John Minihan (Progressive Democrats)

Section 13 represents concrete action on Progressive Democrats' policy to increase child care supply and maximise choice for families. Increased supply will result in decreased costs. This provision inserts a new section into the 1997 Taxes Consolidation Act, a scheme of tax relief for income received from the provision of certain child care services. The €10,000 disregard was a key element of the Progressive Democrats' pre-budget policy. In conjunction with the early child care supplement, it provides a multifaceted and nuanced approach to assist families with child care costs with consideration of the variety of options chosen by parents.

Section 17 provides further evidence of my party's commitment to provide a tax system that both promotes growth and limits the ability of high-income individuals to use tax reliefs. Where a person is a high-income earner, restrictions will be applied to the extent to which specified reliefs can be applied to reduce the individual's tax bill. Such an individual can only use reliefs to reduce his or her tax bill in any one year to 50% of the individual's adjusted income, which is to be welcomed.

I have some concerns, however, regarding how proposed changes could affect substantial investments and capital plans, particularly those that have been made in the expectation that the law on reliefs would not be changed retrospectively. Any small enterprise will be aware that cashflow calculations often make assumptions or attempt to take into account the extent to which profit might be covered by certain reliefs, particularly for bank finance purposes.

In most cases, capital investment takes some time to organise, as does progress through our planning process. I am aware of concern from the hotel trade, for example, that legislative change to schemes designed to attract investment could have a negative impact on individuals who have invested in improving products and services for Irish and international consumers. I would be grateful to hear the Minister's view on this issue.

Section 40 inserts another new provision in the Taxes Consolidation Act 1997. This contains an incentive for SSIA holders on lower incomes to invest some or all of their SSIA funds into a pension product when their SSIA matures. Under the Bill a new pension initiative aimed at lower-income SSIA holders and those with underfunded pensions is to be introduced. Given that research shows that only half of those working who require private pension cover have a pension scheme and that some 50% of these private pensions are totally inadequate, this initiative is particularly commendable.

On a less publicised element of the Bill, I would be interested to hear the Minister's views on the changes to the Taxes Consolidation Act 1997 proposed in sections 47 and 48. Any change that could excessively increase compliance costs and negatively impact on international competitiveness should be handled with caution.

Governments are aware that unduly complex tax calculations can deter investment funds that market investment internationally. They are mindful of the costs of amending systems to cater for complex tax calculations and different treatment for Irish versus EU investments, as they can encourage business to avoid certain investments and/or encourage investment abroad. Irish investors should have maximum choice available to them. I would be grateful if the Minister could today, or at some time in the near future, set out his views on how sections 47 and 48 may impact on the investment sector.

We are continuing on our successful course that fosters enterprise and initiative, drives competition and efficiency, and provides the most generous tax and welfare system for single-income families in the world. That course has meant that in today's lreland we are generating more jobs and have more workers. Some 20 years ago, the challenge was to end the misery of unemployment and emigration as well as ending the cracked policy approach taken by successive left-driven Governments. Today's challenge is, thankfully, very different. It involves sustaining our progress and prosperity, working harder to protect and provide for the vulnerable, reforming public service delivery where necessary, integrating our immigrant workers, and further protecting our environment.

We must still guard against allowing a reversion to the policy approaches of a left-driven Government. This Bill is a step towards that end, as it demonstrates that the Progressive Democrats core belief, namely, that economic development and the provision of employment are the best defenders against poverty, is the right one for all in our society. In this context, I welcome this legislation.