John Gilroy (Labour) | Oireachtas source

I welcome the measures proposed in the Finance Bill. Having suffered eight austerity budgets the time has come when the Government feels that public finances are such that people can be given a bit of a break. While most of the measures in the budget are very modest they put money back in people's pockets, which is welcome.

We understand it is the Opposition's role and function to oppose measures. Today, the Opposition has struggled, in great measure, to criticise the Bill. It has been noted by Senator Darragh O'Brien, and Sinn Féin in the media, that this Bill is non-progressive in its provisions but let us examine the matter. Someone who earns €20,000 a year, when we include all income-related taxes, will pay in the region of €500 per year in taxation. Someone who earns €65,000 a year will pay €26,000 in income-related taxes. Despite a person on €65,000 a year earning two and half times that of a person on €20,000 a year, the former will pay considerably more in terms of taxation. That can only be described by a reasonable person as progressive. Senator Michael D'Arcy developed the same point in his contribution. Despite Senator Darragh O'Brien saying one can interpret figures any way one wants, the use of percentages will produce one figure and the use of monetary terms will produce another figure.

I have one concern about the Finance Bill which my colleague, Senator Hayden, raised earlier. I refer to section 81 which deals with gifts to children. The mischief that the Bill attempts to address relates to people who are very high earners who want to gift enormously valuable gifts, monetary or otherwise, to their families. That is an undoubted abuse of the capital acquisitions tax system but the attempt to redress this obvious mischief has gone a little too far. I believe the section is flawed because it has been based on self-assessment which is, in itself, meaningless. As Senator Hayden has said, it will require our children to keep a balance sheet of life to be cashed in at the end of their parents' lives which is an unreasonable and unworkable option. The thresholds are extremely low at €225,000 for a lifetime exemption on inheritance and gifts.

Exemptions are also narrow. For example, somebody over 26 years does not fit the exemptions outlined in the Bill. The policy measure in the Bill is at variance with policy measures in other areas. For example, the Government is attempting to encourage as many people as possible to undertake fourth and fifth education which mostly takes place after the age of 26. Section 81 of the Finance Bill specifically excludes people over 26 years from benefiting from exemptions. I suggest that the Minister of State discusses this matter with his senior Minister ahead of Committee Stage. There are real difficulties in supporting this measure and we need to revisit the matter. At a minimum, we should increase the thresholds. It is unreasonable that a person who can give their children gifts of €100,000 per year will be put in the same category as a middle income earner which the Minister has identified as someone who earns less than €70,000 a year. We need to take a fundamental look at this provision. The thresholds announced in the proposal is one issue, its workability is another and the level of exemptions is the third issue.

I look forward to hearing the Minister's response to this matter on Committee Stage. There is no doubt that we will pursue it further at that time.