Feargal Quinn (Independent)

I was impressed by Senator Jim Walsh, who spoke from the heart about his concerns that if we do not manage to get our economy right we will implode. There is little doubt that to achieve this we must be competitive. We have not been competitive; we really lost the run of ourselves in recent years. I have told the story before of going to Dundalk and meeting two butchers who were losing their jobs. I said to them that they would probably have to travel to Newry to get jobs, but they said "No - in Newry they pay one third of what we earn here." That is the sort of difference that existed. We have to do something about jobs, and the way we will do this is by incentivising job creation through tax measures. That is a delicate plant.

Senator D'Arcy impressed me with his comments about how the former Minister for Finance, Mr. Charlie McCreevy, reduced capital gains tax from 40% to 20% and took in more as a result. A better example is his reduction of the betting tax, for which I was here at the time. The tax was reduced from 20% to 10%, and the Opposition howled and accused the Minister, who came from County Kildare, of helping his friends in the horse racing business. He came back in a year later and said that he had taken in far more money at 10% than at 20%, so he was reducing it to 5%. He came in again the following year and said he had taken more at 5% than he had at 10%. The reason I am taking pains to explain this is to demonstrate that adjusting tax rates is a delicate operation. He could not keep reducing the tax to 0% and hope he would take in more. However, there is little doubt among those of us who have been in trade, especially the grocery trade, that when one reduces prices one can sometimes make more money. It is delicate and must be done cleverly. The reduction in the travel tax must be promoted, because if people abroad are not aware of it, it will have no effect.

I know we are not discussing the minimum wage at this point, but it seems to me that there are a certain number of jobs that do not exist at a certain rate. Because of this, I am not a believer in a minimum wage. An example of this is the state of Colorado in the US, which reduced the minimum wage because it is linked with inflation - it did not have a choice, as it is set up that way. There are opportunities to reduce tax and take in more money on that basis. What the Government is doing on this occasion deserves support, although I do not quite understand why it has selected some products rather than others - Senator Byrne touched on this. I am also not sure why newspapers and hairdressing are included while other good and services are not. This is not a Bill whose aim is to be fair; its aim is to try to create more jobs. It is going in that direction and it deserves support, particularly the provision we are discussing now.