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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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(Speaker Continuing)

[Deputy Seán Kyne: Information on Seán Kyne Zoom on Seán Kyne] We need to reward entrepreneurship - people who establish new companies, create employment and take that risk. In respect of having a tax code in place that gives them a three-year corporation tax relief, I welcome the decision to extend that up to the end of 2015.

With regard to section 28, I welcome the extension of the Living City initiative. The expenditure has been limited to €1.6 million for companies and €400,000 for individuals so as to permit the commencement of the scheme as soon as possible. The limits mean that the initiative comes under a less complex EU state rule regulation. This initiative has already attracted attention in Galway from individuals seeking to restore and renovate homes in older parts of the city, and I certainly welcome that.

In respect of agricultural reliefs, I welcome the policy initiated by the Ministers for Finance and Agriculture, Food and the Marine in respect of the agricultural section of the tax regime for farmers. I welcome the initiatives relating to assistance in succession and farm transfer; in section 18, the targeting of agricultural relief from capital acquisitions tax to qualified or full-time farmers or those who wish to lease out land on a long-term basis; in section 44, transfers under the retirement relief and the extension of the eligible letting period of a qualifying asset to 25 years; and for transfers other than to a child under retirement relief, a one-off measure until the end of 2016 deeming conacre or short-term rented land lettings to be eligible. I also welcome section 69, which concerns the extension of stamp duty consanguinity relief to related persons on non-residential transfers to the end of 2017. We know the importance of encouraging land transfer and encouraging young people into farming as our primary industry. We know that next year, with the removal of milk quotas, there will be a significant rush to acquire blocks of land by dairy farmers, and they need to have security and certainty into the future. These initiatives and measures will allow them to secure plots of land on a long-term basis. People will be more willing to lease land long-term because it will be more tax-beneficial for them.

One issue I have concerns about is the definition in the Bill of an active farmer. I would support the cause of the Irish Farmers' Association and its belief that the definition of an active farmer should be amended. It states in the Bill that it relates to people who spend 50% of their time on the farm. There is a lot of off-farm employment, so I would ask that the definition of an active farmer be defined as an individual who is carrying out the trade of farming as set out in the section 655 of the Taxes Consolidation Act. I hope the Minister will look at that in amendments on Committee Stage.

Deputy Paul J. Connaughton: Information on Paul Connaughton Zoom on Paul Connaughton When we talk about the budget that has just been introduced, it is important to understand where we have come from in the past three years. Anyone who came in here in 2011 and saw the figures that were in front of us knows that there were even some people in this House who were looking for sovereign default. The issue of a possible collapse of the euro also arose. It looked as though, if the euro did not collapse, we would certainly be outside it, and if we managed to stay inside the eurozone, there would be a two-tier eurozone, with us in the second tier and the rest of Europe in the first tier. Fast-forward three years and we see a budget that is attempting to give something back. Perhaps we would always like to give an awful lot more back, but one certainly sees the transformation over a three-year period, which must be acknowledged and recognised. It has not been easy. There are very many people out there who over the past number of years and through no fault of their own saw their living standards decimated, with job losses, unemployment and emigration. If nothing else, the budget that was announced two and a half weeks ago must have been okay, because we are not talking about it any more. Two weeks have passed and there is no debate or conversation about the budget we have just had. Obviously, something very positive happened within it.

People often ask me what the budget means for them. They are trying to read through all the commentary. I always say the same thing to them. It is probably not as good as what we on this side say, while it is certainly not as bad as what those on the other side say. The truth probably lies somewhere in the middle. The fact is that this will give a little something back to everybody. If nothing else, it will hopefully create some confidence - confidence that the years of austerity are finally coming to an end. As someone who is relatively new to politics since being elected to Galway County Council in 2009 and to the House in 2011, I felt there was something different about sitting here two weeks ago listening to the details of a budget that did not involve cuts. That was somewhat different for a person who came into the House in this era of politics. We can finally start to talk about a different situation for our country, and it is something that is very welcome.

I would certainly agree with many of the key measures that have already been mentioned by Deputy Kyne. We have set out very clearly where we stand on corporation tax and have moved to allay the fears of other countries and jurisdictions. We still have a huge reliance on foreign direct investment and we need to encourage more of it. Coming from County Galway, like Deputy Kyne, I see the number of multinationals there. We need to make sure they understand the role they play in this country, the role they play in respect of Exchequer figures and the amount of money they contribute, but it is very welcome that we have set out very clearly what we are going to do in that area.

The retention of the 9% VAT rate in the tourism sector is very welcome. It is a very proactive move. I know it is linked to the pension levy, which was a real bugbear for many people. I welcome the fact that the Minister for Finance has moved to remove it over the next two years. I also welcome the reduction in income tax and the USC. I do not think I have ever known a tax that sticks in people's throats like the USC. I understand that it was introduced in an emergency budget in 2008 and that it raises quite a level of income for the Exchequer. However, I would like to see if we could come up with a way, over the next number of years, of improving growth figures while reducing the USC with the intention of removing it. It might be very aspirational but, hopefully, as the country continues to grow, it will happen. We must also be very cognisant of the fact that we still borrow money just to run the country on a daily basis. While we are moving in the right direction, we certainly have a long way to go.

One final issue I would like to address, which was also addressed by Deputy Kyne, concerns the issue of the active farmer. We need to see changes in how that is framed within the Finance Bill. Between 50% and 60% of our farmers are part-time farmers. They need enough farm income to drive up their overall income. We have seen quite a level of investment in infrastructure over the past number of years, so the mantra from now on is "Work smart", not "Work hard". The amount of time farmers need to spend on their farms is not as great as it used to be, but I can assure the House that many of these farmers are as skilled and productive as any full-time farmer, and they should not be discriminated against for that reason. It must be recognised that any farmer out there who is thinking about transferring the farm to his or her son or daughter can still do that. The way it is framed in the Finance Bill needs to change, with amendments on Committee and Report Stages, because the way it is framed now actively discriminates against some young people who want to get into the industry. There is a bright future for agriculture, and the measures announced are very welcome, but let us not put a stumbling block in front of many people who want to help the future of this industry.

Deputy Sean Fleming: Information on Seán Fleming Zoom on Seán Fleming I welcome the opportunity to speak about the Finance Bill 2014. We must look at what the essence of this legislation is. I think we all know that it is to give statutory effect to the provisions announced by the Minister for Finance on budget day. That brings us back to the basic question of whether this is a good or a bad Finance Bill. That can only be judged on the basis of whether the budget announced a couple of weeks ago by the Ministers for Finance and Public Expenditure and Reform was a good or a bad budget, or a fair budget. It certainly failed the test of fairness. In a nutshell, it was a budget for the high earners, and those on lower incomes suffered. There are some people in Ireland who believe that is good. I do not think so.

Are the follow-through pieces of legislation - the Finance Bill and the Social Welfare Bill, which are based on an unfair budget that lacks a social conscience - good or bad Bills? Overall, the Finance Bill is bad legislation, and this House should reject it - and the Social Welfare Bill, when it arrives - because it is the legal implementation of an unfair budget. Many of the fine details in the Finance Bill, which I think is 120 pages long, are very good in their own right. There is a list of them, section by section, covering all the various areas of taxation in Ireland. Many of the individual proposals will not be debated because they are not too controversial and people will be happy enough that some specific measures are going through.


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