Dan Boyle (Green Party)

The Finance Bill gives legal effect to many of the budget provisions announced in December, with a few additional measures that subsequently have been approved by the Minister for Finance and the Cabinet. The Short Title of the Bill describes it as:

An Act to provide for the imposition, repeal, remission, alteration and regulation of taxation, of stamp duties and of duties relating to excise and otherwise to make further provision in connection with finance including the regulation of customs.

This does not make the legislation very understandable to citizens, and part of our job within the political system is to translate many of the legal technicalities in legislation such as this, to show how it will improve the economy and hopefully the lives of our citizens.

The Finance Bill this year is largely a repetition of the measures announced in the budget. Unlike other Finance Bills in recent years, it is not an entirely new exercise of additional measures. There were very few new measures announced, as opposed to what had already been unveiled in the budget. However, there are significant measures and the one I welcome most is the provision of tax relief for companies seeking to purchase plant and machinery that will result in energy efficiencies. This will help to meet our greenhouse gas targets and work on two levels. It will reduce the cost base of many of these industries while helping to promote the idea of a green economy within the Irish economy. It will promote those who are seeking to develop and sell this technology throughout the economy, which is a measure especially to be welcomed.

Unlike many others who tend to look at the bleakest prognoses for the economy, I believe we are not in a recession, as is, to all intents and purposes, the United States, and this will impact on us. We are not in a slump, in the sense of reduced economic indicators. At worst, the Irish economy is undergoing a slowdown in that the rate of economic growth is slower than what it has been in the past. The rate of economic growth in Ireland has been historically high. We need to make adjustments in that regard, but we need to acknowledge that this rate of economic growth is still consistent with a sustainable economy and is much better than competitor economies are doing, in Europe in particular.

Despite the international climate, the Irish economy is still in relatively good shape. At this time of readjustment we must look at how the economy is structured. Much of the added value of the past 15 years in particular has come from the construction sector. While that has given a short-term impetus, it was never a long-term solution towards wealth creation and sustained growth. Now we must come up with a different make-up to the economy, in terms of supporting indigenous industries, research and development and the provision of the tax relief in the Finance Bill supporting in particular green economic measures which will give a better balance to economic activity into the future.

The Finance Bill covers a number of areas which are to be welcome, after the budget announcements. In introducing any type of improvements in the financial regime sometimes new difficulties are encountered. A number of smaller measures are meant to help the lot of particular sectors in society. For instance, the tax relief for the decommission of fishing vessels helps those whose fishing was based in the open seas, the oceans, but does not offer relief for those involved in draft net fishing in our harbour areas. When we create dichotomies of this type, we must face challenges in dealing with such changes in the future.

There is a provision as regards the capital gains treatment of farming couples whose partnerships are being dissolved. An argument could be made, given the changing nature of Irish society, as to how this might apply to married couples in any line of business within the economy and how it may be addressed in the future. Senator Quinn referred to the need to better recognise the role of philanthropy and how it might be restricted by the overall cap on tax reliefs. To a certain extent, I agree with him. However, even with an improved approach to philanthropy in the future, we should discourage the idea that Irish citizens who do not even pay minimal tax in Ireland believe they can still contribute in terms of philanthropic donations. There has to be a correct mix in terms of the responsibility of being a citizen allied to the ability to recognise philanthropy, and I am not sure if we have attained that particular balance.

The tax system already contains the ability to make charitable donations to bodies that are recognised by the Revenue Commissioners, and there are similar reliefs for trade union membership. There is an anomaly, however, in terms of environmental campaigning that I should like to flag, and have addressed in next year's budget. In view of the charities legislation which is being addressed in the House, organisations dealing with children such as the ISPCC or Barnardos are entitled to tax relief through people making individual donations. Thirty years ago, the then Minister for Finance, Richie Ryan, inserted a provision to allow organisations which deal in human rights to claim such exemptions as well, therefore, bodies such as Amnesty International are covered. However, it is anomalous that organisations such as Greenpeace and Friends of the Earth, which are not involved in any profitable activity whatsoever, are not entitled to the same concessions under the tax system. I will be seeking changes in that regard.

There is a provision in the Agreed Programme for Government that wherever possible the higher rates of VAT on environmental goods and services will be reduced. I should like to see this done as soon as possible, because it will provide a further impetus towards the green economy. I sense there is a reluctance in this regard within the Department of Finance, and there is talk of the EU VAT directive. I am satisfied that the protocol in that directive which refers to reducing VAT rates for social purposes applies to environmental goods and services. It is a road that has been followed by other EU member states and I should like to see this as one of the centrepieces in next year's budget and Finance Bill.

Overall, the Finance Bill ties together a very balanced budget dealing with an adjusting economy that, in European and international terms, is still performing better than most other similar economies. We can be satisfied that the economic management of the country continues to go well and that the economic future, as a result of that management, will proceed in a healthy manner.