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Finance Bill 2014: Second Stage (Resumed) (Continued)

Thursday, 6 November 2014

Dáil Éireann Debate
Vol. 857 No. 1

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(Speaker Continuing)

[Deputy Martin Heydon: Information on Martin Heydon Zoom on Martin Heydon] We do not want to lose the pub from rural Ireland. It has a very important role to play.

In regard to the employment investment incentive scheme, I have spoken to a number of companies and financial advisers who are seeking an extension from three to five years of the minimum holding period. Some are growing industries, such as the Irish whiskey and distilling sector where a long holding period is a necessity. The extension to four years is welcome, even though it was not what the industry was seeking. We need to encourage industries and sectors which are recognised as world leaders and I admire the growth in whiskey distilling. It is a proven export product for which we are recognised and rewarded. It is a major help in our attempt to meet and surpass the food harvest 2020 targets of hitting €12 billion in exports of food and drink products. Irish whiskey has massive growth potential and needs continuous support.

The extension of the home renovation scheme to rental properties whose owners are liable for income tax is welcome and shows the positive nature and impact of the scheme to date. Many landlords are struggling to manage increasing costs and additional charges on top of hefty mortgages, therefore improvements to properties are down the lists of priorities. However, given the shortage of quality and suitable accommodation we need to incentivise landlords where possible to keep rental properties to an appropriate standard. I hope the officials and Minister will take on board the points of concern I raised today. I commend the Bill to the House.

Deputy Michael Creed: Information on Michael Creed Zoom on Michael Creed I welcome the opportunity to say a few words on the Finance Bill and the budget, as outlined by the Ministers, Deputies Michael Noonan and Brendan Howlin. I share some of the observations made by Deputy Billy Kelleher in the context of demystifying the budgetary process. We are still somewhat archaic in that regard. A lot of consultation takes place in committees with various interest groups which make submissions, etc. The Executive guards jealously its responsibility for the budget without sufficient engagement with all parties. To have the kind of engagement for which we would all yearn, where we would leave our political caps outside the Chamber and work collectively and share the distilled wisdom of all parties, calls for a fundamental honesty of approach. I say this in the context of some previous contributions I heard.

There are so many black holes in the budgetary proposals of other political parties that this Chamber would be engulfed in darkness. We often have the dialogue of the deaf here, where people come in and submit their scripts without ever listening to the points made by the other side. Scripts would be illegible because of the darkness. We might as well hand our contributions to the editor of debates and close the Chamber because nobody seems to be interested in what anybody else has to say. The poverty of the Chamber is its unwillingness to take on board constructive proposals because they might come from Deputy Seán Ó Fearghaíl or, God forbid, Deputy Mary Lou McDonald if she was here for the debate. We on this side do not have a monopoly of wisdom and neither does the Opposition. God knows, we know it did not have it in the critical years which landed us in the mess we are in. It is something on which we have to work harder so that we can harness the collective wisdom of all Deputies.

Deputy Róisín Shortall has left the Chamber and it is not in my nature to attack somebody who is not here, but it struck me forcibly that despite all her criticisms she was in government when critical decisions were made. She blindly ignored the context in which difficult decisions were made. Of course many reports criticise all of the things which have happened to Irish society in the past seven or eight years, such as child poverty and homelessness. Deputy Billy Kelleher also referred to homelessness and, I understand, waiting lists for speech and language therapy. In the heyday of the boom we had waiting lists and people sleeping homeless 150 yards from where I speak. We need to work harder and smarter, and get more for the taxpayers' money we spend.

The Taoiseach gave hostages to fortune in quoting the objective of reducing the top rate of tax. It was but one of many objectives. In the same breath, Deputy Róisín Shortall went on to speak about the working poor. It must be remembered that people hit the top rate of tax at below the average industrial wage. There are hundreds of thousands of people who are the working poor and who would benefit from the reduction in the top rate of income tax. We need to have some context about where the country is at. We continue to spend more than we earn on a daily basis. We are borrowing money, though we will meet the objectives in terms of reducing our deficit, to run the day-to-day business of the country. We are not borrowing money for investment purposes.

Deputy Richard Boyd Barrett is in the Chamber. He usually calls for the introduction of a wealth or financial transaction tax. It is interesting that the 11 member states involved in enhanced co-operation in Europe have decided to plough on unilaterally and try to develop a financial transaction tax. We have a 1% stamp duty tax on transactions here. The 11 member states are proposing a financial transaction tax of 0.1%, and one of the 11 has walked away from the table.

We have to be honest about the debate we are having. We have choices. We need to realise we have succeeded in turning around the ship of State. We are creating more jobs. We have an awful lot more to do, but we have succeeded because we are flexible in the way in which we have been able to change. We do not need to disadvantage ourselves. We need employment opportunities and we need to attract multinationals. Such investment is very mobile and goes to Singapore, Dublin, Cork or anywhere else on the globe.

We need to address things at a multinational level in terms of taxation, and the double Irish is a welcome step in that regard. We need to be box clever. We do not need to disadvantage ourselves on the altar of competing bids on the Opposition benches about how we could raise more money. It is not as easy as they suspect. I do not want to be personal about Deputy Richard Boyd Barrett, but the financial transaction tax is the one area where the hypocrisy of there being easy solutions, if only we were willing to engage with them, is clearly exposed.

I want to raise one specific issue in regard to taxation which I have never quite understood. It is appropriate that the USC rate of 10% was increased to 11% for self-employed people earning more than €100,000. Why is it exclusively the self-employed who pay the higher rate? A significant number of people, many of whom are mentioned in this Chamber on a regular basis, are employees, employers or work in the public service and earn figures in excess of that. Why are their earnings ring-fenced from the higher rate of USC? The self-employed, who are also creating jobs for others, are asked to pay a higher rate. A significant amount of money is involved, on which we should not turn our backs. I would like to know why only self-employed people are affected. The Minister of State might explain the situation.

Deputy Róisín Shortall also referred to the Department of Education and Skills. She was a Minister of State when the decision was made to have a rolling reduction of 1% in the capitation grant for a number of years. She also failed to acknowledge that the Department's budget has increased for the first time. That is because a significant demographic bulge has to be accommodated in new schools, etc. Most of the investment is going into built infrastructure to deliver for children in classrooms rather than into salaries or wages for staff in the Department or teachers or higher capitation rates.

Deputy Micheál Martin referred to a number of points, one of which was agri-taxation. In the past 12 months we have deliberated on the best way to use or refocus whatever resources are available. Significant additional costs are not envisaged, but we need to discuss how it might be best focused to take account of the current situation regarding agriculture. A significant player in agriculture in terms of targets for harvest 2020 are part-time farmers. It would be wrong to send a signal that we value their contribution, their animals and the crops they send to the marketplace and the employment they provide less than the person who is in the fortunate position to be able to work full-time on a farm.

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