Martin Mansergh (Fianna Fail)

I warmly welcome the Minister and his officials. I agree with Senator McDowell that it is important to get the history right. Of course I welcome the motion under discussion and I am glad that keeping the public finances in a healthy condition is put first. In 1987 there was some argument as to whether one should cut taxes first in the hope that the public finances would return to a state of order because of the stimulus involved, or whether one should freeze all tax reliefs and concentrate on putting the public finances in order. The latter was what happened first. In 1989, Albert Reynolds, who was part of a Fianna Fáil minority Government, cut the standard rate of tax by 3% and the higher rate by 4%. This policy continued under the Fianna Fáil-Progressive Democrats Government between 1989 and 1992 and was resumed after 1997.

On the question of income tax, it is striking that there has been a reduction of 31 points in rates of taxation since 1987. Governments involving Fianna Fáil Ministers for Finance have been responsible for 30 of the 31 points. The Progressive Democrats, while in coalition with Fianna Fáil, have been responsible for approximately 25 points while Fine Gael and the Labour Party were responsible for just one.

Perhaps Senator Ryan is being a little optimistic. I accept that there is now much broader acceptance and consensus that low tax rates are to the benefit of the economy but it is clear that the Labour Party is making noises about capital gains tax that suggest it is not fully convinced it should remain at 20%. The party disliked it intensely initially. I am sure people in business will duly note that. Prospective partners such as the Green Party are very keen on carbon taxes and——