Fergal Browne (Fine Gael)

It is good news if the revenue is up. The Government can take some credit for that but not all the credit. That is a reflection on the general economy. When we hear that road projects, for example, have gone €9 billion over budget, that the Government has underspent in general but overspent in specific areas, that demonstrates that it is mismanaging our finances.

It is dreadful that the Government is underspending when certain sectors are crying out for extra funding. A school group from Carlow, which visited the Houses today at my invitation, is seeking funding for a new building because the current building is unsafe. Students cannot use the gymnasium. I received a letter from another school this morning, in which it was pointed out that students are being taught in a storeroom with no windows or ventilation. It is criminal that such conditions persist, particularly when sufficient money is available but is not being properly managed. The Government should not clap itself on the back when it underspends every month but ask why it is underspending when the costs of major capital and infrastructural projects are significantly exceeding their budgets. Something major has gone wrong.

As regards taxation, I will concentrate on the issues people must face in everyday life, for example, the purchase of a house. Young Fine Gael had a successful campaign this year which revealed that tax accounts for 45% of the cost of a house. When the Government refers to low personal taxation, it ignores this fact.

At a meeting in Buswell's Hotel yesterday, SIMI noted the high cost of cars. Taxation, including VAT and vehicle registration tax, accounts for nearly 50% of the cost of an average car. Contrary to what the Minister appeared to hint, cars are basic items rather than luxuries.

VAT is a significant tax which impacts on people's lives. The changes to benefits-in-kind announced in the previous budget have had a negative impact on employees and employers. The bands for stamp duty on houses must be widened in the budget. We are discouraging people from purchasing second-hand houses which contributes to an artificial housing market. We should reduce stamp duty on second-hand houses and raise thresholds, some of which are unrealistic and result in those buying modest houses paying the top rate of stamp duty.

The Minister referred to complaints by the Opposition parties about certain tax reliefs. While I am proud that Fine Gael introduced the urban renewal initiative, it was appropriate in a different era. The party now favours abolishing these tax reliefs in light of the substantial change in the economy since then and their contribution to artificially high prices of houses.