Jim Walsh (Fianna Fail)

I concur with much of what has been said by Senator Cassidy on this matter. It is an interesting proposition but doing a cost benefit analysis subsequent to the introduction of the schemes does not appear to be the most logical approach. I assume that when these schemes are being introduced they are analysed and evaluated prior to being set up. What is required is an economic analysis in addition to an analysis of its effect on property price increases, given our experience.

Section 23 reliefs have been in place for approximately 30 years but one of the schemes that was introduced, I believe by Deputy Enda Kenny when he was Minister for Tourism and Trade, was the seaside resort scheme. That had the effect of bringing about an immediate regeneration of seaside resorts but it succeeded also in increasing the price of residential property in those areas by approximately 75%. There was a huge increase because of the tax breaks, and that is the kind of approach that must be considered and planned in advance.

As Senator Cassidy said, there has been tremendous economic benefit from the hotel schemes, the urban renewal schemes and even the business expansion schemes but a cap should have been put on the number of units that could have been built under them. That has led to a huge escalation in prices but underlying this recommendation, and on the comment by Senator Alex White along the lines that we needed to extract more taxes from the people who are working, and he identified the lack of tax revenues as being the source of the problem, that is an ill-advised evaluation of where we are now.

Most economic analysts and people with accounting backgrounds would say that our public expenditure is too high. The Labour Party wants to bridge that deficit gap by roughly taking 50% from an increase in taxes and 50% by way of public expenditure savings. The Minister has outlined that two thirds should be from a reduction in public expenditure and one third from an increase in taxes. That is a fundamental issue that must be debated. It goes to the core of the way we will handle our fiscal deficit but it also goes to the core of the way our economy will get back on the road to growth. Does the Minister feel as I do about this matter? I have examined some of these taxation increases. The universal social charge, which will be debated later, is 7% but if we take the fact that people will pay tax on that, it is the equivalent of a 12.73% reduction in gross pay.

I would have thought we have now gone to the limits of what we can do vis-À-vis taxation increases. I realise it is essential to bridge the gap I referred to, and it is the quickest way of reducing the deficit, but there must be increased emphasis on bringing back public expenditure to sustainable levels for the future. That should be the key element of the debate in the coming weeks. Will the Minister concur with the view that there is very little, if any, scope for further tax increases on the public and that it is a matter of achieving greater efficiencies and savings within our public expenditure as the primary target as we move forward?