Mary Harney (Dublin Mid West, Progressive Democrats)

I will outline the reason for eliminating the three-year rule. If we allowed companies not to pay any tax for the first three years, clearly they would use various corporate structures to keep changing their status to avoid paying tax. The advice is that for as long as the three-year exemption exists, companies could use what is called in the business the hit and run scenario. They would do business for three years with a lot of young customers and then exit. That scenario does not give any clarity, certainty or fair competition. I was not advised last July. This issue arose in the context of the court case. We took legal advice, which recommended the law should not be changed until the judgment was given. It was given at the end of last year at which point legal advice was sought. The former Minister for Health and Children, Deputy Martin, was not aware of this loophole nor was anybody else because it was never envisaged that a company would sell a service company and not sell its insurance business, which is what has happened in this case.

The Government is committed to competition and unlike Senator Ryan, I believe that competition brings more innovation and we get better value for money.