John Dardis (Progressive Democrats)

I said at the outset that much of government comes down to choices. This Government has chosen and implemented policies that simultaneously generate growth, prosperity and employment while creating the most generous tax and welfare system in the world for single income families on the average industrial wage.

This is a question of fairness. The Progressive Democrats' income tax strategy is aimed at maintaining full employment and strengthening the competitive position of the Irish economy by keeping taxes on labour low. However, it is also a policy which includes a particular focus on the low paid and the elderly. The system must be fair, and that is the crux of the motion before us this evening. We must ensure that the system remains fair.

Government policy has allowed the export-oriented private sector to propel the growth we have experienced in recent years. At the same time, the sheltered private sector and the public sector can hinder further gains. I note with concern reports in the weekend's newspapers which imply that one particular party is considering economic policies to in some way counteract foreign investment and promote some form of self-sufficiency. That was a failed approach of the Ireland of the 1930s. Those of us old enough can remember the economic war and the consequences of protectionism.

The view of the Government is that while the system of tax incentives has made an integral and positive contribution to development of our economy and society, we must make sure it operates fairly. To this end, we must welcome the announcement last December by the Minister for Finance, Deputy Cowen, of a thorough evaluation of the effect of all relevant incentive reliefs and exemptions. Most importantly, we must look forward to the proposals that emerge to achieve the desired balance between incentivising investment and development, and the wider good of society. My colleague, Senator Minihan, will later expand upon this aspect.

On the general point of the tax burden, over 656,500 income earners are now out of the tax net compared with 380,000 in 1997. That is in the context of nearly 500,000 more people at work. We have uniquely managed the massive increases in social spending which I have mentioned, while continuing to reduce the tax burden. During their 11 years in office, the Progressive Democrats and its Government partners have delivered 12 tax rate decreases and no increases. In contrast, Fine Gael and the Labour Party in their combined 17 years in office delivered four decreases and 12 increases. The Green Party seeks a range of new taxes, such as carbon, site value and housing land taxes. Sinn Féin wants to tax everything that moves.