unseen or underhand. As I stated in my budget speech, the real stealth tax is borrowing because it is the unseen thief whose services those in Government in the mid 1980s were only too ready to employ. Moreover, the progress made in debt reduction has released an additional €1 billion or so per annum for investment in public services which would otherwise have been spent on servicing the debt.

I make no bones about raising indirect taxes when they are needed to pay for better public services. My policy is to keep direct tax low to encourage enterprise and effort to produce the goods and services in the first place. Even on direct taxes, allegations of stealth taxes are thrown around without any proper analysis of the facts. The recent superior performance of tax revenue has been ascribed to the non-indexation of the tax bands. This is simply not the case. Tax revenue at the end of April was some €500 million ahead of profile. Half of this is due to a better CGT performance. Some €170 million of it was due to more income tax, of which €135 million is schedule D tax and Revenue investigations and €35 million was due to additional revenue from PAYE. Stamp duties provided an extra €60 million and other tax heads are more or less on target.

Most of the excess of €500 million is from capital gains, self employed and property taxes. Less than one tenth is PAYE which tax bands would affect. Despite my reputation, I seem to be soaking the rich. I can eagerly look forward therefore to middle-aged 1970s socialists coming over to my side. Despite my reputation, it was I who enhanced Revenue powers in the Finance Act 1999, resulting in the greatest crackdown on tax evasion by any Minister for Finance and an extra €1 billion in revenue for the State coffers.