Paddy Burke (Fine Gael)

I welcome the Minister, Deputy O'Dea, to the House. In his speech the Minister stated:

Section 122 amends the stamp duty regime for owner-occupiers who benefit from preferential stamp duty rates so that they are liable to a claw-back of relief if they let the house in the five years after purchase. This is being reduced to two years [I welcome that]. In addition, in respect of first-time buyers, an anti-avoidance provision is being introduced to address certain abuses that have come to light.

In the past ten or 15 years people found they were in breach of tax regulations and were required to pay back tax and in some cases very hefty penalties, which might have exceeded the original principal. People with money in accounts with foreign addresses or in accounts they did not declare paid large penalties. I ask the Minister to spell out the type of avoidance that is taking place which gives rise to the change in section 122 as he stated that "an anti-avoidance provision is being introduced to address certain abuses" within that section. We do not want to have another revelation in ten years' time whereby we might need to go back over certain abuses again. It should be spelt out clearly for the people who may be abusing the system without being aware and this is an opportunity for the Minister to do so.

The Minister outlined certain guidelines regarding tax administration, particularly increasing the existing surcharge of 10% to 20%, which is a very large increase and heavy handed. In recent years the Revenue Commissioners have been applying the regulations to the letter of the law. We are now seeing a 10% increase in a surcharge. People who unknowingly abused the system were required to pay large sums of money, in some cases considerably more than the original principal. Going from 10% to 20% will increase it further. If the Minister has some other view on the matter, he should outline it to the House.

As pervious speakers have said there is a downturn in the economy. Job losses and unemployment rates have increased. The unemployment rate has reached 5.2%, a significant increase in the past 18 months. Small businesses are under pressure given the environment in which they operate. The majority of small businesses are in the services industry. The stealth taxes include rates, water and sewerage charges, parking charges and others. There are major problems for small industries and particularly in the services sector. It should be streamlined where possible.

Local authorities will be also under serious financial difficulties if they keep going down the road they are. In recent years they have received considerable funding from development charges. With the decrease in the number of houses being built the amount of money coming into the local authorities' coffers will decrease significantly. My local authority, Mayo County Council, has applied a large increase to water and sewerage charges. The refuse system in the area is privatised. Business people are paying more than €10 per 1,000 gallons, which is a major cost for any business and particularly for small businesses. The pharmaceutical company, Baxter, in Castlebar is a large user of water. Given that the water and sewerage charges are applied on a water-in water-out basis, this is significant for any big employer, like Baxter. The local contribution, which in most cases now is 20% to 30% whether it is a small sewerage scheme or a small water scheme or an extension to mains drainage, is a significant cost for local authorities. The business community is required to pay for the commercial end of it. There will be serious problems down the road.

Some of the chickens are coming home to roost. In the past ten years the Government wasted €1 billion on the "Bertie bowl", PPARS and other projects. If that money were in the system, as Senator Twomey has said, we would have completed at least one interurban route.

IDA Ireland has outlined the difficulties in attracting investment. However, it has had some significant gains also. In the past ten years IDA Ireland created 48 jobs in my county, Mayo, which is the third largest county in the country, which tells its own story. It indicates that the Government is certainly not delivering to County Mayo, as was made clear in the reply to a parliamentary question tabled by Deputy Kenny which stated the IDA Ireland created 48 jobs in County Mayo. We are not getting our fair share. I notice there is an announcement nearly every month in the Cork region, which shows that a Minister brings a certain amount of weight to the area he is from. I heard Senator MacSharry raise an issue in regard to Sligo on the Adjournment debate last night. If the Government is serious about delivering to every area, it should also consider this one.