Derek McDowell (Labour)

I made positive remarks about this section on Second Stage and repeat them today. It is a well worked-out section. However, I am trying to figure out how it will work in terms of the capital allowances. My understanding is that only those who have historically built-up capital allowances from before we introduced the cap would be in a position to exceed half their income, based on the sort of limits in place in the section. We are talking of people who availed of the urban renewal scheme back in the 1990s, and so on and, as someone described it, the "long tail" of that continuing into the future. The section allows for rollover and my recommendations sought to do away with that into future years.

Are we not just then rescheduling historically built-up capital allowances so that the tax benefits to individuals over the course will be the same anyway? We are engaging in some optics here. We are saying they will pay tax this year but the tax benefit to them of the capital allowance is simply being rescheduled over a long period of years. They are not at a serious disadvantage in that sense which I why I tabled the recommendation. It leads to discussion to say that some of the capital allowance should be lost by introducing that cap.

I have some sympathy for where Senator Henry is coming from. When we use the word "philanthropy" perhaps we should be more careful to define exactly what we mean. Philanthropy, as I understand it, is wealthy individuals or corporations giving to good causes. We are not just talking about that; we are also allowing wealthy individuals or corporations to give to good causes and to get a significant top-up from the Exchequer. They get to pick the pet cause and the Exchequer gives them a huge amount to subsidise it. I am more jaundiced than perhaps most people might be about allowing that choice to individuals. If the State is to give donations to universities, or whatever it might be, the State should just give them the money and make the decision for itself rather than have the decision made by wealthy individuals.