THE SEANAD will begin a two-day debate on the Finance Bill this morning following the approval of the measure by the Dáil.
The Government had a majority of five on the final stage of the Bill which was passed by the Dáil yesterday afternoon by 81 votes to 76.
Arrangements have been made for the Dáil to meet again tomorrow at 8pm if the Seanad recommends changes which require the Bill to be amended.
During yesterday’s debate, Minister for Finance Brian Lenihan said he was pleased to hear new Fianna Fáil leader Micheál Martin make the point that the country’s expenditure base was too high and the revenue base too low.
Addressing Labour Party finance spokeswoman Joan Burton, the Minister said: “I am sure Deputy Burton recalls I made that point the centrepiece of my budget statement in October 2008. We in Fianna Fáil have all been practising in sackcloth and ashes for some time.”
Mr Lenihan said many worthy sentiments had been expressed from all sides in the debate on the Bill and he said that job creation was a very important issue.
“The Budget contained numerous job creation incentives. Quite apart from the need to ensure economic stability, the Bill provides for the employment and investment incentive scheme and reliefs for energy efficiency works, as well as an extension of the film relief, which has generated an amount of activity.”
Responding to a Labour amendment calling for a cost-benefit analysis of the Bill, Mr Lenihan pointed out that the Finance Bill will have to be passed before April 1st to give effect to the Civil Partnership Act and possibly to other measures which have had to be postponed because of the truncated timescale for this Bill.
“Given the pressing issues facing the economy and the country, including the possible change of government and of ministerial personnel, it would not be a good use of the department’s time to produce a cost-benefit analysis of measures in this Bill at the same time as it prepares for a new Finance Bill and, very possibly although not necessarily, for a new political regime with different policy requirements from those of the current Government.”
He did agree with Ms Burton that the completion of cost-benefit analysis was warranted in the majority of tax expenditures before they were introduced.
In reply to Labour TD Michael D Higgins, who referred to the distinction between tax evasion and tax avoidance, Mr Lenihan said: “I do not think his comparison to the contrast between mortal and venial sin is quite accurate. In terms of the theology of that era, I would prefer to say it is the distinction between the natural and the artificial method.”
Arguing in favour of a cost-benefit analysis of tax incentives Ms Burton said a simple explanation that set out the costs and benefits of such schemes was necessary so those on large incomes did not get to avoid tax. She said some people on incomes of over €2 million a year were paying no more than about 19 per cent in tax by availing of the tax relief schemes.
Fine Gael finance spokesman Michael Noonan argued in favour of abolishing the travel tax, but he said this should only be done if there was a quid pro quo offered by Ryanair, Aer Lingus and other carriers.
“The quid pro quo is to give them what they are looking for if they commit, over a period of time, to bring a certain number of passengers into the country. If they do not achieve the target, we can put the travel tax back on in two years’ time,” he said.