Deputy Deasy is sharing time with Deputies Tom Hayes and O'Donovan. Deputy Deasy has ten minutes and the others have five minutes each.
Finance Bill 2013: Second Stage (Resumed)
Question again proposed: "That the Bill be now read a Second Time."
I will stick with the living city initiative in the Bill. It relates to the urban regeneration of Waterford and Limerick. The specific provisions are badly needed and will amount to real money. Although I cannot speak for Limerick, Waterford city centre needs investment. It has suffered and changed considerably since the economic downturn. Recently, someone told me that 150 premises were vacant in the centre, 20 on the quay alone. The quay is the streetscape synonymous with the city. The centre has been devastated in recent years.
The initiative has two parts, residential and retail. I will deal with the former first. Clearly, the Minister recognises that many historic buildings in the two cities need help if they are to be restored. In Waterford, many of the buildings in question are in the city centre and form its historical core. There might be more than some believe. The difficulty is that many of them are not being utilised as originally intended. Many are vacant. Of the others, many are being rented to house some form of business, be it retail or service-oriented.
The scheme is substantial. Relief can be claimed at a rate of 10% per year over ten years against income following the customary planning permission, certification, etc. The Department has considered the fact that many of these Georgian houses are not practical family homes and has allowed buildings to be divided into smaller units.
Will this measure make an appreciable difference to Waterford city centre? I cannot speak for Limerick, but some helpful tweaking may be necessary before the commencement order is signed. The legislation as written allows for scope to accommodate the city's particular circumstances or attributes.
It is a tight provision to stipulate that a house must be the principal, private residence. I understand the reason the provision is framed in that way but clarity must be provided in the coming months on a couple of points. First, what is a Georgian building? It depends on whom one asks. If one goes strictly by date one is probably talking about the Georgian period ending in 1830. We must make the provision as effective as possible. Some people do not count the Regency period which occurred from 1811 to 1820. King George III ruled until he went mad in 1811.
Good boy, Johnny.
"The Madness of King George".
He was succeeded by his son the Prince Regent who ruled until 1820. Mad King George died in 1820 and his son became George IV. He ruled until 1830 when he was succeeded by his brother, William IV, who ruled until 1837. Many regard that date as marking the end of the Georgian era. When it comes to architecture one could ask what is the cut-off point. Georgian-style architecture kept being built well into the 1840s; some would say well beyond that. It is important that we determine the definition of Georgian buildings and architecture in the two cities. Those who do that for a living do not believe Georgian architecture should be strictly determined by dates. It is accepted in those circles that Georgian architecture was being built well into the 1840s.
If a strict definition is applied to what constitutes a Georgian building, Waterford will not benefit a great deal from the provision. The dates must be extended into the early Victorian period. Within a short period we will have a good idea of the footprint of Georgian and early Victorian houses. It is most likely that a comprehensive inventory of Georgian and early Victorian houses has never been done before. We must find out how many such houses there were, where they are and what they are now being used for. It is important that the city gets the maximum benefit from the provision. The measure could be broadened into the early Victorian era at the very least to accommodate those houses that are in the style of Georgian architecture and not those that were built strictly within a certain date range.
The second part of the pilot project is to assist the retail sector. It is a generous provision. Improvements, renovations and extensions can be made and the cost can be written off against income tax once the building or premises is owned and operated by the person conducting the business. As with the previous provision it would be helpful if the Minister considered tweaking the provisions slightly to maximise the impact, certainly in the case of Waterford city. One point that has already been raised with me is that the number of retail outlets owned and operated by the same individuals in the centre of Waterford is not high. That is what I have determined to date in initial conversations I have had with people who know these things.
I understand the definition of retail may be broadened to include service-oriented businesses such as a solicitor’s office, dentist’s office or café. I note there may be a broad definition when it comes to refurbishment. That leads me to believe we have to consider loosening slightly the strict definition of owner-occupier to bring in, for example, long-term leases, or in cases where a tenant has been in situ in a particular location for a considerable period, which would determine and suggest continuity. It is important that the Department would think along those lines.
I am aware of the constraints under which the Minister is operating. The measure requires EU grant aid approval. One measure the EU will not approve is the kind of investor tax reliefs introduced by the previous Administration that ultimately helped destroy the economy. They made a lot of people rich in this country but, ultimately they helped ruin it. I have asked interested parties in Waterford city to think about the measures in order that they could come up with proposals that might make sense to the Minister and the European Commission. I urge the Minister to keep the door open on the measure before the commencement order is signed later this year or early next year.
Every one to whom I have spoken sees the benefit and potential of the measure but they just want the opportunity to make suggestions as the process develops. I listened to the Sinn Féin spokesman deal with the measure last night. He needs to read the details before commenting. It is unbelievable that someone would not have even a basic grasp of what is involved before commenting on it on the floor of the Dáil. Anyone to whom I have spoken in Waterford sees the benefit of the measure. If it works it will have an additional impact, namely, on the construction industry locally. Anyone, from a painter-decorator, plumber or highly skilled craftsman has the potential to get work following on from the introduction of the measure. That is important in a region that has an effective rate of 20% unemployment. In the city of Waterford the rate of unemployment is probably a lot higher – it could be as high as 35% in some areas.
I have been highlighting the damage done to the regional and local economy in Waterford and the south east for some time. To my mind, this is tacit recognition by the Government that a major problem exists and that extraordinary and targeted steps must be taken. The figures back that up. The ESRI also support my argument. Three weeks ago it published a report entitled, The Regional Dimension of the Unemployment Crisis. The ESRI concluded that the national statistics hide the fact that there are areas with considerably higher unemployment rates than the average and others with considerably lower rates. It said that the persistence of unemployment differentials suggest that there are underlying structural differences across regions. From a policy perspective that is important as national policies are unlikely to address the region and location-specific factors.
I thank the Minister for Finance, Deputy Noonan, in particular for recognising what the ESRI has exposed and for trying to do something about it. Other Ministers must take note. When they formulate policy they must consider the potential detrimental impact a measure might have on a region that cannot endure much more. I look forward to engaging in dialogue with the Department and the Ministers involved in the coming months. I am hopeful the Minister will consider some suggestions that might help make the legislation as effective as possible.
I am pleased to have an opportunity to speak on the Finance Bill. We are living in extremely difficult times that are tough for everyone. In debating the Bill we must discuss why we are taking certain steps and the impact Government proposals introduced in the House by way of the budget, now being followed up in the Finance Bill, will have on people.
We must explain to people what is happening. They need to know the difficulties they are in. Not enough effort is being made in our work in the Dáil and through the media to tell the true story of the economy, the trouble we have been in and how we are getting out of it. The media has not been fair in telling the story. Everyone has a duty, including Members and the media, to outline to people the true situation.
I spoke to an irate person this morning on the telephone that rang my office last week. After I had spoken to her for ten or 15 minutes about the reasons for the introduction of taxes and other changes she understood the situation. She asked me why we do not outline the situation more often. I say to the Minister of State, Deputy Sean Sherlock, that we have a responsibility to bring the message to the people. That is one way in which we are not fulfilling our duty. The Opposition must be fairer to us in what we do. I accept it is a political forum. We were on the other side of the House for many years.
There are times when we have to put the nation first. There are times when we in this House must be fairer and that will work not only to our benefit but to the benefit of the country. It would help us to get out of the mess we are in if we were more open and fair rather than for us to shout each other down at every given opportunity. A first step is that we must bring people with us in what we are doing.
There are many issues I would like to discuss but one that is of paramount importance is job creation. We need to get Ireland back to work and in that way stop young people from emigrating and provide opportunities for them through job creation. Great efforts were made in the budget and in this Bill to make job creation worthwhile but there are many areas that have not been examined and we need to examine those. I cite the example that more than 400,000 people are unemployed and if one drives on any of the roads in rural Ireland one would find that many of them are in a deplorable state. Every Member receives representations about the state of our roads. There are not enough people working on our roads. A proposal whereby unemployed people would be allowed to retain their entitlements and be given some extra money to assist in road maintenance through working in a co-ordinated way with the local authority is one we should consider in the future.
There has been considerable discussion on assets being calculated for the purposes of income in regard to qualification for a higher education grant. That is not something that should be allowed. I do not know if there is provision for that in the Bill. Such a proposal would be unfair and unjust. A person could have a large asset but derive no income from it. I know of several people who have assets but with the income they have from the work they do, be it agriculture or in a small business, they are struggling to survive. Many of them are on an income of €10,000 or €20,000 a year. They want to put their children through college and if we force through a provision whereby assets are included for the purposes of the calculation of income, that would be unfair. I call on the Minister of State and the Government to make sure that does not happen. It is unfair and unjust and cannot be allowed to happen. These people are committed to sending their children on to higher education and they should be supported in every way to do that.
I welcome the opportunity to contribute to this debate. This Bill, the third Finance Bill of this Government, is being taken in the context of there being 400,000 people unemployed, more than 80,000 people a year leaving the country and a massive level of national and personal debt. The Government made some strides last week in regard to the promissory note but I caution people who are already clocking up ways to spend those savings. It is important to bear in mind that the money that potentially will be saved from the promissory is not new money but money we will not have to borrow. It took 14 years to wreck the country and I would caution against anybody suggesting that three years into recovery we would go down a route of wreckage - again led by the people opposite. I welcome the remarks of the Governor of the Central Bank in the media recently where he said that he was turning his attention to those banks that are dealing with personal mortgages. This is hugely important. Allied Irish Banks made an announcement last week on how it hopes to target relief for people in distress and that matter was raised earlier in the House. Any rumours or suggestions that the bank would be targeting relief while at the same time putting up interest rates is something of which the Government must be mindful and cautious.
The Bill has some good aspects, particularly the research and development tax credit, which the Minister of State will welcome. The requirement that a person would have to spend 75% of their time in research and development was an unrealistically high level and that proportion of time has now been reduced to 50%. That is very important for people in the SME sector. There may be opportunities to reduce that further, especially for people under a certain threshold, in provisions in future finance Bills.
If one passes through any town in the country one will find some element of tourism infrastructure, be it hotels or guesthouses. The extension of the incentives to cover investments in this sector will help sustain jobs and will add employment on top of what the Government has already done, which is very welcome, namely, the allocation of a 7.5 cent per litre rebate for bus operators. The rural constituency I represent is hugely dependent on rural transport, be it for social or educational purposes, and this provision is extremely important because of the cost of fuels. That measure is on top of the announcement that was made in the budget by the Minister for Finance in regard to hauliers. It is an acknowledgement of the fact that this country is greatly reliant on road transport and the commitment to the sustainability of it into the future against the backdrop of fuel costs must be welcomed.
I previously asked in the House that the application of VAT to facilities in the tourism sector that also have an educational remit, and this comes under the Minister of State's Department, be examined. If one has a pet farm or a centre to which school tours are brought, this is a small measure that should be introduced. I know that the reference to this in last year's Finance Bill was as a result of the European Commission requesting Ireland to examine this area. Given that some of these facilities have an educational remit, there may be an opportunity to review the application of VAT to them and the rate being charged.
Changes in regard to vehicle licences were announced in the budget with the introduction of a 131 registration plate for this year to try to stimulate the new car market. Those in the second-hand car market would say that a simple provision of allowing cars to re-registered, which I have raised in the House previously, could stimulate its market. For example, if the Minister of State, Deputy Sherlock, was to buy a second-hand car in Limerick rather than having a LK registration plate, he would have the opportunity if he wished to do on a voluntary basis-----
I would never buy a car in Limerick.
The Minister of State has proven my point. Under such a proposal he would have the opportunity to re-register his car in Cork. Such a provision might yield a revenue stream. If one were to talk to the owner of any garage that deals in second-hand cars, they would say that it is very difficult, particularly in Dublin, to sell cars with rural registration plates. A small change such as that would allow second-hand cars especially, of which there is currently a glut, to be sold.
I welcome the provision for farm consolidation, which is a matter I raised with the Minister for Agriculture, Food and the Marine. I refer to the concept of an outside farm, where a person is farming in an area and land comes up for sale beside him. On purchasing it he also has an outside farm two or three miles away from his own farm. The tax associated with consolidating land up to now was prohibitive. In acknowledging we are trying to meet the targets in Food Harvest 2020 while allowing a farmer the opportunity to extend his property, that measure, together with the stock relief for young farmers and stamp duty on transfers, are tangible provisions that will make a big difference in rural areas and in sustaining the agricultural community into the future.
This Bill is being brought forward against an awful economic backdrop and it is a small incremental step forward. No gigantic leaps are going to be made by the Government to restore the economic situation we have inherited but incrementally this is another rung in the ladder. It is about restoring hope and confidence and the measures, even the few to which I referred, will help that in some way. I support the Bill.
Debate adjourned.