Martin Mansergh (Fianna Fail)

I welcome the Minister and his officials. I allowed myself a little smile when I heard reference to competitiveness. While a decline in exports would be something to be concerned about, we have a €30 billion trade surplus, which is significantly more than 15 years ago. I was also intrigued to find an article in Le Monde a few weeks ago, which, without a hint of criticism, described Ireland as "the fiscal champion of Europe". That is a considerable compliment to the way in which the economy has been managed over the past ten to 20 years. We do not merely have a competitive tax system; we have a system that generates significant revenue.

The Minister, in his summary of the Bill, stressed a number of the key features such as the removal of those on the minimum wage from the tax net, the exclusion of workers on the average industrial wage from the higher tax rate and restrictions on high income tax payers. His budgets and Finance Bills have had a corrective, egalitarian tone. For example, the Green Party decision at its conference at the weekend to withdraw proposals to raise income tax and corporation tax was significant. Any party that seriously aspires to Government must accept the economic management argument has been won hands down by the Government. Despite what one may hear from different parties, proof that Sinn Féin is not seriously interested in Government is evidenced by the party maintaining its proposal to increase corporation tax by 5%. I defy Opposition Members to put their fingers on a proposal in the budget or the Finance Bill that can be said to have been inspired by a conversation in the Fianna Fáil tent at the Galway races, even though one hears this cliché about once a week.

The Finance Bill implements the main provisions of the budget, which include an 8.8% increase in the standard rate income tax band and a 17% in the employee tax credit. The Minister deserves credit for his firmness in resisting a great deal of behind the scenes pressure — perhaps the pressure people in theory think is applied in the tent at the Galway races — to modify or withdraw his proposals on the remittance system. He also deserves credit for increasing the allowance for families to employ carers from €30,000 to €50,000. It is expensive to look after old or infirm family members. We receive representations in this regard practically every week and this is an enlightened measure, as is the €10,000 income disregard for child minders. I was a member of the tax strategy group in the 1997-2002 period and this issue was batted backwards and forwards. A disregard of €6,000 rather than €10,000 was mentioned in those days but the nettle was not grasped. Nobody has attacked or criticised the Minister's measure because it is pragmatic and it will genuinely take care of part of the child care problem.

I highly approve of what the Minister has done on pension funds. People will be encouraged even more to make provision for themselves but there will not be an unlimited underwriting by the State of Rolls Royce pension arrangements, which is scandalous, otherwise, beyond a certain point, the State would subsidise multi-million euro pension packages for people who are perfectly capable of looking after themselves.

As part of the tightening up needed regarding the flouting of employment laws, the Minister has included a provision relating to agencies and mobile workers. It could be argued this is a new version of the non-resident accounts of ten or 20 years ago with people trying to find ingenious ways to get around employment laws, minimum wage levels and so on.

The Minister is introducing a limit on reliefs on incomes in excess of €250,000. As the Minister said, it must not be forgotten when people highlight the 20 or 30 people who pay no tax, which is a scandal, that, nonetheless, most income tax is paid by wealthy and well paid people.

Most of the property reliefs made a huge contribution but such reliefs only make economic sense if they are time limited and if they are abolished at a certain point. There is no better time for them to go, as the construction industry is clearly booming. The Minister indicated he will have to consider the utility of a form of incentive for park and ride facilities following expansion in public transport and residential units for older people. In my wider family, I have known people who are in a sheltered environment attached to a medical facility, which gives them freedom and independence. That is a worthwhile form of provision.

The Minister has put a cap on the relief for artists and writers, one of two particularly enlightened measures taken by his predecessor, Charles J. Haughey, in 1969. The regime will still be more favourable than anywhere else, other than countries such as the Bahamas where nobody pays income tax. It is possible that a number of people, probably foreigners, who are earning significant money, may be tempted to look elsewhere.

The Arts Council submission to the Minister contains a proposal for consideration that has merit and it relates to dance compositions. I am not as convinced about screen direction. On the other hand, the relief may be administered too lightly in other areas. Though this may seem disloyal, I do not see why, for example, ministerial memoirs should benefit from artists' tax relief, as that is not why it was devised. The relief should be for people whose main income comes from writing or whose work is clearly creative.

The Minister has been working in close consultation with the Minister for Arts, Sport and Tourism, Deputy O'Donoghue, on film relief. We have played around with the film relief over the past few years and there has been much discussion on the issue in the Joint Committee on Arts, Sport, Tourism, Community, Rural and Gaeltacht Affairs. There is no point in being mealy-mouthed about the relief. We should do it properly or not bother with it at all. It is recognised, even by the Opposition, that the beneficiaries will, inevitably, be relatively wealthy. The question must be asked whether we need to provide relief if we want to have a film industry in this country, and the answer is we do.

I regret the necessity to bring an end to the current form of the stallion tax relief. The Cheltenham races have vindicated the regime built up on that basis over almost 40 years. I looked at a 1935 report in the Oireachtas Library by Mr. Justice Wylie — who is also known in the 1916 context — into the horsebreeding industry which was clearly underdeveloped at that time. Stallion owners used have to pay a schedule D tax.

National heritage provisions have been welcomed. I draw the attention of the Minister to the fact that a full submission has been made to the Minister for the Environment, Heritage and Local Government with regard to heritage houses that are open to the public where the owners have relatively small incomes. If they are on substantial incomes, they can offset expenditure and this is a relatively simple procedure if they adopt the national heritage route. However, this may not suit every family's circumstances. A suggestion was made that investors could get some relief for investing in a heritage house which is not their own. The Minister has the detail on that proposal and I suggest he and his colleague could examine the matter, without prejudice.

I welcome the measure on biofuels. In general, I admire the great improvements in the administration of the tax system. Twenty years ago there were nightmarish aspects to taxes with self-employed people getting vast estimates. I have received a complaint from one practitioner who had difficulty getting through to helplines and this is something that must be examined.

In the context of the Kyoto Protocol, considerable concern has been expressed in the House that it appears rail freight is being completely phased out. Most countries operate modest subsidies in this area and this is something that should be considered in our transport policy.

Senator John Paul Phelan raised the matter of the roll-over of capital gains tax in the agricultural area. I have some sympathy with his case. I have less sympathy with a roll over in the case of land sold in towns and cities. We pay vast sums of money, not to build transport infrastructure but to compensate people for little strips of land. I was in France last week and happened to hear an item on a news programme about Budapest building its first metro line for €800 million. This is a fraction of what is proposed here.