Sean Barrett (Independent) | Oireachtas source

I welcome the Minister.

Leaving the bailout on Sunday is a momentous occasion. I suppose our concern is to ensure we do not return to the bad old days and let the previous operation of the Irish economy return to haunt us.

As the Minister of State plots the future, his Department needs to look at financial regulation. In recent times, we have had discussions on the regulation of accountants, which is under the remit of the Department of Jobs, Enterprise and Innovation, and the regulation of pension funds, which comes under the Department of Social Protection. These are financial services and when they are not operating efficiently they undermine the prospects of recovery. That obviously refers to banks and insurance companies, as well as credit unions which have joined that list. A traditional function of the Department of Finance - regulating the financial sector - is necessary as we try to recover. I favour strict loan-to-value ratios and strict loan-to-income criteria because we want a banking system that is ready and fit for purpose as the Government tries to plot the recovery following the bailout as and from next Sunday.

I worry about the amount of material in the Bill that is from the world of tax lawyers, tax accountants, lobbyists, etc. As we move forward into the new scenario, I favour simple low rates of tax with no deductions and no allowances across the board.

Particularly in light of our discussion on the Water Services (No. 2) Bill 2013 last night, it is necessary to reassert the old role of the Department of Finance in project appraisal - the examination of whether investments are worthwhile. Left to themselves, spending Departments will go on spending sprees. The restraining hand of the Minister is needed. There is a need for stricter regulation of accountants and pension funds, which are referred to in the Bill.

I thank the Minister of State for his broad assessment of the economy. On our constructive dialogue with the fiscal advisory council, to which Senator Hayden referred, the members of which came before the Joint Committee on Finance, Public Expenditure and Reform last week, that seems to be working well. As the troika leaves, there is another independent source of advice and dialogue between the Minister and his officials.

I note there is a new strategy being prepared as we try to find a way forward without returning to the era of mistakes, which to my mind means we must avoid relying on the construction sector or property subsidies in the future. They did get us into trouble. I note Senator Hayden would let them off the hook more lightly than I would, but the damage caused by that type of economics was serious.

The research and development subsidy was mentioned. I have an OECD report from October 2013 which states that governments should ensure that research and development tax incentive policies provide value for money. There is much kick-and-hope in a great deal of what we invest in research and development, and I hope that when we discuss the Bill on Committee Stage there will be evidence. In a recent report from the United States, one of the headlines is that the US Congress should not extend or make permanent the research credit without making reforms. One hears about groupthink and herd instinct, which got us into trouble in previous times. Let us hope that an uncritical belief in research and development does not add to that.