Martin Mansergh (Fianna Fail)

The Minister of State's answer will not be sufficient this time next year. We must take a fundamental look at the issue. His point is perfectly valid in that if one does not have a taxable income one cannot benefit from tax credits. Across the water, Gordon Brown's budget has a two-tier system. One tier deals with the problems of people effectively below the threshold — those assisted by family income supplements. The other deals with working parents on middle incomes.

Many reports have been written about the issue and one can listen to the experts or the people. We must address that issue. Who is best able to come up with an answer? This will be a big issue going into the next general election. I am not referring to this particular Minister for Finance, but to the office of Minister as a body corporate. The Minister has a somewhat cautious approach to this area, but that will not achieve more in the future. We must look at some of the other systems.

Our system of child tax credits was abolished in the mid-1980s, which was a bad decision because it meant the tax system no longer recognised extra costs and responsibilities. It was part of a stream of so-called tax reforms back then, when many reliefs and allowances were discontinued. Of all the reliefs, allowances and schemes to get rid of, why pick on children first? I am not quite sure. To be fair, at the time it was abolished the credit was down to an absolutely nominal figure of approximately £100 per child.

The tax system must once again recognise people who have children and child care costs, and this nettle must be grasped. Yes, it will be expensive and for that reason it may not be possible to do something at the same time as the more general and usual income tax relief. However, I would strongly advocate, as would my colleagues on both sides of the House, that the issue must be addressed and I recommend this to the Minister and interdepartmental committees.

The Minister for Social and Family Affairs, Deputy Brennan, has given clear signs of wanting to tackle the issue, and I wish him all the best. However, the present approach, even if refined and extended, will not in itself provide the complete answer. Child benefit certainly does not provide the answer.