Finance Bill 2013: Second Stage

I move: "That the Bill be now read a Second Time."

I am pleased to bring the Bill to the House at a time we can be optimistic. Ireland is continuing to recover from the most severe downturn in the history of the State, caused by crises in both the public finances and the banking system. The approach the Government has taken to engineer that recovery has had three overarching principles, namely, returning stability to the public finances, repairing the banking system and restoring sustainable growth to the economy. The Government is on track to bring the deficit under 3% of GDP by 2015; the banks are returning to more normalised operations and have accessed borrowing markets, and the economy is expected to record the third straight year of growth in 2013. Progress is real and tangible but much remains to be achieved.

The most recent Central Statistics Office, CSO, data show that in the first three quarters of 2012 GDP increased by 0.8% compared with the same period a year earlier. Growth continues to be driven by exports which increased by 3.2% in the same period, reflecting improvements in competitiveness and Ireland's enduring attractiveness as a destination for foreign direct investment. Our progress is reflected in investors' confidence in our ability to successfully tackle our economic and budgetary problems. For example, the yield on 2020 Government bonds has fallen from approximately 15% in July 2011 to 3.6% today.

On the fiscal side, the public finances have stabilised and the budget deficit is declining. The general Government deficit for 2012 is currently estimated to have been under 8% of GDP, down from an underlying deficit of 9.1% of GDP the previous year. This year the deficit will be reduced further to 7.5% of GDP, in line with commitments under the EU-IMF programme.

On the financial side, we have consigned the promissory notes and the annual payment of €3.1 billion every March to history. We have also removed the former Anglo Irish Bank and Irish Nationwide Building Society from the banking landscape. This success in dealing with legacy issues has been complemented by positive developments in terms of the sale of €1 billion of Bank of Ireland contingent capital notes and today's sale of Irish Life to Great-West Lifeco for €1.3 billion plus a €40 million dividend. These developments illustrate that there is value to the State's holdings in the banks and that the Government will sell these assets when the price and time is right for the taxpayer.

With regard to the Bill, the Government considers unemployment to be its biggest challenge. While job creation in the exporting sector is encouraging, it is domestic growth which will help us to make real progress in tackling this issue. That is why the Bill contains a package of measures designed to support small and medium enterprises. The Bill begins to implement the ten point tax reform plan announced in the budget. The plan includes measures such as reforming the three year corporation tax relief for start-up companies, increasing the cash receipts basis threshold for VAT, amending the close company surcharge to improve cash flow for SMEs and extending the foreign earnings deduction for work-related travel to certain additional countries. Another measure which will be important for this sector is the amendment of the "key employee" provision of the research and development tax credit regime by reducing from 75% to 50% the proportion of time that such an employee must spend solely on research and development activities to qualify for the credit. In addition, as outlined in my Budget Statement, I will extend the employment and investment incentive and the seed capital scheme for a further seven years. I have also decided to allow for investments in hotels, guesthouses and certain other self-catering accommodation to qualify for these incentives.

The introduction of the new JobsPlus scheme later this year will provide grants for employers to encourage them to employ individuals who have been on the live register for greater than 12 months. My Department has been working closely with officials of other Departments on the design of this initiative. It will provide a single, easy to understand, focused incentive in this area to replace a number of schemes. In recognition of this, the Bill provides for the closure of the Revenue job assist scheme, to be co-ordinated with the launch of the successor scheme to which I referred I announced the budget. The details of this will be announced in the coming days.

A provision that establishes a scheme for accelerated capital allowances in respect of the construction of hangars and ancillary airport facilities is included in this legislation. There is scope to place Ireland firmly on the map as a centre of excellence for the aviation industry, with all that may then ensue in terms of job creation. To support our thriving agrifood sector and build on the supports for this sector announced last year, the Bill provides for a capital gains tax relief to be available where the proceeds of a sale of farm land for farm restructuring purposes are reinvested for the same purpose.

The legislation also provides for pre-retirement access to funded additional voluntary contributions, AVCs. Individuals will be allowed a once-off option to withdraw up to 30% of the value of funded AVCs made to supplement retirement benefits. This is a restricted measure which will enable rather than incentivise certain individuals to access part of their pension savings beyond their regular or compulsory pension contributions.

As announced in the Budget Statement, the Bill will provide a new tax regime to allow for the introduction of real estate investment trust, REIT, companies in Ireland. It is hoped they will facilitate the attraction of foreign investment capital to the Irish property market.

The Bill contains a number of measures which demonstrate Ireland's positive reputation in international tax matters. As I noted in my Budget Statement, Ireland is one of the first countries in the world to conclude a new type of agreement with the United States to improve international tax compliance.

I will describe the main provisions contained in the Bill. Part 1 deals with the income levy, universal social charge, USC, and income, corporation and capital gains taxes.

Section 1 is an interpretation section. Section 2 makes provision for a USC charge, in specific circumstances, in cases where a balancing charge arises. It also exempts from USC amounts paid under pre-retirement access to AVCs. Section 3 provides for the changes to the USC announced in budget 2013 which applies the standard rates of USC to those aged 70 years and over, as well as to medical card holders - both PAYE and self-employed income earners - who have income in excess of €60,000 per annum. Section 4 provides for the extension of certain revenue administration powers in relation to the collection of income tax to the collection of USC, while section 5 relates to the "key employee" provision of the research and development tax credit, the threshold for which will be reduced to 50%.

Sections 6 and 43 amend sections 71 and 29, respectively, of the Taxes Consolidation Act 1997, TCA. These amendments counter potential avoidance mechanisms in relation to non-domiciled individuals. Section 7 provides for the closure of the Revenue job assist scheme, in line with the launch of the new JobsPlus scheme.

Section 8 gives effect to the budget day announcement that maternity benefit payments will be treated as taxable income with effect from 1 July 2013. As is the case with all social welfare payments, maternity benefit payments will continue to be exempt from USC. In addition and to ensure a fair and consistent approach, this section also provides that adoptive benefit and health and safety benefit payments will be treated as taxable income with effect from 1 July 2013. The section also provides for the making of regulations for the efficient collection and recovery of any income tax due on the benefits.

Section 9 provides for an extension of the foreign earnings deduction for work-related travel to a number of African countries which have been identified by the Department of Agriculture, Food and the Marine as having great potential for Irish agrifood exports.

The disregard for tax relief for third level fees is increased in section 10 in line with the scheduled increases in the student contribution announced by the Minister for Education and Skills.

Section 11 introduces legislation that will counter avoidance schemes, whereby employers utilise employee benefit trusts to provide loans or loans of assets for employees. Such schemes can involve the non-repayment of such loans, thereby leading to a gain for the employee, which is not subject to tax.

Section 12 makes a number of changes in respect of benefit-in-kind, BIK, legislation. In particular, it confirms that when a benefit is provided by any public body for an office holder or employee, whether employed directly by that body, a BIK charge applies. The budget change in the specified rates applicable to preferential loans is also confirmed, while a number of minor technical amendments will be made.

Section 13 deals with various issues relating to ex gratia payments, including the abolition of top slicing relief, which I announced on budget day. In addition, the section provides for the extension of the maximum lifetime limit of €200,000 that may be paid tax free to all termination or ex gratia payments. The section provides for the abolition of foreign service relief in respect of gratuity payments made on retirement or removal from office.

Section 14 provides for an amendment to the definition of "relievable amount" which will provide that the standard rate tax relief at source on a health insurance premium will be net of any "risk equalisation credit" under the new permanent health insurance risk equalisation scheme introduced by the Minister for Health in late 2012.

Section 15 makes changes to the basis of assessment for rental income or profits sourced from outside the State. The changes in effect mean that losses from foreign rental income cannot be offset against other foreign income such as income from foreign trades, pensions or dividend income. The long-standing Revenue practice of allowing foreign rental losses to be offset against foreign rental profits will continue.

Section 16 provides for pre-retirement access to funded additional voluntary contributions, to which I referred earlier. The section also amends certain requirements relating to the extension of the approved retirement fund option to all defined contribution pension arrangements provided for in the Finance Act 2011 by temporarily rescinding the increases set out in the Act in the specified income requirement for the approved retirement fund option and in the maximum set-aside amount for the purpose of an approved minimum retirement fund.

Section 17 introduces two new provisions which apply to individuals who are engaged in the trade of dealing in or developing land. The first relates to restrictions on the use of certain losses by individuals who are not actively engaged in a trade of dealing in or developing land until these losses have actually been realised. Also, provision is being made to ensure that where loans are taken out to acquire land by individuals engaged actively or otherwise in a trade of dealing in or developing land and these loans are subsequently released or forgiven, the amount forgiven is treated as a receipt of income.

Section 18 provides for the changes to the scheme of tax relief for donations to approved bodies that I announced in the budget.

Section 19 relates to stock relief. The Finance Bill extends the general 25% rate and the 100% young trained farmer rate of stock relief to 31 December 2015. The Bill also extends the definition of registered farm partnerships for the purposes of the enhanced 50% stock relief - 100% for certain young trained farmers - to other registered farm partnerships such as beef or sheep farm partnerships. Both the 50% and 100% rate of reliefs are subject to State aid clearance from the European Commission. As part of this process, the Department of Agriculture, Food and the Marine had to give assurances that certain conditions would be adhered to in relation to the 100% young trained farmer rate. The Bill makes provision for these conditions.

Section 20 relates to film relief. Following a review of the relief by my Department, film relief will no longer be available to investors in qualifying films. Instead, a payable tax credit will be paid directly to a producer company. I am setting the rate of the tax credit at 32%, which is a substantial saving to the taxpayer since relief is currently given to investors at a rate of 41%.

The extension and change to the employment and investment incentive and seed capital scheme, to which I referred earlier, are provided for in section 21.

Section 22 increases deposit interest retention tax, DIRT, by three percentage points, with effect from 1 January 2013, as announced in budget 2013.

Section 23 modifies the definition of an "investment certificate" to facilitate the issuing of Islamic bonds.

Section 24 reduces the tax credit available for donations of heritage property to the State from 80% of the market value of the property to 50%. The section also makes a number of other changes to permit the donation of ancillary buildings and land along with heritage properties, which may be necessary for the provision of access or parking facilities for tourists.

Section 25 provides for the offset of unutilised foreign tax credits against universal social charge liabilities. It also provides for an additional tax credit in respect of foreign tax paid on certain dividends from EU or EEA treaty partner countries, by reference to the nominal rate of tax in the payer's jurisdiction. This latter change is being made on foot of a ruling by the Court of Justice of the European Union.

Section 26 makes two technical amendments to update definitions in the Taxes Consolidation Act, section 79C.

Section 27 increases the amount of group expenditure on research and development activities excluded from the incremental basis of calculation from €100,000 to €200,000.

Section 28 makes a technical amendment to the Taxes Consolidation Act, section 246, and provides an exemption from withholding tax on interest payments to approved pension schemes.

Section 29 relates to the living cities initiative. I announced in my budget speech that proposals for targeted tax incentives in already identified regeneration areas would be examined. As this is a pilot scheme, it will be confined to certain designated areas for the time being. Due to the requirement to obtain EU state aid approval, this provision will be subject to a commencement order.

Amendments to the Taxes Consolidation Act are made in section 30 to establish an accelerated capital allowances scheme pertaining to the aviation sector, as I outlined.

Section 31 contains the enabling legislation to allow for the implementation of an International Tax Information Exchange Agreement with the United States of America to Improve Tax Compliance and Provide for Reporting and Exchange of Information concerning Tax Matters which was signed at the end of 2012.

Section 32 amends the close company surcharge rules and increases the de minimis amount of undistributed investment and rental income which may be retained by a close company without giving rise to a surcharge from €635 to €2,000. The same increase will apply in respect of the surcharge on undistributed trading or professional income of certain service companies.

Section 33 extends the three year corporation tax exemption for start-up companies and allows that any unused relief arising in the first three years of trading, due to insufficiency of profits, may be carried forward for use in subsequent years. This is subject to the maximum amount of relief in any one year not exceeding the eligible amount of employers' PRSI in the year in question.

Section 34 introduces an amendment to reduce from ten years to five years the period in which a specified intangible asset must be used in the trade to avoid a clawback of allowances.

Section 35 updates the list of specified non-commercial State sponsored bodies that qualify for exemption from income tax and corporation tax. The section also introduces a clarification that grants or subsidies paid under the wage subsidy scheme, as administered by the Department of Social Protection, are exempt from income tax and corporation tax.

Section 36 reinstates a technical provision to ensure the appropriate amount of trading losses is brought forward when making a claim for value basis relief.

Section 37 clarifies certain conditions necessary to qualify for group relief for corporation tax losses.

Section 38 increases the rates of tax applying to life assurance policies and investment funds by three percentage points with effect from 1 January 2013.

Section 39 provides for the introduction of a tax regime for real estate investment trust, REIT, companies in the Taxes Consolidation Act. I referred to this earlier. Subject to meeting a number of criteria, including a requirement to distribute 85% of its property income by way of property income dividend, the regime provides a tax exemption in respect of the income and chargeable gains of a property rental business. The section also provides that property income dividends paid by the REIT will be subject to dividend withholding tax and will be taxable in the hands of the shareholders.

Section 40 restores the tax transparency treatment of investment limited partnerships, ILPs, established under the Investment Limited Partnerships Act 1994. It does so by inserting a new section 739J in to the Taxes Consolidation Act. The section also updates certain other provisions of the Act to refer to the new section 739J.

Section 41 provides for the capital gains tax rate increase from 30% to 33%, as announced on budget day. Section 42 replaces references to "Irish currency" in certain provisions of the Taxes Consolidation Act 1997 with the term "the currency of the State". Section 43, as described with section 6, is an amendment to counter potential avoidance mechanisms.

Section 44 amends the provisions relating to the tax treatment of certain profits, known as "carried interest", received by venture fund managers, the purpose of which treatment is to attract venture capital investment into this country.

Section 45 relates to changes in capital gains tax, CGT, relief introduced in last year's Finance Act for individuals who dispose of agricultural assets to their children and certain other individuals. The amendments ensure that relief will apply to such disposals by individuals aged 66 years or over on or after 1 January 2014 where the consideration for the disposal is €3 million or less. In addition, it provides for the aggregation of the consideration for disposals made on or after 1 January 2014 by such individuals for the purposes of the €3 million lifetime limit introduced in last year's Act.

Section 46 provides for the relief from CGT for farm restructuring that was announced in the budget. The relief will apply to a sale, purchase or exchange of agricultural land in the period from 1 January 2013 to 31 December 2015 where Teagasc has certified that a sale and purchase or an exchange of agricultural land was made for farm restructuring purposes. The commencement of the relief is subject to receipt of EU state aid approval.

Part 2 deals with excise. Section 47 gives effect to the increase in the rates of tobacco products tax, which, when VAT is included, amounts to 10 cent on a packet of 20 cigarettes with pro rata increases on other tobacco products. The section also provides for a further increase of 50 cent per packet of roll-your-own tobacco.

Section 48 makes some technical amendments to the mineral oil tax provisions of Chapter 1 of Part 2 of the Finance Act 1999. Section 49 introduces a new section in mineral oil tax law to provide for a partial relief - by way of repayment - for auto diesel used in the course of business by qualifying road haulage and bus operators. I had announced that this would apply to tax compliant licensed hauliers but, following consideration, I have decided to extend this relief to tax compliant licensed passenger transport operators.

Section 50 amends general provisions of excise law, including provisions to ensure that repayment of overpaid excise duty does not result in unjust enrichment. Section 51 defines terms used in the provisions of general excise law, while sections 52 and 53 amend provisions of general excise law for the powers of Revenue officers for excise purposes as well as the delegation of powers, functions and duties. Section 54 provides for the indictable offence of illicit production of tobacco products, as well as an offence of the selling or delivery of unstamped tobacco products.

Section 55 amends the betting duty provisions by clarifying the provisions in respect of relief from betting duty for so-called laid off bets. This involves the deletion of existing provisions and the inclusion of a relief provision in line with other excises, and it also provides for the necessary amendments, subject to commencement, when the provisions with regard to remote betting contained in the Finance Act 2011 are commenced.

Section 56 gives effect to the increase in the excise rates of alcohol products tax, which VAT inclusive amounts to 10 cent on a pint of beer or cider and a standard measure of spirits and €1 on a standard bottle of wine.

Sections 57 and 58 provide for a relief from electricity tax and natural gas carbon tax in respect of electricity and natural gas intended for use in the context of diplomatic relations in the State, in accordance with EU law. Section 59 provides for a number of amendments in preparation for the commencement of solid fuel carbon tax with effect from 1 May 2013, as I announced in the budget. This section also provides for a relief from solid fuel carbon tax in respect of solid fuel intended for use in the context of diplomatic relations in the State, in accordance with EU law.

Section 60 amends a number of definitions for vehicle registration tax, VRT, purposes. Section 61 gives effect to the revised system of VRT, which was introduced from 1 January 2013. Section 62 extends the period for the VRT relief for hybrid and flexible fuel vehicles, while sections 63 and 64 are minor technical amendments.

Part 3 deals with value added tax. Section 65 is an interpretation section. Sections 66 and 69 provide that receivers, liquidators or any other persons exercising a power are liable to VAT in respect of services they make on behalf of a defaulter, including obligations under the capital goods scheme and options to tax. Section 69 also includes the strengthening of a general anti-avoidance measure as regards sales to connected persons. Section 67 is an anti-avoidance measure with regard to the supply of vouchers supplied to businesses outside the State for resale. Sections 68 and 73 relate to the entitlement of fund managers to deduct input VAT and bring our law into line with the EU VAT directive. Section 73 also provides that the services threshold applies to public bodies in respect of supplies made by them of sporting facilities. Section 70 increases the VAT cash receipts basis threshold from €1 million to €1.25 million with effect from 1 May 2013. This change is part of the ten point tax reform plan for small businesses announced in the budget.

Section 71 reduces the farmer's flat rate addition from 5.2% to 4.8% with effect from 1 January 2013, as announced in the budget. The 4.8% rate continues to achieve full compensation for farmers. Section 72 is a technical change that allows the Revenue Commissioners to make regulations relating to evidence of business controls regarding the issue and receipt of invoices.

Part 4 deals with stamp duties. Section 74 is an interpretation section. Section 75 introduces a number of technical amendments consequential to the stamp duty self-assessment provisions introduced in the Finance Act 2012. Section 76 inserts three new sections into the Stamp Duties Consolidation Act 1999, SDCA, and deletes section 36. It also deletes section 82 of the Finance (No. 2) Act 2008, which contained similar provisions that were never commenced. These new sections will counteract stamp duty avoidance measures that involve resting in contract, licensing and long lease arrangements. Section 77 amends section 81AA of the SDCA to extend the relief from stamp duty on transfers of agricultural land, including farm houses and buildings, to young trained farmers until 31 December 2015.

Section 78 amends sections 88(2) and 90(3) of the SDCA. It relates to section 40 in respect of amendments to the taxation of investment limited partnerships and updates the SDCA to ensure that an existing exemption from stamp duty on transfers of units in investment limited partnerships will continue to apply. It provides separately that the exemptions for the transfer of foreign shares and certain financial services instruments will apply in the case of securitisation transactions.

Section 79 amends section 123B of the SDCA, which provides for the stamp duty charge on cash, combined and debit cards. This amendment will continue the exemption from stamp duty for a basic payment account on a permanent basis. Some technical amendments have also been made to the definition of "basic payment account".

Section 80 gives effect to the new rates of the health insurance levy for 2013. The rates for 2012 remain in force until 30 March. From 31 March, the rates will vary depending on the age of the person insured - over or under 18 years - and the level of cover.

Does the House agree to extend the time available to the Minister to conclude? Agreed.

Part 5 deals with capital acquisitions tax, CAT. Section 81 is an interpretation section. Section 82 provides for the CAT changes announced in the budget, bringing the increase in the rate from 30% to 33% and the 10% reduction in the group tax free thresholds.

Section 83 confirms the position that interest on outstanding discretionary trust tax, DTT, arises from the valuation date of the initial once-off charge to DTT and from the valuation date of the annual charges.

Section 84 provides that a claim for a repayment of discretionary trust tax must be made within four years of the valuation date or the date of the payment of the tax, where the tax has been paid within four months of the valuation date. The amendment also provides that a claim for repayment of any payment made on account of tax is also subject to the four-year claim limitation period.

Section 85 extends an existing exemption from CAT to assurance policies known as capital redemption policies issued by life assurance companies where the disponer and the donee or successor are both non-domiciled and non-resident in the State. Section 86 relates to section 40 in respect of amendments to the taxation of investment limited partnerships. It provides that an existing exemption from capital acquisitions tax on certain transfers of units in investment limited partnerships will continue to apply following other legislative changes. Section 87 extends an inheritance tax exemption on inheritances taken by a child over the age of 21 from an approved retirement fund or from an approved minimum retirement fund to similar inheritances from a vested personal retirement savings account.

Part 6, the final part of the Bill, covers miscellaneous provisions. Section 88 is an interpretation provision. Section 89 makes a number of mainly technical amendments to the new streamlined assessing rules for direct taxes, that is, income tax, corporation tax and capital gains tax, that were introduced in Part 41A of the Taxes Consolidation Act 1997 by the Finance Act 2012. Changes are also made to clarify the operation of various provisions. In addition, this section makes technical changes in certain provisions outside of Part 41A.

Section 90 amends Schedule 13 to the TCA in order to update the list of accountable persons who are obliged to operate professional services withholding tax, PSWT. The section also clarifies the position regarding the treatment of partnerships for PSWT purposes and a number of minor technical amendments are made. Section 91 amends sections 1094 and 1095 of the Taxes Consolidation Act 1997. This will require an applicant for a tax clearance certificate to be compliant in relation to stamp duty and capital acquisitions tax in addition to the existing taxes currently included in the legislation.

Section 92 amends sections 879, 880 and 884 of the Taxes Consolidation Act 1997 which set out what is to be included in a return of income by an individual, a partnership return and the corporation tax return of a company, respectively. The amendment is to facilitate the submission of electronic accounts information with those returns via the Revenue online service, ROS. With regard to the corporation tax return the amendment sets out the financial information which is to be submitted with the return by a non-resident company trading in the State through a branch or agency. This is also to support the e-filing on ROS of this information by the company.

Section 93 amends section 960E of the Taxes Consolidation Act 1997. The amendment provides that the Collector General may issue a demand by electronic means to a person who is registered to deliver a return and pay tax under the Revenue online system, ROS, and a person who is required to deliver a return and pay tax via ROS.

Section 94 amends sections 811, 811A and 817D of the Taxes Consolidation Act 1997 which are concerned with general anti-avoidance, protective notifications and mandatory disclosure of certain transactions, respectively. The main change is to section 811A which is amended to delete subsection (1C) so as to ensure that the same "burden of proof" applies in determining whether a transaction is a tax avoidance transaction, regardless of whether a protective notification has been received.

Section 95 provides for the deletion of section 886(4)(b) of the Taxes Consolidation Act in order to ensure that this country can continue to meet its international obligations in regard to the exchange of information with other tax administrations. Section 96 amends sections 826(7) and 912A which relate to the exchange of information under the Joint Council of Europe-OECD Convention on Mutual Administrative Assistance in Tax Matters as well as the protocol to that convention.

Section 97 makes a number of amendments relating to tax arising from the enactment of the Personal Insolvency Act 2012. Section 98 provides that Revenue may authorise a suitably-qualified person to inspect any asset in order to establish its value for tax purposes. Section 99 ensures that persons other than Revenue officers engaged by Revenue to carry out work relating to the administration of any taxes or duties are subject to the same confidentiality requirements as Revenue officers. It also provides that any person to whom taxpayer information is disclosed in accordance with the section is subject to sanctions if that information is used for any purpose other than that for which it was disclosed.

Section 100 makes provision for various amendments to the tax code as it applies to civil partnerships. Section 101 sets out additions to the list of double taxation agreements, DTAs, and tax information exchange agreements, TIEAs, between this country and other jurisdictions. Finally, section 102 addresses miscellaneous technical amendments in relation to tax, while sections 103,104 and 105 cover standard annual provisions.

At this stage, there are still a small number of matters under consideration for inclusion in the Finance Bill that I may bring forward on Committee Stage. I will, of course, also give consideration to any constructive suggestions put forward during our debate tonight, tomorrow and Thursday.

I am pleased to have an opportunity to contribute on Second Stage of the Finance Bill 2013 although I do not particularly see the need for the Second Stage to take place so late in the evening. I acknowledge that it has been an historic day in the Oireachtas but I do not see the reason for a great rush. While Second Stage is important, Committee Stage is even more important and I hope adequate time will be provided for all of the elements of the Bill to be properly debated. We have 105 different sections over 172 pages. The Minister has read a summary of many of the elements into the record, as is normal on Second Stage. Many of the provisions are technical and must be carefully assessed and monitored.

There is a way of improving the process of making decisions such as this every year. Whoever is in the Minister's chair announces the key elements of the Finance Bill but we never seem to have a tracking mechanism in place to assess the significance of what we did previously. Last year the Minister announced a range of measures and we must fish out answers by way of parliamentary question or other means of scrutiny to see how effective they were. One could take, for example, the special assignee relief programme that was introduced last year, which was a tax incentive to attract key executives into this country. I do not know how successful the measure has been. When we get to the next Finance Bill we should be able to carry out a simple, straightforward analysis of all of the key measures from the previous year's Bill to see whether they have delivered and what the outputs have been. I accept we have the annual output statement from each Department - a reform I welcome - but it would enhance the decision-making process and make what we are doing this evening and over the coming weeks in respect of assessing the Bill far more meaningful.

I wish to comment briefly on the sale of Irish Life today to Great-West Lifeco. Overall, it is a positive development. I am not able to give an opinion on the price that was achieved or whether more could have been secured over a period of time.

The Minister said today that the State is not in the business of being an investment manager or a hedge fund and what we achieved in terms of price is essentially what we paid for it. It is certainly a vote of confidence that a very significant global player is willing to invest in a going concern such as Irish Life in Ireland and that brings benefits. Investors considering other possible investments in Ireland will take some comfort from the fact that a company such as Great-West Lifeco has invested in Irish Life. The Minister pointed out in his press release that the deal is "the first time during this crisis that a company in which we have invested has been returned fully to private ownership". That is true but, as the Minister well knows, the problems in Irish Life and Permanent were not in Irish Life but in the banking arm of Permanent TSB, but nonetheless it is progress that we are able to divest ourselves of it. I do not believe the State should be in the business of running commercial entities that in many respects are better operated by those who have expertise and a track record in that area. I ask the Minister at some point to update the House on the employment implications. Irish Life has 2,200 employees and Canada Life (Ireland) has approximately 600 employees, which amounts to almost 3,000 employed by the new entity. From my reading of the various press releases today, it seems inevitable that there will be voluntary redundancies in the new organisation. We need more information on that because that is something that has happened in past. For example, when the joint liquidator sold Quinn Insurance to Liberty Mutual and Anglo Irish Bank, commitments were given not by the Minister but by the joint administrator, but from looking at the record those commitments were not honoured. That is an issue we need to have dealt with.

At an overall level, standing back from the detail and having regard to the Minister's opening remarks, I note he highlighted a number of positives in the direction we are going with the economy. There are positives; of that there is no question. He said that 2013 is likely to be the third consecutive year of economic growth but, as he will readily acknowledge, the level of growth that is being achieved is barely discernible. It was around 1% last year and hopefully it will be 1.5% in the current year. If it was an opinion poll, one would be saying it was within the margin of error. Any level of growth is to be welcomed and is important, particularly against the backdrop of what is happening in the eurozone, where the economic data are not particularly encouraging and the area is still stuck in recession. Overall, Ireland is doing better than many of our counterparts in the European Union and in the eurozone. The Minister has correctly highlighted where the key battleground is as we go forward: it is in the domestic economy. Exports continue to do reasonably well, though some data are not as glossy as people might like to portray. Many of the export sectors are not as labour-intensive as we would like them to be. One does not get the employment dividend from much of the export-related activity that one gets in the domestic economy from activity on the high street and in the retail sector and service industries. That is where we need to generate additional activity.

There is no doubt that there are good measures in this Bill. The Minister has outlined a new ten-point plan for SMEs. I hope it does not suffer the same fate as the Fine Gael five-point plan in the election, which has not been seen for the past two years. Hopefully, this ten-point plan will last a little bit longer and will actually be implemented.

It is now two and half months since the Minister for Finance and his colleague, the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, introduced budget 2013 to this House. We are in a position to give it a more detailed analysis through the Finance Bill that has been presented. It is my contention that this Bill represents act two of a deeply unfair package - that is, budget 2013. It will be followed shortly by the social welfare Bill, which will copperfasten the most egregious elements of the budget.

To put the budget in context, we should look at last week's statistics from the CSO, which show that poverty is worsening. The latest analysis indicates that the number of people in poverty has now reached a record level of more than 700,000. The increase in the proportion of Ireland's population at risk of poverty, from 14.7% to 16% in just one year, points to a major policy failure by the Government. In 2012 a disproportionate part of the budgetary adjustments fell on poor and vulnerable people.

It is important to examine the budgetary record of the Government during the past few years. The ESRI made it very clear that budget 2012 was regressive in nature. It stated: "Looking at the impact of the 2012 budget it is clear that the greatest reduction in income is for those on the lowest incomes - a fall of between 2 and 2.5 per cent for the poorest 40 per cent of households [compared to] ... a fall of close to 1 per cent for the next 40 per cent of households, and of 0.8 per cent for the top 20 per cent." One would expect that the Government would have learned its lessons from the regressive and unfair nature of that budget but the early analysis from researchers attached to the ESRI is that budget 2013 was unfair in its impact. A number of those researchers have published their opinions and they estimate that for the lowest income group the income reduction is just over 1%, while for the top income group it is lower, at a little over 0.5%. That is its assessment taking into account the distributional effects of budget 2013. It outlines exactly what is included and what is excluded from that analysis and points out the likely impact of including the items that are excluded, and it does not change the overall conclusion. It is important that is put on the record.

Families, once again, were in the firing line. The budget taxed maternity benefit from mid-2013, cut child benefit once again despite the promises from the Labour Party, reduced financial support for back to school costs and hiked college costs again despite the promises that were made. This is on top of the misery heaped on people from the abolition of the PRSI allowance, which they are now feeling in their pay packets, and the introduction of a residential property tax that takes no account of ability to pay in any meaningful way. Nothing in the Finance Bill undoes the damage inflicted on budget day by these and a number of other measures.

To take some comfort from the measures that were introduced, many of the Labour Party Deputies, in particular, were going around saying that the budget included €0.5 billion of wealth tax measures. The Taoiseach said that the package of tax measures directed at richer people had been the largest tax on wealth ever introduced in Ireland. It would appear that many of those who made such points do not fully understand the difference between wealth and income. The list that the Labour Party has been putting forward includes a mansion tax on properties worth over €1 million, an increase in the universal social charge on high-income pensions, extending PRSI to trade and unearned income, reducing tax reliefs for large pension pots, and increases in capital gains tax, capital acquisitions tax and deposit interest retention tax, DIRT. While some Labour Party Deputies have called this a wealth package, the only tax on wealth defined as an asset that is included in the list is the property tax. It is my estimate that no more than €115 million can be linked to high earners in 2013 and about €175 million in a full year. It must be acknowledged that that is aside from the change to the maximum allowable pension funds that will attract tax relief, which the Minister outlined on budget day, but those changes are not coming into effect until next year and it appears that not a huge amount of work has been done on that issue. The Minister acknowledged on that day that the estimated full-year savings are provisional at this time, as further detailed analysis of the necessary changes and their impact will be required. That was not a measure in budget 2013; it was an advance announcement of something that may or may not happen in budget 2014, and I am certainly sceptical that the revenue yield of €0.25 billion that has been earmarked from that measure will actually be achieved if it can be implemented.

I would be the first person to acknowledge that there are some welcome measures in this Bill with regard to the SME sector. I welcome the focus the Government is putting on the SME sector. The Minister's declaration that "the SME sector will be the driver of the economic recovery across the country" is one with which few would argue. The Bill introduces measures such as improving research and development tax credits and the inclusion of hotels in the employment and investment incentive scheme. I submit that the Minister could have been more radical in that regard. I ask him to give consideration to a new set of additional measures. Currently, the research and development credit is a function of increases in expenditure using 2003 as the base year for comparison. I welcome the limited changes in this area, but overall the incremental approach should be reviewed in light of the pressure on company budgets.

In order to encourage investment in the sector, I suggest all research and development expenditure should, for a two year period, be eligible for a tax credit, subject to EU approval. Second, the cap on outsourced research and development expenditure should be reviewed. I know some improvements were made in this area last year, but it still limits the degree to which enterprises can collaborate with universities and third level institutes in research and development activity and is inconsistent with other Government policies aimed at fostering linkages between these sectors. Third, the Minister could extend and widen the key employee relief to include companies in loss-making positions. This could be of particular benefit to start-up enterprises. The Minister has reformed the corporation tax exemption for start-up companies, which I welcome. In order to encourage the widest possible uptake of the research and development tax credit, Revenue and Enterprise Ireland should actively target the SME sector with user-friendly information guides on how the relief works.

I welcome the extension of the employment and investment incentive scheme to the hotel sector. The tourism industry is vital to the economy. It provides approximately 196,000 jobs, equivalent to 11% of total employment. Good value hotel rooms in a viable industry sector are vital to our tourist offering. However, the hotel sector faces a massive debt overhang, with many other sectors of the economy, which, if not addressed, will lead to significant job losses. We are already beginning to see this happen. Hotels in Ireland owe banks €6.7 billion, which represents a whopping €113,250 of debt on average per room. Given the current trend in profitability, we should take note of a report commissioned by the Irish Hotels Federation which indicates that the maximum sustainable level of debt per room is approximately €70,000. Therefore, the sector's liabilities need to be cut by 38% or €2.5 billion. An injection of new equity capital would be much more preferable to a debt write-down and the Minister's proposal is welcome in this regard. However, he could go further by setting up a hotel restructuring fund using funds from the National Pensions Reserve Fund, NPRF, to purchase assets that have a commercially sound prospect for profitability and growth. Alternatively, he could look to setting up a qualifying investor fund for hotels that may be attractive to private investors, especially from abroad who would like to invest in Irish hotels but do not wish to own hotels directly. As a final point on the sector I note that NAMA and the banks control 10,000 hotel rooms, representing approximately one sixth of the market. It is important that NAMA and bank-controlled hotels are prevented from engaging in market manipulating practices. The Competition Authority needs to continue to monitor for such practices and take action, if needed.

As I mentioned, I welcome the overall intention of the Minister in regard to the SME sector. However, as I said in another debate last week, without access to credit, the SME sector is going to remain in the doldrums. The report by the Credit Review Office shows just how difficult things are for SMEs. Of the total of €8 billion of new lending advanced by the pillar banks, only an estimated €2.5 billion was deemed to represent actual new lending, with the balance representing loans being rolled over. In total, both banks' SME loan books contracted by €2 billion in 2012 as the figure of €2.5 billion of new lending was outweighed by €4.5 billion in net repayments by these SMEs. Tomorrow Mr. John Trethowan from the Credit Review Office will appear before the Oireachtas Joint Committee on Finance, Public Expenditure and Reform and my colleagues and I will be questioning him on some of these matters.

I draw the Minister's attention to another issue of concern, namely, the increase in vehicle registration tax, VRT which was announced in the budget and is provided for in the Finance Bill. We know that in January, according to official figures from the CSO, sales of motor cars dropped by about one quarter when compared to the same month last year. I recognise that the change in the registration system, with cars having a 131 registration in the first half of the year and a 132 registration in the second half, may well have the effect of spreading car sales more evenly over the year. Having said that, a drop of one quarter in January 2013 compared to January 2012 is a source of major concern. I met a major motor dealer recently and we sat down and went through the figures together. He is predicting that many of the major dealers in Ireland will end up closing and that we are going to witness very heavy job losses in the sector. The Minister has pencilled in that the change will bring in €50 million in additional revenue in 2013, but those to whom I have been speaking in the industry dispute this. The Minister must monitor what is happening in the motor trade very carefully because the early signs in 2013 are ominous. He should not be unprepared to change his position if that trend continues in the next few months.

The aspect of the Finance Bill I find most disappointing is the lack of significant measures to stimulate the domestic economy. We saw a worrying development last week regarding export figures. The trade data for the month of December showed a significant fall-off in the export of goods from Ireland. Unfortunately, this is likely to feed through to weaker than expected GDP figures for the fourth quarter of 2012. If we are to avoid seeing GDP slipping back to negative territory, we need to do something to get the other components of GDP moving in the right direction, specifically consumer spending and capital investment.

We all know that the economy is suffering from very weak overall levels of consumer spending and that there is significant growth in the black economy. To tackle this, I am suggesting to the Minister that a tax credit of up to €2,500 be made available for approved home improvement works, subject to the home owner engaging a registered, tax-compliant contractor. Ideally, consumers would do this of their own accord, but sometimes one needs an intervention to nudge people in the right direction. This measure would provide a significant boost for local economies as contractors purchase goods and spend money in shops. We all know that there is a huge amount of activity in the black economy, particularly small-scale building jobs, home improvement works, renovations and so forth, and there is a way, if we use the taxation code imaginatively, to bring more of this activity into the mainstream economy. It would have the added benefit of increasing VAT and income tax receipts. We should, therefore, seriously consider this measure. In general, we should be prepared to try new things. If the Minister introduced a measure that did not cost much money but did not work, I would not criticise him for this. We must be open to considering new ways of doing things and introducing initiatives on a pilot basis to see if they would have an impact. This is one measure I encourage the Minister to consider because we all know that the major drop-off in employment levels since 2008 is mainly related to the construction sector. If we can give people a boost through a targeted tax incentive system, under which home owners would benefit, the idea has merit.

I have made reference on a number of occasions recently to the fact that the Government is gutting the Exchequer capital programme. Last year's stimulus programme was little more than a fig leaf to attempt to hide that reality.

My party regards the pension levy imposed by the Government in 2011 as fundamentally unfair. Most defined benefit pension schemes are in deficit, often substantially so. Few employers can afford additional contributions to eliminate the deficit. Many pension scheme members have already faced substantial increases in their pension contributions or reductions in benefits as a means of closing the gap in the fund. The introduction of the levy has made the already difficult situation for defined benefit schemes even worse. Existing pensioners, for example, will probably see their pension increase by less than the cost of living, if at all, as will deferred pensioners. Active members of pension schemes are likely to see their pension reduced or their rate of contribution increased. At the time the levy was introduced we pointed to its unfairness as all pension assets are fully taxed when drawn down as income. To impose a levy on pension assets prior to draw-down represents double taxation and is likely to have a very negative impact on people's retirement income and the incentive to make additional voluntary contributions. I remain very concerned that the levy will become a permanent fixture, despite the sunset clause in the legislation. What I suggested first in 2011 and repeat again tonight is that the levy be scrapped and replaced with a mandatory investment by private pension funds of 1% per annum for three years in the strategic investment fund established by the Government under NewERA. This would be an investment of €700 million per annum and could be supplemented by an equivalent annual investment from the NPRF.

One aspect of pension provisions that often discourages take-up is their perceived inflexible nature. There is an estimated €72 billion invested in Irish pension funds. Many in society face severe financial difficulties as a result of the economic crisis. In some cases, the individuals concerned have significant pension assets accumulated which they are prevented from accessing until retirement under the terms of the Pensions Act.

An OECD report stated that while care is required to ensure that people do not unduly threaten their retirement incomes, early access to pension savings should be considered as a policy option by Government to reduce the effect of cyclicality in the economy.

I believe the proposals in the Finance Bill are limited in scope and unlikely to have much take-up. Employer paid contributions, regular employee contributions, self-employed personal pensions and normal personal retirement savings account, PRSA, contributions are excluded, as are AVCs that are being made for the purposes of purchasing notional added years. I would be pleasantly surprised if the measure raises €100 million in tax revenue in the current year.

I concur with the view that limiting early pension access to AVCs discriminates against other private pension fund holders. With credit so tight, the self-employed and other business owners have as good, if not better, reasons to want some access to money tied up in their pensions. However, they are effectively excluded. We will seek to amend this on Committee Stage.

To put it at its simplest, Government policy on the health insurance levy is driving more and more people from the health insurance market. Perhaps that is the Minister's intention. It is a system on the brink of collapse. Currently, 6,000 people are dropping their policies every month. This is resulting is ever-higher premiums for the remaining customers, increasing pressure on an already stretched public health system and additional delays. As a result of the budget increase in the health insurance levy, a family of four will be paying €940 in levy charges alone.

We know now that the Government has reneged on its commitment not to extend the increase in the levy to customers with lower levels of cover. There is clearly an affordability crisis in health insurance. It would appear premiums are now going up twice a year and this is hitting hardest at young families with mortgages and high child care costs, the people who are least able to pay. According to the Department's own regulator, the Health Insurance Authority, the people leaving the market are those who are younger and healthier, and those with children.

The market has gone from being one where more and more new customers were joining, a phenomenon that supported the principle of community rating, to one where the market is declining and the very customers who are leaving are the young families who should be its lifeblood. As noted by one industry source recently:

It seems entirely lost on the Department that the best way to provide protection for the older and sicker is to ensure that younger healthier people continue to find health insurance attractive in terms of benefits and costs. You can't get intergenerational support if you drive younger people out of the market.

That comment should be considered carefully by the Minister.

The Revenue job assist scheme allowed employers a double wages deduction if they employed a person who had been unemployed for 12 months or more. I know the scheme has been criticised by industry for being too limited in scope, with most applicants not meeting the scheme's strict criteria. However, it is disappointing that no details of the replacement scheme, the jobs plus initiative, have been provided. I understand this will happen shortly, and the Minister indicated that again tonight. It is vital when it does happen that it is focused on the needs of the long-term unemployed. This is now an acute problem with nearly 200,000 people out of work for over a year. Once someone reaches this unhappy milestone it becomes increasingly difficult to get back to full-time paid employment at a decent wage level and the replacement scheme, jobs plus, needs to be sufficiently flexible to reflect the many facets of long-term unemployment, which is now a deep seated economic and social problem.

I welcome the extension of the fuel rebate scheme to bus and coach operators. They have suffered from massive increases in the cost of their main input in recent years. I am concerned about the impact on firms that do not use licensed hauliers. A small supplier of goods, such as a catering supply firm or concrete manufacturer, that runs its own fleet will not benefit from the diesel rebate and will be at a disadvantage. I ask the Minister to look at this again on Committee Stage.

As announced in the budget, the carbon tax will be extended to solid fuels on a phased basis. A rate of €10 per tonne will be applied with effect from 1 May 2013 and at a rate of €20 per tonne from 1 May 2014. According to the industry, this will add €2.50 to a 40 kg bag of coal and 50 cent to a bale of briquettes so a household that goes through two bags of coal a week for half of the year, which is not unusual particularly for those without central heating, will pay an extra €130. In addition to the obvious fuel poverty implications, how will the Minister combat the smuggling and illegal sale of solid fuel products, particularly in the Border area?

Finally, I refer to our pre-budget suggestion that a 10% levy on alcohol sales in off-licences be introduced. The proposal was a recognition that Ireland is currently seeing an increase in alcohol consumption within the home. One of the reasons often cited for this trend is the significant price differentiation of alcohol products between on-trade and off-trade establishments. Not only has this discrepancy affected social behaviour by discouraging people from consuming at public houses, but it has also been cited as a contributing factor in the rise of binge drinking and under age drinking. According to The Sunday Business Post last weekend, the Minister for Transport, Tourism and Sport, Deputy Leo Varadkar, made a similar proposal to his Cabinet colleagues before the preparation of the Finance Bill. He proposed that the proceeds of the measure be ring-fenced for sports and recreation.

There were some suggestions that the proposal was considered to be in breach of EU competition law because it solely targeted off-sales. However, legal opinion commissioned by the industry from Arthur Cox solicitors suggests that it would be feasible if the proceeds were ring-fenced for specific purposes. Assuming they are accurately reported, I welcome the Minister for Transport, Tourism and Sport's views and I think this is something that we should consider again.

The Minister's references to bond options and the reduction in the cost of borrowing are welcome. The real benchmark in that area will be when the NTMA goes into the market and sells a ten year bond at 4% or thereabouts. That is something the agency is actively considering. I would encourage it to do so. It would send a strong and powerful signal to the markets that Ireland is on the brink of successfully exiting the programme and being able to fund itself on the international markets. I hope we see such a move by the NTMA in the very near future.

We look forward to debating the measures in detail on Committee Stage.

I thank the Minister for his Second Stage speech and I welcome the opportunity to respond to it. As he began his contribution, the Minister took the opportunity to reflect on recent developments. Given the state of Ireland's economy, the fact that we did not incur a loss in the sale of Irish Life and that the dividend to be paid should nearly equate to the interest we would have had to forgo in investing the €1.3 billion is to be welcomed. I agree with the previous speaker that we need more detail to see if this was the best type of investment, but the fact that we have not lost on it has bucked the trend of some of the financial institutions we have had to take on board in the past number of years.

There are serious concerns about redundancies. The statements are clear that voluntary redundancies are being sought. There are already estimations of savings of €40 million from the merger of Canada Life and Irish Life. There are fears that these savings will necessitate compulsory redundancies. I hope there is agreement and that the Government has ensured there will be no compulsory redundancies. What will that mean for job prospects in the future?

The Minister commented that the development illustrates that there is value in the State's holdings in Irish banks and that the Government will sell these assets when the price and time are right for the taxpayer. That statement is factually correct. My party and I have never disputed the fact that there is value in the banks. The National Pensions Reserve Fund currently values them at between €9 billion and €11 billion.

The Minister says the Government will sell these assets when the price and time are right. There is a significant expectation that the retrospection of the deal, in terms of separating sovereign and banking debt, is what we will achieve and that the ESM will purchase these for historic prices. I have concerns about the Minister's statement. Deputy Michael McGrath and other Deputies who are members of the Joint Committee on Finance, Public Expenditure and Reform have heard the banks say that if there is an investor, they will sell their assets. I worry about how that would play out in terms of trying to sell assets for more than their current market value. The investment was far superior to the current value.

In saying that, this is the Minister's second Finance Bill, and it is one of three Bills that cement the budget for 2013, the second austerity budget presided over by Fine Gael and the Labour Party.

When the Finance Bill 2012 was published, the Minister claimed he was making good progress in implementing the programme for Government. I am struck by the Minister's continuing references to the programme for Government. This programme, written by two parties that had received a huge mandate from the people, contains laudable sections, but I wonder if the Minister and I are in possession of the same document. In the programme for Government to which I have access, there is a statement that the outgoing Fianna Fáil policy of blank cheques for banks would be ended and we would step back from the edge of national insolvency. What happened last week, where the Government took on the debts of Anglo Irish Bank and Irish Nationwide Building Society in the form of a sovereign bond that writes the total on the cheque for once and for all and takes on the liabilities, making good the letters of comfort sent by the Minister to the Central Bank? The Minister continues to keep the coffers open for the banks and the bondholders.

The parties also promised in the programme for Government that there would be an end to asset transfers to NAMA because they were unlikely to improve market confidence in either banks or State. We all know that last week assets were transferred to NAMA from IBRC that totalled about €16 billion. The programme for Government contained a promise that a strategic investment bank would be established - that was a major pillar of Labour Party policy - but the Minister and I have had more than one exchange on that and we all know it will not happen any time in the near future. Its precursor has not even been brought forward in legislation despite it being announced over a year and a half ago.

The programme outlined how all remuneration schemes for banks subject to State support would undergo a fundamental review to ensure an alignment of interests between banks, their staff and the taxpayer. I know that the Minister will say we have to await the Mercer report. We were told it would be here by the end of the year but now we are told the Minister has access to the report. While the Minister is toing and froing, one of the banks that was subject to that review no longer exists and, lo and behold, the Minister was able to confirm today that some of the senior executives, despite losing their jobs in the liquidation, are now back being employed by the liquidator.

These are the commitments on which the Government claims to be making progress. Another commitment in the programme for Government is that any site valuation tax must take into account the significant number of households in mortgage distress. I will come back to that promise in detail later. The question can genuinely be asked if I have the wrong document or if the Government still maintains its progress in some of these programme for Government commitments.

Turning to the Bill itself, a Finance Bill should do a number of things and I want to give my overall impression of what the Bill does and does not do. A Finance Bill should, in times of recession anyway, contribute to reducing the deficit. Does this Bill reduce the deficit? One could argue it does, even if it does not do so in a way that I would agree with or support. A Finance Bill should stimulate economic activity and support business. Does this Bill do that? It certainly attempts to support business and there are a range of business measures in it, some good and some bad. It definitely fails, however, to stimulate the economy and certainly fails to stimulate domestic demand.

While there are some good measures for business in the Bill, they are no substitute for a real and meaningful stimulus, such as the one my party presented to the Minister last year in our jobs action plan "Create Jobs, Create Growth". That plan required actual spending on infrastructure creation which would have assisted business and created jobs, as well as a series of measures, such as abolishing upward-only rent reviews, that would have saved many businesses from closure. Deputy Michael McGrath was right; the Government has butchered the capital budget and continued what Fianna Fáil was doing before it. Capital spending has fallen from €10 billion to €4 billion, with the present Government responsible for €2 billion of that reduction.

The Finance Bill should also act to ensure redistribution. It should have at its heart a policy of fairness. Does this Bill do that? Clearly, the answer is "no" unless we believe redistribution should have some sort of reverse effect, from the bottom to the top. As it was last year, this Finance Bill is a disappointing missed opportunity.

I live in the real world. In the budget the Minister had the chance to reduce the deficit fairly, to stimulate business and to ensure that middle and low-income families were protected from the worst of the necessary financial adjustment. Because I live in the real world, I submitted a budget alternative to the Department of Finance. I know the Minister receives hundreds of these submissions each year and I know many of them are unrealistic, demanding as they do provisions for vested interests without any interest in how those provisions are funded. The budget I submitted, however, was tough but fair. It contained a series of measures to meet the budget target of €3.5 billion, from tax proposals to savings in the public spend. It did this without targeting the vulnerable and while supporting families and mortgage distressed householders. To protect these groups, it sought tax increases from higher earners, a fairness in the tax code and an end to the gravy train for politicians and top grade civil and public servants, to name but a few measures. All or any of these could have been done in this Finance Bill but the Minister and his colleagues in Government chose not to.

I am reminded as we stand in this Chamber tonight that by the time we debated last year's Finance Bill, the Government had been forced into several U-turns because of measures announced in the preceding budget. The attempted cuts to people on disability benefit and the cuts in funding for disadvantaged schools - both proposals from Labour Party Ministers - had to be shelved. That was a good thing. The cuts should never have made it on to the agenda but a U-turn was better than forging ahead with something so deeply unpopular as to be unsustainable.

Unfortunately, no such wisdom has been shown in the two months that have passed since the announcement of the budget for 2013. For example, despite a collective and emotional campaign against the cut to the respite grant, the Government has stayed determined to implement that cut in its entirety. The line has been that there is nowhere else that sum of money could be found, but here we have a detailed Finance Bill that has numerous additional new sections to those that were announced in the budget. Many of those new sections, if they come to fruition, will entail additional costs to the Exchequer. There is no money to reverse really harmful cuts such as that to the respite care grant, but other measures have been inserted without any proper costing. That is simply not acceptable.

The Minister argues that they are an essential cost in that they assist business or indirectly foster growth, and I am sure that is true in some but not all of the cases. They are a cost none the less. How is it that the Minister can find money for these measures but not to reverse the respite grant cut? I am particularly concerned that the Department does not seem to be able to put a cost on these new measures, a trend that is apparent time and again. Last year I asked for the Finance Bill to be costed section by section and that could not be done. During a briefing on the Bill today, the officials, who otherwise did an excellent job answering questions as thoroughly as possible, could not tell me an estimated spend for a number of these sections. In some of the sections there will be an expansion of measures that were introduced last year even though there are no data that show the effectiveness or cost of those measures in the last 12 months.

The Minister cites our overall growth projections and deficit targets as justification and vindication of his second austerity budget. We are all agreed we need good economic indicators, but these figures mean nothing if they are having no tangible impact on people's real lives. They might mean a lot to people examining the economy who are trying to steer the ship in the right direction but mean nothing to those trying to get by day by day.

Does he honestly think that anybody adversely affected by budget 2013 cares if he is pleased that we are in line with the troika targets or that he has met the budget adjustments this year set by the troika? They do not care about any of that because numbers are meaningless to them. They are interested in impacts and results. If the result of the Finance Bill and the budget is to improve their lives, then they and I will believe the Minister has done a good job. If the Minister announces a new measure in the Finance Bill which he considers absolutely necessary to improve the economic realities of those across the State and his measure works as he says, then he has done a good job.

However, to date, the Minister has not done a good job. I will use the example of one of the new measures announced last year, the special assignee relief programme, SARP, because the Minister announced this with much fanfare last year and dedicated a large section of his speech to its introduction at budget time. This tax-free clause was to be the measure that attracted high-powered executives to Ireland to stimulate economic activity and create jobs - we all will be aware their children got free fees, or they got tax reliefs against their fees and flights to and from America or from wherever they came.

The Minister told us that SARP would place us up there with our tax competitors, who are becoming increasingly more clever than us in the race to the bottom to attract FDI at any tax cost. When I tabled a parliamentary question in October to provide an update on SARP given that it was such a central element in last year's Finance Bill, including the number of persons who have availed of the tax relief, the total amount of relief awarded and the number of jobs that have been directly created as a result of this relief, the Minister could not give an answer. In fairness, I appreciate that many tax measures can only be viewed in their totality after being one year in effect and I tabled the question today to see if the Minister can give me an answer. There was much hubbub about this being tied to job creation, etc. The Minister also must be honest. He touted this scheme as an essential new additional spend to budget 2012, for all the reasons that I have already outlined. With a scheme as important as he told us this would be, I am more than a little surprised that he has not monitored it more closely to see how successful it has been. I am also more than a little curious to see how much it has cost and how many jobs it has created.

The impact of SARP might not be clear, but there are some facts at our disposal. For instance, since the Government has come to power 20,000 jobs have been lost in the economy and long-term unemployment has increased. Also, in the same two years, 167,000 people have emigrated, 70,000 of whom are from within the 15-24 year demographic. We also know that over the past year IDA created just over 6,570 net jobs. Armed with facts like these, the Minister can understand why anyone would be sceptical about how effective this Finance Bill will be for the economy as a whole.

There can be no denying that this Finance Bill is oriented towards a section of the business community. I am acutely aware that the economic strategic policy of the Government appears to rest, not merely on a hope and a prayer, but on an ever accommodating tax code for the international business community so that it will come flocking to Ireland's rescue. Such a policy has its work cut out for it. The City of London, the Dutch and Singapore are all adapting their tax systems and attempting to outstrip Ireland as a tax-friendly location for business. It is most important that we continue to offer a competitive regime to attract foreign direct investment into this State but the attractions should include more than just the tax code. They should also include first-class infrastructure, world-class graduates and a society to which any high-flying executive would want to move his career and family.

That said, I am concerned that in the Bill, and in the Department in general, there does not seem to be a policy on an effective rate of taxation for business. There is much discussion about this and the failure of the Minister to deal with this in the Finance Bill is seriously questioned. I have asked parliamentary questions about this in reply to which the Minister has been less than forthcoming with his information, and yet across the world, from the OECD to the European Commission and economic forums of world leaders, this issue of Ireland's business tax rates, and the lack of an effective tax rate which allows major companies to pay a very small amount of taxation using schemes and loopholes, has been dominant.

Everyone wants business to succeed and be accommodated, but there is a growing consensus that this cannot be done at any price. It is not bad to use finance legislation to deal with the tax system to attract business, but it is limited in its applications. It is clearly something on which the Department is lobbied quite intimately by certain vested interests.

As I have stated, I do not object to this if the results of it are positive for all of the people of Ireland, but I question whether there is equality of opportunity to lobby the Department. When an auditing firm or a stockbroker sends the Government its list of tax incentives needed to facilitate business, does it receive the same level of attention or more than the submission from the respite carers' group that tells the Minister the cut to its grant will not only decimate its quality of life, but probably end up costing the Exchequer more? That is merely an example of what the people will wonder when they see the contents of this Bill and the boxes it ticks and does not tick. There are many other examples.

It is a public expenditure issue.

I use it as an example of the access to corridors. I understand that it comes from others but it is part and parcel of the budgetary proposal.

The Bill does tick some boxes. In the past, the Minister has presented me and my party as negative when we were attempting to constructively criticise legislation. We all will be aware that is a political ploy and it is par for the course. He will be aware that we have never shied away from welcoming measures for which we ourselves have campaigned.

The increases in capital gains tax and acquisitions tax are positive moves. I welcome them, even if they do not go as far as we would like them to go. I also welcome the further clamping down on some tax avoidance measures, such as the withdrawal of the foreign service relief for ex-gratia payments and the implementation of stamp duty anti-avoidance measures. I welcome the extension and improvement of start-up relief, as long as it continues to be tied to job creation. The changes to how employees' benefit trusts are treated for tax purposes are a positive move.

I am glad to see that the Bill contains excise duty relief for hauliers and transport providers. The relief for hauliers is something for which we called in our jobs action plan last year and I, too, believe it has the potential to be revenue neutral. Significantly, the tax treatment allowances for civil partnerships are necessary and good and welcome news. There are other parts to the Bill that also would merit welcome.

However, there are some features in the Bill over which there are question marks. The establishment of real estate investment trusts, REITs, has been widely welcomed by the property analysts and numerous economic commentators. I have some concerns and questions about these entities. I recognise that these are functioning in many jurisdictions and, in many cases, successfully so. They have been established in the United States since the 1960s and over the past decade a plethora of countries have started to introduce them. Essentially, these REITs are investment vehicles and the level at which the investment is set, and the cost in that regard, will be a determining factor.

There are also questions regarding how the Minister has set these investment vehicles up. One of the concerns is that the REITs, as entities, thrive in low-rate environments. They have sprung up in distressed property markets worldwide to take advantage of collapsed property prices and while they may encourage some recovery in property prices, they also have many of the warning indicators associated with bubble investment vehicles. I am concerned that this State may be hopping on a bandwagon that has already pulled out of the station. I question that the Minister set the dividend at 85%, given that, I believe, Britain and the United States have set it at 90%. There also are questions regarding the mixed assets and that the legislation seems to lack any meaningful asset test to protect potential investors. These are some issues which we will be able to address in more detail on Committee Stage.

In addition, the changes to research and development tax credits for employees give rise for concern. If this tax credit introduced last year was to accommodate companies engaging employees for research and development, why is the portion of those employees' research and development work being reduced, from 75% to 50%, in the Bill?

Why was this not spotted last year? What is the thinking behind it? There are no quantitative data on how the scheme introduced last year is playing out today.

I question the living city initiative on which I have serious reservations. Regeneration of urban centres is absolutely crucial. In Sinn Féin's jobs action plan, we proposed the completion of the Limerick and Dublin regeneration schemes as a socially-friendly policy leading to job creation. This is regeneration of housing estates that have been crying out for help for many years and have been ignored by successive governments and finally we are seeing some movement.

The writing-off of tax over a period of years to renovate what is probably a small number of Georgian houses in two counties looks and smells very much like section 23, and does not make sense. This clause allows up to 100% tax back over ten years of an investment in an asset that one can use for retail purposes as well as for living in. There are serious concerns over why the State would provide such support for somebody who is developing the bottom of a Georgian house into a retail unit, thereby putting the next house, which is not Georgian, in the same street at a complete disadvantage. It skews the market terribly and also allows for somebody to invest huge amounts of money. While there is a threshold that it must be 10% of the market value, there is no cap on the amount of upgrading works that might be carried out to such a Georgian house and qualify for the tax break. This means that the State is potentially giving hundreds of thousands of euro to people to fix the upper storeys of a Georgian house for living accommodation and the basement and ground floor for retail use. That is seriously questionable.

The cap is the tax liability.

However, if their tax liability is high enough that is basically it. While there is a minimum threshold there is no maximum. I do not live in Limerick and have not spent much time there but I have been around the city and seen the accommodation in Moyross. Many people there would love the Minister to be announcing that if they carried out upgrades to their houses, the Government would write it off from their tax liability for the next ten years. This clause basically provides for a grant to repair a house by way of tax foregone. The people who own Georgian houses are able to avail of this provision but the people in social housing or normal houses are unable to avail of it. Indeed the Government is asking them to pay a property tax, either through increased rent in social housing or directly via the property tax. This is seriously questionable and I do not understand the rationale behind identifying a select number of properties. Just selecting people in Georgian houses does not make sense. If the Government wants an area-based scheme, it should specify an area-based scheme. Why restrict it to Georgian houses? Why put no upper limit on it? At a time when the Government is asking 1.8 million homeowners to pay additional tax, why is it effectively providing 100% grants for people who own Georgian houses and are willing to live in them to renovate and upgrade them? It stinks to high heaven. These are some of the issues that we will also go through later.

The largest tax take this year is planned to come from family-home tax, and I will deal with this in a moment. The Bill contains several measures to increase indirect taxation, namely through excise duties and a change in certain tax treatments. One of the more notable changes is the taxing of maternity benefit for new mothers and the Minister has added to this by taxing adoptive benefit, and health and safety benefit - a payment paid to expectant mothers and breastfeeding mothers who cannot be accommodated in their workplace. These payments were traditionally left untaxed. Last year, I said the Government would probably do this and this is what it has done. They were left untaxed in recognition of the cost incurred by mothers and families when bringing a new baby into the household. It was interesting to hear the Constitutional Convention at the weekend discussing the clause on facilitating mothers to stay at home and its decision to bring that clause into the modern age. It was interesting because the Constitution has a specific clause to facilitate mothers in the home and yet, the Government has step-by-step tried to dismantle the financial support mothers and parents receive when having children, ranging from the measures we are discussing now to the constant attacks on child benefit in the Social Welfare Act and what has been reported in the media in the past week.

The Bill also legislates for the provisions in the budget to increase excise duty on alcohol and cigarettes, to increase VRT and to extend carbon tax to solid fuels. These tax hikes all tend to hit middle and lower-income consumers disproportionately. The Minister is aware of this, yet each year he goes back to the same pockets and tries to squeeze a little more.

I am particularly concerned at the changes to VRT. Motorists and the Irish motor industry have been really feeling the effects of the recession. Fuel hikes, motor tax hikes, the licence fee hike in this Bill and diminishing income have all hit car sales and employment in the industry. The Irish motor trade continues to be a key employer across the State but it has been seriously hit by the recession. At its peak in December 2007, this sector accounted for 49,600 employees, but the industry had shed 14,300, 29%, of its workforce by the end of 2009. The increase in VRT is devastating for a fragile industry and the biannual number plate will not negate the impact of increased VRT rates.

While it is not addressed in the Bill, the Minister missed an opportunity to bring fairness to the motor tax system. I support the sub-classification of the bands, but this should have been done in a way that reduced the tax for small and family cars and increased it substantially on expensive cars. The environmental goal of forcing the car industry into making its models carbon efficient has succeeded. Now the Government should address the disparity that exists in the motor tax system whereby someone who owns a Nissan Micra is paying the same motor tax as someone driving a Volvo V50.

This brings me to everything that is missing in this Bill.

The Deputy should conclude.

The Minister hopes to bring in a large portion of tax this year from the family home tax. The programme for Government specifically stated that any property tax would take into account the significant numbers of people in mortgage distress. Our Private Members' motion tonight is about mortgage distress and removing the bank's veto. Some 115 households fall into mortgage distress every day and the Minister plans to impose an additional burden on them. There is a different way to do it by introducing a proper property tax, which is a wealth tax. A wealth tax operates in many OECD countries, including France, Norway, Sweden and Iceland. I produced the legislation which is open to be amended and shaped in whatever way the Government wants. This is what governments in other countries are doing. The Spanish Government has recently reintroduced a wealth tax and the Liberal Democrats in Britain advocate one. The main opposition party in Germany, the SPD, is committed to introducing such a tax if it gets into government. This is what the Government should do instead of penalising householders across the State because they have a roof over their heads.

I could elaborate on other measures in the Bill. I believe it is a missed opportunity. As I mentioned earlier, the Bill has some positive aspects that will, hopefully, have some beneficial impact on the economy but they are too small and too far between and do not negate the seriously damaging policy of austerity. On the whole the Bill is a missed opportunity and underpins the austerity policy of the Minister's party and the Government.

I call Deputy Boyd Barrett, who is sharing time with Deputy Mattie McGrath.

I have very little positive to say about the Bill, so I will say the one positive thing I can think of. I wish to commend the Department of Finance officials on the obvious hard work they need to put into preparing what is clearly a very technically complex and mind-bending Bill. They do so every year and deserve great credit. They were very helpful in answering some of my questions this afternoon and this evening.

The conclusion I have drawn from my reading of the Bill is that there is not an awful lot in it. To my mind, that is the biggest problem with this Bill. I do not want to reiterate the point I made earlier on the Order of Business in regard to the timing of the introduction of this Bill, except to say that its introduction late at night is connected to there being nothing much in it. It smacks of manipulation of the debate around what is a critical issue about which every citizen of this State is concerned because of the severity of the crisis we are in, namely, the financial state of this country, and the measures and proposals being put forward by the Government in terms of offering relief, hope and a strategy for getting us out of that mess. This Bill is being introduced late at night precisely because it does not do that.

I will be in London during the next three days on Government business. If I had not introduced the Bill tonight it would have had to be introduced by a Minister of State. I wanted to introduce and speak on the Bill.

I have heard that. However, I am unconvinced. I am not aware of the Minister's schedule or meetings in London. Perhaps he can tell me about them afterwards. Maybe he will convince me.

This is the second time in two weeks that we have dealt with critical legislation dealing with the finances of the State at a time when they are in the worst state they have ever been in the history of the State. To my mind, it is problematic that this should happen twice in two weeks into the early hours of the morning. I see a connection between what happened two weeks ago and what is provided for, or not, in this Bill. Two weeks ago the Government used a late night session of the Dáil to present as a great victory a Bill which was in reality simply a repackaging of the treasonous decision of the previous Government to pin €30 billion worth of the gambling debts of former Anglo Irish Bank to the backs of the citizens of this State. The Minister presented that repackaging as a great victory and implied that there was something in it for the citizens of this country and the economy when the real substance of what went on during that late night session was that the Minister confirmed the disastrous decision made by the previous Government, legally committing us to paying every cent of those gambling debts and guaranteeing we are facing into long-term economic stagnation.

The quid pro quo of making that commitment is that the Government now has no room to manoeuvre. That is the point I am making. The reason there is nothing in this Finance Bill that will make any substantial difference is because the Minister has given away all of our room to manoeuvre. What he should and could have done, much as he protests it is impossible and so on to do so, was said that these are not our debts, that our economy cannot afford to take them on if it is to have any hope of economic recovery and if he, as Minister for Finance, is to have any room to manoeuvre to propose measures that could help stimulate the economy and economic growth, and that we will not pay them. To put it simply, because of the guarantees given, this Bill can offer us nothing.

Furthermore, as if committing to paying off Anglo's debts was not bad enough, it has emerged during the past two weeks that even the short-term savings, about which the Minister was crowing two weeks ago we would get in 2014 and 2015, cannot be translated into any measures which make any substantial difference to the citizens of this State. It is somewhat debatable if these short-term savings even exist. It is clear that even if they do, and if the Minister's arithmetic is correct, they cannot be translated into any reversal of proposals to introduce a home tax, water tax or previous austerity measures such as the universal social charge imposed on low and middle income families, all of which not only ensure people suffer but are utterly destructive in terms of the domestic economy and its capacity to recover. The Government claims that none of these savings can be used for public investment programmes or to prevent the troika demanded sale of State assets, which to my mind are sales which move us precisely in the opposite direction to that we need to go if we are to have any chance of economic recovery.

I would like to comment on the sale of Irish Life. I do so not for the sake of it but because I believe somebody needs to puncture the consensus. I cannot believe the Government is congratulating itself, that Fianna Fáil is congratulating it and that, more astonishingly, Sinn Féin is giving a cautious welcome to the sale of Irish Life. It beggars belief. We propose to hold on to all of the institutions that are broke, insolvent and have bad debts and to sell off a State asset that is profitable, resulting in the loss of a couple of hundred jobs, it being asset stripped and all of the profits derived therefrom going to somebody else. How on earth is this a good deal for us? I do not get it. Private financial institutions committed not to the interests of this State or its citizens but to profit caused the financial crisis. The Government now proposes to privatise a profitable financial institution owned by the State. It is beyond belief.

The Minister's comments that this package is part of a general situation about which we should be optimistic and that things are slowly moving in the right direction are utterly unconvincing. The reality is that the key decision made by the Minister ensures there can be no development or growth in the domestic economy and no improvement in employment. What we are left with is a few gestures, which I welcome, which are marginally progressive but almost meaningless in terms of what they will gather for the Exchequer.

These include increasing the level of universal social charge on people over 70 who earn more than €60,000 a year and increasing the level of the universal social charge on self-employed pensioners with more than €100,000 a year. This is progressive, but so small as to be utterly insignificant.

I do not agree with tax incentives because they are focused on the same premise which caused the crisis in the first place. This premise is that we need to incentivise parts of the private sector to deliver the investment and growth the State itself is not willing to provide. Even here, the measures are marginal. They are small tweaks in the research and development credit, the foreign earnings deduction and the living city initiative which, frankly, is a bit bizarre and the Minister will have to explain this one. Why should people with Georgian houses get a particular tax break? I live in Dún Laoghaire but I do not see its logic. The Bill also includes tax breaks for the aviation industry. Aside from the specifics of these measures, the problem is they are part of the same failed approach whereby in so far as we can do anything, it is about incentivising the private sector.

These are small tweaks and extensions to the much more fundamental policy, which the Minister has refused to examine, of stating we must keep tax on the corporate sector low. This means if we must levy taxes they must be levied on low and middle income workers. The most important dimension of this comprises the universal social charge, which is destroying people, the household charge and water charges. Whatever we do we must not look at corporate tax and think about increasing it or even forcing the corporate sector to pay the 12.5% it is supposed to pay. This is what the Bill should be examining and what we should be discussing. We need serious interrogation on this and we will deal with it on Committee Stage.

The sacred cow that low corporate taxation was the key to our economic success could possibly stand up during the period of the Celtic tiger, but four years after the collapse of the Celtic tiger can we really say this sacred cow should not be questioned? The Minister's red-line protection of low corporate tax rates has delivered nothing in the past four years in terms of economic growth or employment. The Minister claims a marginal increase in the export sector, but this is at the expense of the domestic economy. There has been no net increase in employment. This is not a vista of hope for anybody. I propose the Minister examines whether we should do things the other way around and that we have a serious debate on this. The universal social charge should be removed from people earning less than €60,000 a year, which would cost approximately €2.5 billion, and taxes on the corporate sector and those earning more than €100,000 a year should be increased by €2.5 billion. This would be a combination of higher income taxes and increasing the effective tax rate paid by corporations. This would do more to stimulate the domestic economy by creating demand on the high street and by providing us with funds for a public investment programme which could stimulate growth.

I am pleased to speak on the Finance Bill 2013. As I did this morning on the Order of Business, I object to the time the Bill was introduced tonight. It is disappointing. I recognise the Minister has a heavy schedule, and I understand he wanted to be here, but perhaps we should have moved to London with him for the next three days to debate it there or, more appropriately, we should have moved to debate it in the German Parliament because we are being dictated to and our hands are tied with regard to what we can do here. I know the Minister inherited it from the previous Government but he knew what he was getting into. He had the books and made his predictions and promises.

The Government did not have to promise anything, as I have stated many times, as it would have been elected anyway. The Government has the finest mandate any Government ever received and it has thrown it back in the people's faces. It accepted carte blanche diktats from Europe and the European Central Bank. Last week a wonderful deal was announced, but now we do not know whether it is on or off. The Minister's colleague in the European Parliament, Mr. Gay Mitchell, MEP, asked questions yesterday and Mr. Draghi could only say he would have to wait and see later in the year and there may be a court challenge. Some friends we have in Europe, and I have stated this since the previous so-called bailout which the former Minister, Mr. Lenihan, brought home. I described it as a clean-out. We had to put up €17 billion of our own funds. This was an attack on us. I voted in favour of it and I have apologised for this several times because it was the biggest mistake I made. I was told if I did not vote for it we would face the abyss. How much worse could the abyss have been? It could not have been any worse than this. We have absolutely no solidarity from other European parliaments. The Taoiseach continues to be the poster boy of Europe and be patted on the head and thanked, but this is real politics.

I welcome one or two small items in the Finance Bill and the budget. A fuel rebate for road hauliers was introduced in the budget. This is something for which we fought for years and the previous Government failed to introduce it. I welcome this. I also welcome the inclusion of school transport and the bus fleet in an amendment. I will table an amendment on agricultural contractors' diesel because the contractors are being penalised. They have huge credit problems and have suffered from the bad weather of the past 18 months. They are a vital cog in the wheel of delivering a productive agriculture sector. We have had discussions and Government backbenchers have met a group of farm contractors. The Government speaks about Food Harvest 2020 and Ireland's recovery being based on agriculture. Agriculture has a huge role to play and it brought us out of the last two recessions. It will also bring us out of this one and there has been a small pick-up. If we have good weather this year we will have a good season. The agricultural contractors are represented by a professional organisation covering the 32 counties and I plead with the Minister to accept the amendment I will table on agricultural contractors' diesel.

I do not want to come here to knock everything, but I must mention the lack of a fuel rebate and the carbon tax on a simple bag of coal, and the short number of weeks covered by the fuel voucher scheme. The Minister is being lobbied by my former colleague, and former Minister of State, Sean Connick, and the fuel industry. To increase the cost of a bag of coal by €2.50 and the cost of a bale of briquettes by 50 cent is a retrograde step. People buy a bale of briquettes every couple of days because it is all they can afford. The increase in cost is very foolish.

In recent years I have proposed a tax incentive for ordinary homeowners who want to upgrade their houses, such as through retrofitting for green energy and solar panels or upgrading them through extensions. Allowing people to claim a tax deduction on these would kill the black economy and stimulate the economy. It would also support small builders and tradesmen who are on the dole queues. It would provide much needed money for the Exchequer and get rid of the rogues and cowboys in the black economy. I do not know why the Minister does not do this.

For the past four years I have also proposed, to the Minister and his predecessor, an increased tax on alcohol sold in off-licences because drink is too freely available at every street corner, shop, supermarket and filling station. God help anybody suffering from alcohol addiction if they are off it, because drink will be in front of them anywhere they go to buy a loaf of bread or petrol. It is wrong. The supermarket lobby is now stronger than the vintners' lobby, which is a sad day for the country. At present we have a scandal with horsemeat. The large supermarkets are too powerful and are calling the tune. At least €1 billion in revenue could have been taken and it would also have prohibited some younger people from buying alcohol and drinking it in unsupervised places. I have teenagers and I understand the problem. The Minister's family is a bit older but he knows what I am speaking about. The supermarket lobby won the day against the vintners. Every pub pays rates, taxes, wages, bills and VAT. The vast majority involved are genuine businesspeople who uphold the laws on underage drinking, but they are not thanked for this or supported.

In Germany in the early 1930s, before the rise of you know who - I will not mention his name - certain kinds of policies were pursued, and we are going that way here now. Our democracy is being eroded. The Minister got the mandate but he is not responding to it. He has flung it back in people's faces. People voted for him because of what he said he would do, but now he is not doing it.

Ten days ago, special provisions were brought in here. We should have learned from the last time we did it in 2008. Bad law is made in the middle of the night. It is ridiculous to come here at this hour. I was due to speak at 12.40 a.m. on the Finance Bill. We can talk about many Bills and people outside the House are watching us, but this is not the way to do business. I appreciate that the Minister has to go away and I know how hard he is working, but we have to be real. We should show cause to the electorate as well as listening to them, empathising with them and understanding them.

I mentioned what happened in Germany, and some of the measures in the Bill will stoke a fire in ordinary people's lives. We should not be doing that. We have become regressive. On the one hand, we have gone like communists, while on the other hand we have gone so right-wing, we do not know whether we are coming or going. Democracy, however, is the last thing on our minds.

I complimented the Taoiseach on his sincere apology for what happened several decades ago. The Tánaiste was claiming that Labour had brought about all this change, including NewERA. However, he blackguarded the fund the Oireachtas passed for the children's referendum. The Government literally stole €1.1 million of it. I am not saying that, but five Supreme Court judges said so. We should pay heed to democracy because there is no point in having tokenism. We are supposed to be in a democracy so we should listen to the people.

There is too much interference from Big Brother. The property tax is coming and the Government wants to put the Revenue Commissioners into people's homes. In my home they are there already because I operate the self-assessment system. They can come at any time to check my books, which is fine. I am a self-employed practitioner and Deputy Mathews would know what I am talking about. Others pay by PAYE. There is a buffer, however, and our houses are our castles and are sacrosanct. Why should we expect a house buyer to report on a seller? That is snitching and informing. I support the Garda and wish to banish the word "informer" in fighting crime, but this is getting worse. The Revenue Commissioners have a job to do, but they cannot get powers to enter our bedrooms, kitchens and utility rooms. That is over-regulation with the State becoming too powerful. It will not be accepted.

The Minister is putting capital gains tax up from 30% to 33%, but who is advising him? I pay tribute to the departmental officials - as did Deputy Boyd Barrett - for their work, but who is advising the Minister? It is not any shopkeeper or businessman because nothing is happening. There is no stimulation or spending, so how does the Minister expect to increase capital gains tax to bring in €60 million? It is not going to happen, full stop. The Minister should ask anyone in the high street or back streets. It has not happened and it will not happen.

I supported the previous Minister for the Environment, the former Deputy John Gormley, as well as the former Minister for Finance, the late Brian Lenihan, when they introduced regulations for low emissions cars. They encouraged people to buy new cars and the scheme was supported by the Society of the Irish Motor Industry. The motor industry lobbied for it and it was introduced as a fabulous success, but what happened? The current Minister has broken a solemn commitment given by the previous Government that if a person bought a low emissions car, the tax would be low. That argument has been dismissed, however, and it is a total breach of faith with the electorate and the public generally. Where is the contract and bond with, and the respect for, the people? We cannot expect the public to take this seriously. In good faith, thousands bought low emissions cars in return for low car tax, thus stimulating the economy and keeping jobs in the motor industry. Now, however, taxes have increased across the board.

On the night of the budget, I said the Minister would tax shrouds or habits next. He has increased the tax on hearses this time. Nothing is sacred for this Government. I am not being insulting or disparaging to the Minister, but it is old hat from Fine Gael. It is the party of big people and has refused to introduce a wealth tax. It is the party of the landed gentry and is proving that all the time by taxing ordinary people.

The Government has said that if gardaí and other front-line workers do not participate in the Croke Park talks, it will legislate for pay cuts. The Taoiseach has said it. The Minister of State, Deputy Brian Hayes, has also said it. Those are bully-boy tactics, trying to frighten people, which happened in the time of the Blueshirts. Those days are gone, however, and we must have consensus. We must also have honesty, openness and respect in order to bring the people with us. The Minister is not doing that. There are no incentives or any room for people to do anything. Worst of all, we cannot make agreements in one budget and then break faith with them in the following budget. What kind of sour taste does that leave in the mouths of the electorate? It is no wonder we have seen a rise in extreme left-wing parties.

I totally resent what Deputy Adams said earlier, that we should all be breathalysed coming here tonight. It is the second time he has stated that in ten days. If that is the way he behaves up North, that is fine. I do not wish to tell him what he should say up there, but I resent what he said here this morning. I resent many of the cheap, snide remarks of Sinn Féin and their cheap policies. They have answers for everything, but in reality they have answers for nothing because their policies do not stand up in any shape or form.

Several attacks have been made on working people, including those in small businesses, which are on their knees. How does the Minister expect them to pay the property tax or the water tax? People are living on diminished incomes. A friend of mine, who used to work for me 20 years ago and is now a local authority employee, phoned me this evening. He said he had not had a pint since 24 December because he cannot afford it, that he gets up every morning and is glad to have a job to go to, but that it is diminishing and he wonders how he is going to pay the tax. I do not know why the Minister cannot see that by now. This is because of the troika.

The Minister should release ten or 20 officials from his Department and send them to any rural town or village. They would see the closed shops and the lack of investment and spending power by ordinary citizens. They would see the austerity that has come with negative policies. The Minister should go back and tell the troika about it. If Mr. Draghi talks about a challenge in the courts, the Minister should tell him that he will go back to the people, put it to a vote and do the decent thing. We know what the people will say: that we have a democratic country, or are supposed to anyway, which is run autonomously, and that we cannot take any more austerity or put any more penury on our people.

We have seen the flight of the earls, with hundreds of thousands of people leaving. We have suicides and all kinds of trauma visited on us. The Minister knows this better than I do. It is happening in his constituency and in mine. On Saturday evening, I was at the household of a 29 year old who had committed suicide. It was a lovely new house, with a young child and a partner left behind. The anger I felt because of the problems arising from austerity was palpable. People invested in good faith during the boom, although I know some of them were unwise given the amount they had borrowed in mortgages. None the less, these mortgages were shovelled at them by our banks, and by European banks when our banks ran dry.

That is why I am saying that we do not owe the money the Minister has committed to paying over 35 years. The Minister said he bought his house in 1964 or 1965. God rest his good wife with whom he reared his family. He paid off the mortgage and he mentioned that 25 years later it was only a month's wages. I accept that but he had a house at the end of it. Thank God he has a house and a family. What will people have after paying all of this? They will have nothing. The evaporation of tax, hard work and sweat is driving our people to despair. The Minister is killing the entrepreneurial spirit of business people. If we do not have entrepreneurs, we will have nothing.

I was one of those but I am fairly battered at this stage after 32 years in business. We need a fresh start and must educate our young people to have the courage, passion and vision to progress in various capacities in business. They will all leave the land, however, due to the lack of incentives. They need decent chances and breaks. They need to be rewarded for their work and, above all, to be able to employ people and have respect. It has nothing to do with Croke Park, but all small employers have a wonderful relationship with their employees. There is a bond there whereby they work and respect each other. We need that.

On the corporation tax, I differ totally with my colleague, Deputy Boyd Barrett. South Tipperary is one of the capitals of the pharmaceutical industry and we should maintain that. The 12.5% corporation tax must certainly be paid and, if not, it is up to our officials. I would blame Revenue for that.

We need State-run industry.

If it is not being paid, it should be. I do not want to frighten them away from our shores because we need them. I am a small-scale entrepreneur and I know that we need stimulation and initiatives. Above all, we need our people at work. They must have dignity and be respected for what they do.

At this time, the people of Ireland need hope and a vision for the future in order to get rid of depression and suicide. A small bit of stimulation is required because austerity is not working. The Minister knows this better than I do.

Debate adjourned.
The Dáil adjourned at 12.20 a.m. until 10.30 a.m. on Wednesday, 20 February 2013.