Houses of the Oireachtas

All parliamentary debates are now being published on our new website. The publication of debates on this website will cease in December 2018.

Go to oireachtas.ie

Budget Statement 2013 (Continued)

Wednesday, 5 December 2012

Dáil Éireann Debate
Vol. 785 No. 2

First Page Previous Page Page of 72 Next Page Last Page

(Speaker Continuing)

[Deputy Michael Noonan: Information on Michael Noonan Zoom on Michael Noonan] The newly constituted local enterprise offices will serve as an important first stop for small businesses looking for advice and information on all available State supports. All of these measures are designed to create additional jobs in small and medium enterprises.

Agrifood Industry

  The thousands of farms throughout the country are small and medium enterprises. Farming and the agrifood sector are critically important to our economy and both continue to perform strongly despite the difficult summer weather. Following on from last year’s budget, which supported farm expansion and the transfer of land, I have included measures in the ten-point tax reform plan that will assist the farming sector. I am extending the general 25% rate and the special 100% rate of stock relief, which were due to expire on 31 December 2012, for a further three years to 2015.

Deputy James Bannon: Information on James Bannon Zoom on James Bannon Hear, hear.

Deputy Finian McGrath: Information on Finian McGrath Zoom on Finian McGrath Deputy Bannon is happy anyway.

Deputy Michael Noonan: Information on Michael Noonan Zoom on Michael Noonan I am widening the definition of registered farm partnerships to add other production partnerships, such as beef, to the 640 milk production partnerships that can already avail of the enhanced 50% rate of stock relief. Qualifying young trained farmers in such partnerships can continue to avail of the 100% rate of stock relief. Furthermore, as small businesses, many of the other reforms in the ten-point tax reform plan will benefit farming and the agrifood sectors.

  In order to improve farm efficiency and help achieve the targets in Food Harvest 2020, I am introducing a relief from capital gains tax arising on disposals of farm land for farm restructuring purposes. This is a once-off relief which will apply in respect of transactions initiated in the period from the start of January 2013 to end-December 2015, subject to obtaining EU state aid approval. These measures are designed to create additional jobs in farming and the agrifood sectors.

Film Industry

  This year, my Department carried out an economic impact assessment of the current film tax relief scheme, widely known as section 481. In light of the report’s findings, which I have published today, and after consultation with the relevant Minister, Deputy Deenihan, and representatives of the film and TV industry in Ireland, I propose to extend the film tax relief scheme to 2020; reform the operation of the scheme by moving to a tax credit model in 2016 so as to ensure better value for taxpayers' money and eliminate the need for high income investors to provide the funding for the scheme; and enhance the scheme so as to make Ireland even more attractive for foreign film and TV productions. These changes will rectify the anomaly by which investors received a disproportionate amount of the tax relief as opposed to the funds going to production. These measures are designed to create additional jobs in the film industry.

Tourism Industry

  The year 2013 is very important for the tourism industry. Promotion of The Gathering has been under way for some time and reports indicate that it is striking a chord both at home and abroad. It is an initiative that we should all support. Due to the nature of the tourism sector, the supports I have announced already to assist the small and medium enterprise sector will apply to most of the businesses in the tourism industry. In addition, the tourism industry is already benefiting from the second reduced rate of VAT of 9% that I introduced in the jobs initiative in May 2011. I confirm that the VAT rate of the tourism industry will continue at 9% in 2013.

Property

  In last year’s budget, I introduced certain measures to help stabilise the property market, which was one of the major constraints on economic growth. This year has seen the first signs of stability in both the residential and commercial property markets in six years. The residential market is showing increased activity due to the return of economic growth and the impact of the enhanced mortgage interest relief I introduced last year. This measure will end on 31 December this year as I have set out on numerous occasions. However, in order to maintain momentum in the domestic property market, I am providing an exemption from the new local property tax up to the end of 2016 for any new or previously unoccupied homes bought in that period and, in addition, purchases of any homes in 2013 by first-time buyers will also be exempt for the same period. This exemption for three years from the local property tax will also apply to residences in unfinished estates.

Deputy Mattie McGrath: Information on Mattie McGrath Zoom on Mattie McGrath Big Phil is not even here.

Deputy Michael Noonan: Information on Michael Noonan Zoom on Michael Noonan In the commercial market, the capital gains tax incentive that I announced in last year’s budget means that any property bought between now and the end of 2013 will be relieved from capital gains tax if held for at least seven years. I am fully aware that regeneration is necessary in a number of our cities in order to ensure a balanced economic recovery. To date regeneration schemes have failed to encourage private sector investment in the areas most in need so I will examine proposals for a targeted incentive in already identified regeneration areas.

Commercial Property and Real Estate Investment Trusts (REITS)

  Initial indications are that the reduction last year of stamp duty from 6% to 2% for commercial property transactions has also helped bring stability to the commercial property sector. Demand for high-quality large office spaces has strengthened in 2012. In order to attract new investment, I will provide for the establishment of real estate investment trusts, REITs, which allow for investors to finance property investment in a risk diversified manner.

NAMA

  The introduction of REITs may also assist NAMA in deleveraging its portfolio and allow it to bring more sustainable activity to both the commercial and residential property markets. NAMA is already making €2 billion of funding available over the next four years to complete residential and commercial projects in Ireland. This investment, which is already under way, with some €650 million of advances already approved, is expected to create significant employment in the region of 25,000 jobs in the construction sector and additional jobs in the wider economy. NAMA is also making €2 billion of vendor finance available to prospective purchasers of commercial properties over the same period. These property measures are also designed to create additional jobs in the property and construction sectors.

International Aviation Services

  The task forces established to consider what was needed to effect independence for Shannon Airport concluded that there is potential for significant job creation in the aviation sector in Ireland. To facilitate the sector, I will be putting in place measures to facilitate the construction of hangers and ancillary facilities that will be key to attracting additional aviation sector organisations to the country. My Department will also examine, together with the Department of Transport, Tourism and Sport and the Department of Jobs, Enterprise and Innovation, the feasibility of new funding sources for airlines and aircraft financing and leasing companies. Further details should become available shortly. Whereas these measures were proposed by the task forces for the new International Services Centre in Shannon, I am making the measures available to all other airports who wish also to avail of these measures.

Public Finances

  Based on the latest information, including the November tax receipts, my Department now projects that the general Government deficit for this year will be 8.2%, comfortably inside the required target of 8.6% under the excessive deficit procedure. The projected deficits for 2013 to 2015 are 7.5%, 5.1% and 2.9%, respectively, all in line with the targets we have to achieve. These deficit projections are based on projected economic growth for GDP in 2013 of 1.5%, rising to 2.5% in 2014 and 2.9% in 2015, as published in the medium term fiscal statement three weeks ago. Total voted and non-voted expenditure will be €69 billion in 2013 and €54.5 billion of this consists of voted public expenditure, as well as expenditure funded by the social insurance fund and the national training fund. The Minister for Public Expenditure and Reform, Deputy Howlin, will present his expenditure report immediately after my statement. The budget and expenditure report includes the €3.5 billion budgetary consolidation required in 2013 to achieve the deficit target. Projected consolidation for 2014 and 2015 of €3.1 billion and €2 billion respectively is unchanged from the figures specified in the medium term fiscal statement, both regarding volume and the split between revenue and expenditure.

  The Irish financial crisis could be summarised in the word "debt", consisting of both national debt and personal debt. The Government is committed to dealing with both. Continuing to borrow large amounts to fund our day to day services is simply not sustainable. The reality is that stable public finances are an essential prerequisite to long-term economic growth and job creation. We will only be able to successfully access the markets in the long term if the markets believe we have a credible fiscal strategy and agree that our debt is sustainable.


Last Updated: 06/05/2020 17:49:16 First Page Previous Page Page of 72 Next Page Last Page