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

Wednesday, 5 November 2014

Dáil Éireann Debate
Vol. 856 No. 2

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  11 o’clock

(Speaker Continuing)

[Deputy Pearse Doherty: Information on Pearse Doherty Zoom on Pearse Doherty] How would the Minister fund that? If it were to come out of additional spending, it would bring us over the deficit target. First of all, the €300 million is not €300 million, because if the Government scrapped water charges there would be no need for its tax relief off-setting water charges and no need for the household package to assist families who simply cannot pay, so the figure comes down to below €200 million in the first instance. If the Minister did not reduce income taxes from 41% to 40%, he could cope with today with no scaremongering about income tax going up by 4% and taking child benefit from vulnerable families and children. There would be none of that nonsense that this desperate Government is trying to peddle.

That is not the Minister's only option. He has other options for finding that €200 million within the scope of other budgetary proposals, and we have suggested a number of them to him. However, he has decided not to do this. SARP is an absolute tax benefit to a handful of individuals. Let us be clear about this. A total of 12 individuals benefited from the scheme in 2012, while 31 benefited in 2013. It is a handful of individuals who an earn an unlimited amount of money, and their income will be reduced by 30% for tax purposes, giving them not thousands but tens of thousands of euro in write-downs, because they come here and the Minister thinks they are special. He believes that this will cost another €1 million. There is no limit on the type of money that the Government can throw at this handful of individuals. A person can claim for their or their children's educational fees and their flights to and from their home countries. Since they were not happy with €500,000, if people earn €1 million in this State, they can have that figure less €75,000. They can have 30% of that taken away from the tax man when they are calculating their tax. It is an absolute disgrace. At the same time and in the same breath, the Government tells families who simply do not have any money left at the end of the week that they must tighten their belts and pay up for the sins of others in the past through water charges, the property tax, prescription charges and a range of other charges.

The Minister needs to stop the scaremongering on this and get down to fair ways of funding water services. There are other ways of doing it which should be examined in respect of keeping Irish Water off the national accounts. In respect of questions that we have put to the Minister - I have submitted another one and I hope the Minister and his officials will be transparent with the figures - I have looked at every single question that has been asked by every Deputy in this House about the cost of Irish Water, and it is clear as mud. This Government is unwilling to give clear figures in tabular form in respect of the costs associated with Irish Water, the sources of income, the sources of expenditure and the categorisation of that expenditure. I will try once more. I have submitted a parliamentary question and I hope the Minister will ensure that his Department officials and the Government provide that information in a fair and transparent way.

What is telling after three years of stagnation and recession is that when the Government found some leeway, its instinct was to cut income taxes - income taxes for the highest earners. Its instinct was not to scrap the tax on the family home or to restore the respite care grant or funding to the National Disability Authority. Its instinct was to give it in a way that exponentially favours those who earn more. That is clear from the figures that are there. People in this House who earn, at a minimum, over €80,000 - I am not including staff - will get multiples of what someone on the minimum wage earns in this tax relief. Ministers and the Taoiseach earn far more than elected Members. Perhaps people in this House are under pressure - perhaps they over-borrowed or stretched themselves too far - but we are not the most needy in society. The people who must go to the Society of St. Vincent de Paul to ask for food to put on their table, who struggle to put clothes on their kids when they return to school or who are worried about what will happen in the next six weeks as they start to prepare for Christmas are the people who should be getting the tax breaks in this budget. But no, the Government has decided to provide the most benefit for the wealthiest in society.

I welcome changes to USC levels and thresholds in the Finance Bill. Sinn Féin would have gone further and removed all those earning the minimum wage from the USC tax net, but I welcome the fact that this is the second time the Government has done this. We will continue to pursue this issue and hopefully, through our persistence, the Government will continue to take those earning below the minimum wage out of the USC tax net.

It is in its income tax policy that the views and priorities of Government are most visible. A progressive tax system is how a modern state redistributes wealth. The budget and this Bill do not redistribute. They make sure that less is transferred from those who have it to those who need more.

There are a number of measures in the Finance Bill that I welcome and will support. I want to recognise that there are some positive moves, such as the extension of the tax relief for farmers. However, the farming community has brought to my attention its belief that the definition of "active farmer" is inappropriate, and I hope the Government really listens to this. The arbitrary figure of 50% of farm working time does not represent the real world and will hit small farmers harder. I fully agree with the principle that we need to make sure this is targeted at active farmers and that active farmers are prioritised, but the definition needs to be amended if we are to do what it says and genuinely ensure that those who are farming are able to keep their heads above water. The application of this definition for capital acquisitions tax purposes will have a massive impact on farmers, particularly smaller farmers and those in areas with poor land. I come from west Donegal and those are the types of farmer who live there. If this Bill is not amended, many farmers with hopes of transferring their land to family members will have those hopes dashed. This is the last thing that rural communities need. In respect of such holdings, if a person can get a job off-farm, they will take it. It involves small holdings and farms and bad land. If they can get it, people work 20, 30 or possibly 40 hours per week. The definition in this Bill means that they would have to be working 40 hours on the farm as well to be able to avail of this, which is simply not acceptable, so I hope that the Government looks at this and at the definition of active farming. I understand what it is trying to do here, but I think it will have a consequence, hopefully unintended, of penalising small farmers on poor land in particular.

I welcome the move towards taking a more proactive approach to the domicile levy. In 2012, only six people paid this levy. It is an absolute disgrace. There is certainly a pattern under the Government of placing a higher priority on chasing lower entrants than on chasing higher earners who do not pay what is due. Look at the property tax. The Government allowed the Revenue Commissioners to chase people who had not paid. We hear from the Revenue Commissioners that they are pursuing through the courts 500 people who did not pay, could not pay or refused to pay the property tax. Years later, in the Finance Bill, we are now finally allowing the Revenue Commissioners to send a letter to people they think should be paying the domicile levy. Let us remember who is eligible for the domicile levy. It is people with worldwide incomes above €1 million who have properties in this State worth in excess of €5 million and who have paid less than €200,000 in income tax. The Revenue Commissioners believe that there are people are out there who are not paying it, but years later, a provision to allow the Revenue Commissioners to pursue them is finally included in the Finance Bill, with penalties ensuing. I suggest that we might need to look at the definitions as well. These definitions were raised in 2012, and perhaps we need to reduce the definitions to capture more individuals in respect of the domicile levy. Perhaps new figures exist from 2012, but they are the only figures that are on the record.

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