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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 Denis Naughten: Information on Denis Naughten Zoom on Denis Naughten] One of them has an eight year old car, while the other has a ten year old car. They need their cars to travel to and from work each day. They have third party insurance because they cannot afford to pay for comprehensive insurance. They are facing a bill of €10,000 because both cars have had dodgy petrol put in and both engines have seized up. Christmas has been cancelled for that family, probably for a couple of years. They will not be able to recover from this blow. That is what is happening on the ground.

The penalties in place are inadequate. On summary conviction, the maximum fine is €5,000 or up to 12 months in jail. The Revenue figures for the second quarter of this year for convictions show that 65 firms and individuals were convicted for fuel offences. The average fine imposed on conviction for illicit fuel offences is just €2,900. People are making far more on a daily basis from fuel stretching than the penalties in place. I urge the Minister of State to separate the two offences - that of supplying stretched petrol and other fuel and that of using it. The mandatory penalty on conviction for those supplying these fuels should be a minimum fine of €5,000 and 12 months in prison. This is the maximum penalty that can be imposed at District Court level. This penalty should be imposed on the individuals involved because they are causing immense financial hardship throughout my part of the country. People's vehicles are being completely destroyed and they do not have the money to pay to have them repaired. Two vehicles a day are coming in for repair to a particular garage every day.

Another issue I wish to raise is the crisis in the agriculture sector, in which we have had protests by farmers about the price of beef. I will try to explain the issue in simple terms for those outside the agricultural community. Farmers receive approximately €600 less per head of cattle today than they did 26 years ago. This includes the single farm payment they receive. Nobody can survive in such a situation. The various sectors of agriculture have good and bad years, but the beef sector has bad and very bad years. For many beef farmers, it is not about Harvest 2020 but about survival 2015 and whether they will be able to remain in farming and beef production at the end of next year.

There are bigger issues about the specifications required by the factories and the price differentials between here and the United Kingdom. In general there are fluctuations from year to year in commodity prices, whether it be milk, beef or sheep. The globalisation of food production and the increased unpredictably of weather events mean that this problem will continue. I suggest we try to introduce an additional incentive to assist farmers with their cash flow. We should allow them to put a limited amount of their profits in a good year aside in a dedicated bank account. This amount would be deducted from their farm profits and only taxed when withdrawn from the dedicated bank account in a difficult year. What I am suggesting is an emergency fund that farmers would set aside in a good year and access in a poor year. This fund would not be penalised in the good year and could be taxed in the normal way in the poor year. For example, last year there was a fodder crisis and farmers were unable to get fodder at any price. Many farmers had to borrow money or through the co-op to pay for fodder. If they had the type of rainy day account I suggest, they could have accessed these and used these funds. This would help to even out the highs and the lows we see in commodity prices and the even greater highs and lows expected in the future. I urge the Minister to consider this suggestion on Committee Stage.

I wish to raise an issue that infuriates everyone, namely, the golden pensions received by senior executives in semi-State companies, senior officials in Departments and some senior Ministers, particularly by those who managed the economy in the run-up to the financial crisis. All of them have now left their positions and cannot be held accountable unless they come forward voluntarily to answer questions. Every one of them is collecting a gold plated pension. I propose that we introduce a clawback clause for all State pensions and that where people are grossly incompetent in their jobs, a clause in their pension contract would ensure they could be held accountable where it hurt them - their pockets - and a deduction could be made from their pensions for gross incompetence. The difficulty in regard to many of these individuals is that there is a big rush to retire when they are found out and once they have retired they are no longer accountable. In many cases, it is only after their retirement that the full scale of the financial mismanagement and waste of public funds comes to light. Some of them see the writing on the wall before they are caught and once out, they end up with a full pension. We need to put some provisions in place to ensure there is a clawback clause because consistently rewarding public sector bosses who have screwed up on the job they were contracted to do is one of the main reasons the country is being administered appallingly. I will be told we cannot introduce a clawback clause retrospectively. However, we were able to do it in the Financial Emergency Measures in the Public Interest Act that was passed by this House and which undermined the constitutional property rights of citizens. It needs to be done in regard to this issue. I am aware that the Minister of State has an interest in the issue of disability services. Currently, the Department is clawing back money spent in the intellectual disability sector between July and October. A letter sent in October indicated this money would be clawed back. If moneys provided for intellectually disabled people can be clawed back, surely we can claw back moneys from the fat cats who undermined the country, the economy and society and who are drawing down pensions today.

Deputy Thomas P. Broughan: Information on Thomas P. Broughan Zoom on Thomas P. Broughan I am glad to have the opportunity to make a brief contribution on the Finance Bill 2014. The Bill implements the majority of the taxation changes announced by the Minister for Finance, Deputy Michael Noonan, in his Budget Statement of 14 October. Today, Deputy Eoghan Murphy suggested a change in approach in how budgets were invigilated by this Parliament and spoke about the need for a stronger Parliament overall. His comments in this regard are reflective of the views I have long expressed in the House, on approximately 24 Finance Bills. This is the 24th time I have been asked to invigilate the debate on the Finance Bill.

I hope we will begin to receive more detailed budgetary information earlier in the year. Perhaps we might use the approach adopted by the Australian and Dutch Parliaments in order that Deputies can make an informed contribution to the debates on both the budget and the Finance Bill. While the Minister did provide outline costings for the new measures contained in budget 2015 which are instructive, there is still a disappointing and frustrating dearth of information on the macro position in regard to costings for many tax expenditures in this and earlier Bills.

Tax breaks have always played a prominent role in the Irish taxation system and the history of the State. For many years, colleagues in this House and I have demanded that tax expenditures be regarded simply as Government spending programmes and not effectively as a series of measures which are revenue neutral. Many studies, in particular the work of TASC by O'Connor, Staunton, Sweeney and O'Donnell in recent times, have shown that the costs and benefits of tax breaks are not uniform in their application across the people and households. The ESRI has noted, for example, that 80% of the benefit of pension tax reliefs goes to the top two deciles of income.

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