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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 Dara Calleary: Information on Dara Calleary Zoom on Dara Calleary] We always welcome tourists to the county.

I note the Minister of State's remarks on below-cost selling and completely endorse what he said. However, I remind the House that many amendments were tabled to the Consumer and Competition Protection Bill which would have assisted in this regard but which were voted down by the Government. This is not just a finance-related issue, there is also a need for a whole-of-government approach to it.

I welcome the debate on the Finance Bill 2014 and wish to focus on a number of issues related to it. The Bill, sadly, lacks a policy on entrepreneurs. This is particularly disheartening when one considers what could have been brought forward. At Question Time yesterday we engaged in a discussion on alternative sources of finance for entrepreneurship, especially crowd funding. Start-up businesses are still experiencing difficulties in obtaining finance in order that they might make a go of it. Some 10,000 to 15,000 start-up entrepreneurs are currently visiting this city in order to take part in the Web Summit. Were they to come to this country and seek finance to set up businesses on the basis of the ideas they are selling at the RDS, they would find it extremely difficult to do so. The Bill does very little to improve the position in this regard. I accept that it will result in some very welcome changes to the IAS, etc. However, these are for people who have money to invest and no account is taken of those individuals with small amounts of money who may wish to invest in either SMEs or community projects. I acknowledge that there is a great deal of work being done in the Department on crowd funding, which is a new concept which we must embrace by taking the ball and running with it. The fact that we have been able to attract so many entrepreneurs to the country this week shows that there is a willingness on people's part to take chances. I encourage the Minister of State, Deputy Simon Harris, one of the younger members of the Government, to drive the agenda on crowd funding onward within the Department.

The second point I wish to make relates to the tax treatment of entrepreneurs. When one compares the provisions contained in the budget for PAYE workers - miserable as they are - with those for entrepreneurs, one can see that the latter are being absolutely hammered once again in terms of the increase in the universal social contribution, USC, being foisted on them and income and taxation levels. While it is all very well to welcome multinationals which come to the country - unlike some Members sitting behind me, I am of the view that they are welcome and should be encouraged to come here - we must consider the bigger picture. I pay tribute to Mr. Martin Shanahan and his team at IDA Ireland for the work they do. I pay a particular tribute to Mr. Shanahan for the way he managed a certain television interview earlier this week. We must depend on our own people to create and sustain businesses. Entrepreneurship works on the basis that if one's business venture fails, one gets up and launches another. We need to encourage the culture of entrepreneurship. We must ensure the many entrepreneurs who put their necks on the line and are successful - I accept that there are others who are not so successful - are not hammered in terms of taxation. It must not be the case that they might consider themselves being better off as PAYE workers rather than as business people creating employment for others. From the perspective of finance, that is the picture with which they have been presented in both the budget and the Bill.

I welcome many of the measures contained in the Bill in respect of farming, particularly those which relate to moving a new generation of people into farming and giving them access to land and assets. I agree with Deputy Anthony Lawlor's assessment of the difference between business and farming. I draw the Minister of State's attention to the very vague definition provided in the Bill of the term "active farmer". The Bill refers to an active farmer as being someone who is involved in farming for not less than 50% of his or her normal working time. Many farmers do not have the option of spending 50% of their normal working time on their properties because in order to sustain their enterprises, they require off-farm incomes. Teagasc's national farm survey for last year shows that some 30% of all farmers had off-farm incomes. This figure rises to 42% when those with suckler herds are taken into account. I would hate to think many will lose out on the capital gains reliefs being made available to allow people to move to working land or into land ownership because the definition of what constitutes an "active farmer" is too narrow. I ask that some effort be made to define the term in the broadest way possible. Perhaps requiring people to acquire green certificates, pursue Teagasc courses, etc., might be one way to proceed. I accept that we do not want to extend the reliefs to everyone and completely agree that in order to obtain them, people should be working actively on their farms and earning incomes from them. However, let us not just exclude those who out of necessity are obliged to have other sources of income.

The other element missing from the Government's narrative on economic recovery is the notion of regional recovery. The areas of Dublin 2 and Dublin 6 are doing very well. When one strays beyond these postal codes, however, one sees that the shoots of recovery are somewhat less green in hue. In places beyond the M50, with the exception of Galway and Cork, they become progressively less green. There is a need for a complete renewal and revision of regional policy. There is absolutely no sense in recreating the problems in Dublin, Galway, Cork and other cities in the context of shortages of property to buy or rent. These problems gave rise to the difficulties we have spent the past few years trying to solve. If we continue to focus on the areas to which I refer and to push investment into them, we are going to recreate the problems I have outlined.

The regional economy offers enormous opportunities. Those who live in the regions are talented and skilled and, if they so desire, have the right to obtain employment in locations as close as possible to the areas in which they were born. All they want is the opportunity to do so. As well has having a strategy which encourages SMEs in the regions, there is also a need for a strategy to encourage inward investment into these regions. The fact that some 64% of all IDA Ireland client visits take place in Dublin, Cork and Galway shows that something is missing from our overall policy. I accept that what I am suggesting would involve the provision of a tax package, but it would also require a willingness on the part of every Government body to take real action in order that we might create a sustainable economy, rather than paying lip service to the concept.

A core foundation stone in building the economy in the region in which I live is Ireland West Airport Knock. I will reiterate the figures for the benefit of the Minister of State. Some 700,000 passengers passed through the airport last year and it contributes more to the State in terms of PAYE and PRSI than it receives from it in the form of a subvention. It is the absolute jewel in the crown not just of County Mayo but also of the west coast. It has enormous potential in developing as a jobs and tourism hub. As Deputy Anthony Lawlor noted, it is the airport of the Wild Atlantic Way. This facility needs a package of supports. It is not seeking a bailout or a handout; rather, it is looking for an investment which it will repay many times over. There is flexibility within EU state aid guidelines in the context of investment in regional airports. It has been shown on numerous occasions, even in the recent case of the second terminal at Munich Airport, that if there is a willingness, these guidelines can be circumvented. Investment in Ireland West Airport Knock would result in growth the areas of employment and SME and entrepreneurship activities. As indicated in this regard, the State would receive a return many times greater than the amount originally invested. I acknowledge the work Deputy John O'Mahony has been doing on this matter. He headed up a very ambitious study group which spent a huge amount of time examining this matter last year. However, delivery is now required and we need to see hubs such as that at Ireland West Airport Knock being developed in order that the economy might be driven forward.

It would be foolish to comment on matters of finance without commenting on certain letters which were sent to the previous Minister for Finance by the former president of the European Central Bank, ECB, Mr. Jean-Claude Trichet, and which were finally published this morning. Three years ago Mr. Trichet threatened the previous Government and the people and held a loaded gun to their heads. The letters in question show that the ECB strayed well beyond its legal mandate at the time by forcing a settlement on the people that had nothing to do with either supervision or regulation. If the ECB had been as active as it should have been in these areas, we might not be in the position in which we find ourselves. The letters also show that there is an urgent need for Mr. Trichet to come before the banking inquiry in order that he might explain both his actions and the policies he was pursuing at the time. The notion that he has retired is not good enough, particularly as the country is paying for the consequences of the letters to which I refer and, in particular, Mr. Trichet's failure to fulfil his supervisory role.

There is a need to immediately revisit the commitment made at the European Council summit in 2012. The discussions in this regard in the context of our ability to obtain a refund or recapitalisation have been parked. We must also pursue the matter of the promissory notes and the bonds being used to pay for them which the ECB would like us to sell into the markets. This issue is also up for renegotiation. It is clear that the ECB exceeded its official mandate and that it certainly exceeded its moral mandate. One is obliged to ask when the European Union which has always prided itself on bringing its citizens together allowed itself to become driven by the ECB and letters sent by the former president of that institution. It is time citizens were brought back to the heart of the European Union. Their interests, rather than the pursuit of an economic model which is not suitable for every country, must be paramount. The model to which I refer might be suitable for larger member states, but it certainly is not for others. The experience of Ireland, Greece, Spain, Portugal and Cyprus in recent years is evidence of this. The letters published this morning illustrate the ethos at the heart of the ECB's policy. It is time to change that ethos.

Acting Chairman (Deputy Charlie McConalogue): Information on Charlie McConalogue Zoom on Charlie McConalogue The next speaker is Deputy Stephen S. Donnelly who is sharing time with Deputy Lucinda Creighton.


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