Brian Lenihan Jnr (Dublin West, Fianna Fail)

I oppose the recommendation on technical grounds and on grounds of principle, but I welcome the discussion which the recommendation has engendered in the Seanad. I support the spirit of the recommendation.

Technical problems were identified by Senator Norris early in the debate when he said a month is clearly far too short a period for such an exercise. One would need two to three months as a minimum period. An interesting point was raised to the effect that the Dáil will not be in existence at the time of the submission of the amendment. They are technical matters and could be cured with an appropriate amendment.

It is important to understand that what the recommendation proposes is a cost benefit analysis of the 13 tax expenditures or tax reliefs in the Bill. That is the substantive proposal before the House in this recommendation. A total of 13 sections in the Bill involve tax expenditures. As Senators are aware, another finance Bill will have to be passed this year to give effect to the civil partnership legislation and to other measures which have had to be postponed because of the truncated timescale for the Bill.

Given the pressing issues facing the economy and the country, including the possible change of Government and of ministerial personnel, the Department will require much time for tasks other than producing a cost benefit analysis of measures as a matter of statutory obligation. I agree with Senators, however, that the completion of cost benefit analyses or economic impact assessments is required on the majority of tax expenditures before they are introduced.

Only 13 sections involve tax expenditures and the two of greatest importance, which are innovations, are the employment and investment incentive and the energy efficiency measure relief. They are the two major new incentives in cost terms in the Bill. I can meet the spirit of the recommendation by pointing out that an assessment of the employment and investment incentive relief will be completed and published shortly. A similar assessment of the energy efficiency measure relief will be prepared before the section is commenced. The measure is subject to a commencement order. A proper cost benefit analysis of tax expenditures before their introduction is being done in the context of the two major tax reliefs being introduced in the legislation. To that extent the practice to which many Senators referred of insisting on proper cost benefit analysis before the introduction of those measures is being followed.

I discussed section 23 relief, property reliefs and capital allowances on Second Stage yesterday. The need for a statutory requirement was included because it was part of the EU-IMF arrangement. Therefore we had to show good faith in statutory terms that there was an absolute commitment and that the issues involved were so great that they required that kind of analysis underwritten by statute in order that we could, if one likes, postpone our obligations under the agreement. That is the thinking on the measures in the Bill. I hope that is a satisfactory explanation of the terms of the recommendation and the Bill itself.

Senators naturally and properly availed of the subject to peg a wider discussion on tax expenditures and tax reliefs. I wish to make a number of reflections in that regard. First, I agree with the general direction of the debate on all sides. Most Senators expressed concerns that we had not thought through tax reliefs enough in the context of their place in the economic system, that there was not, as Senator Norris said, a sufficient analysis in forecasting terms of what was at stake. Incidentally, I can inform him that my Department had its forecast right on tax receipts for 2010.