Jim Walsh (Fianna Fail)

Ar an gcéad dul síos ba mhaith liom fáilte a chur roimh an Aire Cosanta, an Teachta Willie O'Dea, go dtí an Teach chun an Bille tábhachtach seo a phlé. Undoubtedly, although the Opposition may be slow to acknowledge this, around the world the economic fortunes of Ireland are seen to have improved beyond all expectations over the past ten to 15 years. Most economists were caught unawares by the significant growth patterns we achieved.

We are now entering choppier economic waters globally. There is a domestic aspect to this also in that our construction industry, which in recent years was a driver of growth rates, was primed strongly. This is no longer sustainable and we have now come to a downward spiral in that regard. This is not to say it is coming back to more realistic levels. Many of us would have argued some years back, when there was a reduction from the 10% and 11% growth we experienced at one stage in the early part of the decade, that it was not sustainable and that all infrastructure was coming under stress and strain as a consequence. The move we are experiencing now is a challenge and must be managed. We will do that from a position of having created a much stronger wealth base than the country has ever seen.

I was taken by the comment made by Senator MacSharry about the currency situation. This is one of the issues which impacts on economic growth, not just here but across Europe. The dollar is still a strong currency used as a barometer and financial tool for business in many industries. Europe showed, particularly 15 to 20 years ago before we got the common currency of the euro, that the economic and monetary union worked very effectively. We had a basket of currencies which, through certain disciplines, were able to fluctuate within certain well-defined bands. I am not sufficiently expert in this area but it strikes me that this system might be a model that could be applied to a global basket of currencies, such as the dollar, the euro, the yen and perhaps the yuan. An international effort should be made — perhaps the European Union could be the vehicle that would pursue this — to see if we can remove what is a risk factor in conducting business which is outside of the control of all businesses and is really an issue of market forces. While market forces in the main can be good, robust and healthy for business, sometimes they need to be tapered. Perhaps that could be done in this instance.

I agree fully with the comments made by Senator Quinn with regard to philanthropy. There is a compelling case to be made for charitable donations to be exempt from taxes. Certain very wealthy people, some of whom are tax exiles, get considerable credit for being philanthropic. I am much more taken with those who remain resident in this country, pay their taxes and still make their contributions to philanthropic causes. This should be equally recognised.

In his speech, the Minister underlined the tax equity that has taken place over the past decade in bringing in people who possibly escaped the tax net because of various tax avoidance schemes. It is a welcome development to see that the top 1% of income earners pay 25% of the income tax. The Minister said that this is up from 15% in 1997. The Minister and Senator Hanafin spoke about developments affecting the single worker. I remember that the tax wedge was a major issue when I entered these Houses. The tax levels deducted from people were an impediment to them doing overtime or any sort of additional enterprising activity. It also succeeded in putting people into the black economy.

Other measures I welcome include the continuation of the business expansion scheme seed capital fund and the research and development tax credit, which is a major area for investment and which will be a driver of the economy going forward. There is quite a long time-line in respect of getting the benefits from it. The Ministers for Education and Science and Enterprise, Trade and Employment, who spearheaded the importance and recognition in this area and came together to get a package of investment in the area, deserve commendation.

I will make some suggestions. Mortgage interest relief should be allowed at the marginal rate for purchasers of new homes. It is an anomaly that people who invest in section 23 properties and other such schemes can get relief at their marginal rate of 41% while those buying their first home cannot avail of that.

There is a case to be made for abolishing the 20% surcharge on undistributed profits in closed companies because it is anti-enterprise. There is a real need to exempt children from inheritance tax. It is only exempt between married couples. There is also a case for looking at exemption in the case of siblings where the threshold is very low at just over €40,000. Other groups are now looking to get the benefits that married couples have. It would be incongruous to think that children would be put in a prejudicial position in that regard. I am saying this from the point of view that if one leaves the wealth with the people, they will employ it more productively in assisting the economy than the State.

The Department of Finance is failing to tackle the large amount of what some would call waste across the public service. Up to €4 billion is being wasted annually. A colleague who works in the public service told me recently that he reckons that the amount is double that. One of the great successes that was initiated was the National Treasury Management Agency. We should have a national public expenditure cost efficiency agency to tackle this area. If we can generate savings from the waste we all see throughout all sectors of the public service, we will have the money to invest in areas which will prime the economy in a focused way that will increase the growth we seek to achieve.