THE Finance Bill will enable the Government to reward work, safeguard jobs, reduce business tax and stimulate enterprise, the Minister for Finance, Mr Quinn, told the Dail yesterday.

The Bill, which has 127 sections, gives effect to the Budget, introduced earlier this year. Mr Quinn said it contained the "single biggest set of personal and Corporation Tax reductions in the past 20 years". He said the Bill would secure a "substantial increase in after-tax income for the taxpaying public".

However, the Fianna Fail finance spokesman, Mr Charlie McCreery, called the Government "spending junkies", accused the Minister of "loose political morals" but offered the Labour Party a new coalition pact based on their 1992 agreement.

The Progressive Democrats' finance spokesman Mr Michael McDowell accused the Labour Party of doing whatever it cost to stay in power and said the rainbow coalition had achieved nothing because it had no specific targets.

During the Dail debate which continued late last night and concludes tonight, Mr Quinn said the legislation "closes off a series of tax loopholes both in indirect and direct tax areas". It also contained a package of measures to further combat illegal tobacco sales, thus cutting off a revenue source for many criminal gangs, he said.

Among the tax loopholes closed off was the relief for scholarship income as a means by which companies could provide tax-free income to directors under the guise of scholarship schemes for their children. The Bill also includes changes in VAT codes in property and telecommunications, which the Minister said were aimed at "combating avoidance and, protecting Exchequer resources

Among the measures included were tax relief for third-level fees for undergraduates and for some part-time third-level courses by non-earning spouses. Tax relief will also be available for donations of £1,000 or more to publicly-funded third-level institutions.

The Bill also gives effect to the controversial 9 per cent stamp duty measures on property valued above £150,000. The Bill also confirms exemption from VAT for commercial child-minding.

Section 35 investment relief on films will increase from £7.5 million to £15 million where at least 50 per cent of the investment is made by corporate bodies. An additional 10 per cent finance is offered for films where post-production is carried out in the State.

The standard rate of Corporation Tax is reduced from 38 per cent to 36 per cent and tax on the first £50,000 is reduced from 30 per cent to 28 per cent.

A new tax relief is offered in company restructuring on certain lump sums to an overall total of £10,000 to compensate for substantial pay restructuring.

Mr McCreevy sharply criticised the Finance bill and said the Government parties were yielding to pressure groups in a bid to "spend their way back into Government".

He reminded the Minister of the Fianna Fail/Labour government's pact in 1993 to "broaden the standard tax band, so that as in other countries, only relatively high,, earners pay the higher rate of tax

He said he would make the Minister an "open offer" of a "new Coalition pact with Fianna Fail on exactly the same terms as those agreed in late 1992".

The Book of Estimates showed that net spending was up by 6.5 per cent this year, more than three times the rate of inflation, he said. The Minister's past radicalism had gone as well as his "capacity to take tough decisions" Mr McCreevy said.

Spending by the Department of Foreign Affairs had risen from £40 million to £60 million and Arts, Culture and the Gaeltacht spending had risen from £48 million to £128 million. Departments run by Fine Gael had not fared as well, he said, and he accused the Minister of "loose political morals - hopping out of one coalition bed and into another, without so much as a backward glance".

On water charges, Mr McCreevy said the system was about to collapse because of the level of arrears and because of legal challenges. Fianna Fail disagreed with the Progressive Democrats in that his party recognised that the structure of water charges had become riddled with doubts hard cases, evasion and patchy returns.

Mr McDowell said water charges would be law within the next three to five years because of EU directives. It had to be paid for and the only question was how.

Criticising the Government he said that when it was formed no specific targets were set and nothing was achieved. When the next government came into office, "reality is going to reassert itself, in relation to public spending, public sector pay. What this country needs is a government of parties committed to radical tax reform".

Mr McDowell said the Department of Finance was anti-employment because it forced ordinary workers to pay 55p tax in the pound. Marginal rates of tax had to be lowered, he said, and the average industrial worker should not have to pay more than 20 per cent income tax. "We should be going for a 20 per cent and 40 per cent tax regime and there is no reason to have a higher basis or top rate of tax than in Britain."

He called for the standardisation of all allowances and said that this would raise £600 million for the Exchequer. A family allowance should be introduced instead of a marriage allowance. If it was introduced over a period of time it would be far more equitable.

Mr McDowell warned that it was not in Ireland's strategic interests to have tax harmonisation with Europe. The State should have tax autonomy and discretion in how it raised its taxes.