As reported in today’s Irish Times, the government yesterday finally agreed to accept a Labour proposal that all tax breaks contained in the Finance Bill should be subject to a rigorous cost-benefit analysis.

“This is a simple, common-sense proposal, and I can’t see why the government would have been opposed to it in the first place”, said Deputy Burton.

There has been a tendency in the past decade for successive Ministers for Finance to announce and implement tax incentives, as with car parks or hotels, without any idea about how much they will cost in terms of tax revenue foregone or their broader economic impact despite repeated promises from the Minister for Finance and his predecessors.

The latest figures we have for property related tax reliefs is €435m, and even now the Minister is not able to calculate the massive legacy costs involved. The hotel tax incentives are a prime example of developer-led tax breaks which backfired catastrophically.

We now have zombie hotels all over the country which were built by investors purely to avail of tax breaks. Unbalanced tax breaks for private hospitals are also contributing to difficulties in that sector, and we could be looking forward to a future of private ‘zombie hospitals’.

In the report stage of this year’s Finance Bill I tabled a common-sense amendment which would oblige the Minister to prepare a cost-benefit analysis for all tax breaks provided for in this year’s Finance Bill, setting out the costs of tax foregone, and the benefits in terms of job creation or otherwise and any legacy costs.

This should be happening as a matter of course. .