Bhí mé ag rá roimh an sos go bhfuil géarghá le spreagadh san eacnamaíocht áitiúil, go háirithe ó thaobh an earnáil tógála. Ba cheart go mbeadh an earnáil sin ábalta buntáiste a fháil ón spreagadh sin. Chonaic muid an éifeacht a tháinig ón bhfógra a rinne an Rialtas i rith na míosa ó thaobh an earnáil tógála agus an ráta CBL. Tháinig titim ar an éileamh don earnáil tógála ó chustaiméirí mar go raibh siad ag fanacht ar an dáta ar a dtiocfaidh an scéim seo i bhfeidhm. Tá sé fógartha ag an Rialtas sa Bhille seo go bhfuil an dáta sin ag bogadh chun tosaigh. Cé go gcuirim fáilte roimhe sin, sílim gur cheart níos mó poiblíochta a dhéanamh i dtaobh seo sa dóigh is nach mbainfidh mí-éifeacht leis. Ní cheart go mbeadh míbhuntáiste amuigh ansin mar gheall go síleann daoine go fóill go dtiocfaidh an scéim seo i bhfeidhm ag tús na bliana úire.
Sinn Féin has consistently challenged the Government on the need for a proper stimulus package for the economy, specifically the construction industry which once employed many of those who are currently long-term unemployed. While no one could justifiably argue that the sector needs to return to the level of activity in which it once engaged, we can all agree that the current level of construction activity is at an abnormally low level. The construction industry would benefit from a stimulus. I hope it will play a part in keeping young and gifted citizens in this country helping to rebuild the economy and develop badly needed infrastructure, rather than building railway lines in Perth or mining for materials in the Australian Outback.
The immediate effect of the measures the Government announced for the construction sector last month was a sharp decline in demand as potential customers of construction services chose to wait until January for the new scheme to come into operation. I welcome the provision in the Bill to bring forward the date on which the scheme will commence. The Government has, however, a job of work to do in publicising the change in the scheme's commencement date. While those involved in construction will know the scheme is applicable from today onwards, most people are not aware of this. This information needs to filter out into the public arena.
This scheme is a drop in the ocean and cannot be considered to be a real stimulus. While Sinn Féin supports the principle of the scheme, we will examine it in detail and submit amendments to improve it. As I noted in an earlier contribution when the Minister for Finance, Deputy Noonan, was present, as good as the scheme may be, it also has a number of deficiencies. For example, it does not get to the heart of the problem of black market operators. The logic for introducing the scheme was to tackle black market operators by creating a level playing field to provide a boost for the construction industry. If that is the case, the legitimate question that arises is why the threshold for access to the scheme was set at €5,675. The economy is starved of disposable income. Regular credit union surveys indicate that almost 1 million households have €50 or less at the end of each month. The threshold is excessively high because only those who have cash in hand or are able to access cash through banks will be able to avail of the scheme. While the news that two banks have engaged with the scheme is welcome, we must dig behind the figures to find out what precisely this engagement entails.
Is it still only people who are cash rich or have good credit histories and are not in debt who can avail of this? A considerable number will be ruled out of the scheme as a result of the threshold.
Many people want to have minor works done on their houses such as installing new doors, replacing windows or boosting central heating systems. This type of work is done on a daily basis across the country. Subsequent to the announcement of the budget, I spoke to a number of friends and associates who worked in the construction industry. Many of them were from County Donegal but worked in Dublin. County Donegal was more dependent on the construction industry than any other county and we have suffered greatly as a result. I spoke to contractors and people who worked on sites and they told me that the majority of those who did jobs up to the value of €30,000 were already registered contractors. For €30,000, one can construct an extension with an additional bedroom and an en-suite bathroom. Registered contractors set a price for an entire project, from the roof to the foundations. Unregistered contractors are, for the most part, doing minors work such as installing decking, replacing doors or laying footpaths around a house. These unregistered contractors may or may not be able to do big jobs, but they depend on small jobs for their bread and butter. The playing field is not level in this regard. I will not set out the figure to which the threshold should be reduced because one would first need to investigate the revenue potential, but I suggest we should be considering a threshold of €1,500 in the context of the benefits of the scheme.
I am concerned that the Government is concentrating on unpredictable effects of tax measures, while failing to see the need for a proper and proportionate stimulus in the economy. The Minister for Finance has form in introducing tax measures that it is alleged will make us more competitive. I recall the fanfare when the Government introduced SARP, but two years later where are the jobs? What has SARP delivered other than a significant reduction in the amount of tax paid by a small minority of high earners? The next time somebody from the business tax lobby world comes to the Minister with a great idea for reducing the tax burden on high income individuals in profitable businesses, he should ask for proof of how the proposal would create jobs rather than blindly go along with the agenda. The Minister for Social Protection stated each person who availed of SARP had to prove he or she would bring 20 jobs to the country. That was the spin, whether right or wrong. It was a crazy idea in the first place because how could one measure the jobs created? We need more rounded and fact based taxation measures. I acknowledge that it is sometimes necessary to take a leap of faith, but it should always be done on the basis of gathering as much evidence as possible.
I am alarmed at the way in which the pensions proposal from last year has played out in this Finance Bill. Even industry experts appear confused as to what exactly the Minister plans to do with the standard fund threshold reduction. I am sure there is logic somewhere in this complicated measure, but it is difficult to find. I am especially alarmed by the Minister's indication that there is a hole amounting to €130 million in his figures. This relates to my previous point. If he is deciding to move from a position such as the one stated in the original pensions framework on reducing pension tax reliefs because the industry proposes something better, should he not have a full grasp of the numbers beforehand? The industry made a proposal to generate €250 million, but less than half of that money will appear because the Minister swallowed the proposal hook, line and sinker. The proposal was meant to generate €250 million in 2014, but it will, in fact, only raise €120 million at most. Standardising pension tax reliefs would have raised up to €400 million. This is a measure that was proposed by Sinn Féin and the previous Government and the Labour Party also advocated it. As Minister for Finance, there is a fine line between taking advice and having the policies written by outside influences.
This Bill is, unfortunately, full of clangers. In addition to the measure which will see mostly separated fathers paying up to an additional €2,490 in tax per year, DIRT has been increased by 8%. The Minister has indicated he will bring forward an amendment on Committee Stage in order that a parent who does not have a tax liability will be able to access the relief. That parent, usually a father, may only have custody of the child for three weeks in a year. However, a father who has custody for five months will not get tax relief because the mother has a tax liability, even where both are separated and one parent cares for the child more often than the other. There is blatant inequality in this measure. The reason the Minister is dancing on the head of the pin in bringing forward this amendment which is not fair to other separated parents is it is a stingy measure that should be reversed. The children who are in the middle will be most affected.
I recommended that DIRT be increased by 3%. There is room to bring the frequent rate up to the less frequent rate of 36% but to raise it to 41% at a time when the banks rely on deposits is excessive. Simultaneously, DIRT is being levied on special term accounts on which many credit unions rely. Unfortunately, the people do not move their bank accounts, as we saw in the debacle where normal banking services closed down for almost 1 million customers at Ulster Bank. If one is not getting a service, one should switch to a different bank. If people had sense, they would be putting their money in the post office, but I do not think we are prepared for that because they would be DIRT-free products. I strongly advise the Minister to reconsider the hike in DIRT.
I welcome the decision to retain the 9% VAT rate for the tourism and hospitality sectors in 2014. I congratulate the restaurant owners and others who successfully campaigned for its retention, for which we called in our alternative budget. However, there is an element of giving with one hand and taking away with the other when it comes to the hospitality sector. The extra 10 cent on beer and spirits is an unnecessary move at this time, in addition to the 50 cent hike on wine. We are all aware of the damaging effects of alcohol abuse, but this is just a revenue raising exercise.
I welcome the provision on taxing online betting. Sinn Féin would go further by placing a tax of 3% on betting in shops and 15% of gross income of online bookies. There is a need to bring forward the betting Bill. That Bill contains measures worth €20 million. What has stalled it in the past two years? It needs to be brought forward at the earliest opportunity in order that remote bookies and betting exchanges would be brought into the tax net.
I ask the Minister why the self-assessment date has been moved to before October. I recognise that the announcement of the budget has been moved to October and that it makes sense to have the full facts on taxation available in advance of compiling the budget.
However, I have already been contacted by businesses, entrepreneurs and the Irish Tax Institute, who say a move like this could have a serious impact on the cycle taxpayers in these sectors are used to. I urge caution if this is the road the Minister is going down and I advise him to consult widely before taking a decision of this magnitude. The Minister should tread carefully and should discuss the proposal beforehand.
Finance Bills are important. They provide an opportunity to stimulate the economy, to make the tax system distributive and to raise revenue where it should be raised. The Government's finance Bills do not necessarily tick those boxes and poor planning of measures is starting to become its stock in trade. Last year, the Government introduced the property tax. This week, we have seen how poorly planned it was. The property tax or family home tax is a crude revenue-raising exercise dressed up as something else. The property tax and the household charge before it were simply measures to plug the chasm in the public finances left by the continuing payments to bondholders. Not a penny from the 2013 take will go into local areas and people are already receiving demands for their 2014 payment. Labour Party Deputies who call for only an extension of the payment deadline have no idea of the hardship that is out there. An extension just kicks the can down the road for struggling families. Sinn Féin is committed to scrapping this property tax if elected to government. This would be a €500 million stimulus for homeowners who could, in turn, spend money in their local economies.
The most galling aspect of the local property tax is that some call it a wealth tax. A tax on the average family home is not a wealth tax. It is a dishonest and ridiculous statement to suggest it is. A wealth tax should target privileged individuals with net wealth. Sinn Féin has drafted detailed legislation on the matter but the rules of the House do not allow me to table such legislation.
The Government wants to label this as the last troika budget. Nobody wants to see the troika going home more than Sinn Féin does, but we also want to see the troika mindset gone and unfortunately, as the Bill shows, that seems a more distant prospect. There has been much speculation about whether Ireland needs a precautionary credit line when exiting the programme. The troika made it clear to us last week that we are not entering a golden age of Irish sovereignty. We are tied, whether we like it or not, to strict budgetary monitoring and supervision for the foreseeable future. This Government is not a champion of Irish economic sovereignty in the slightest.
Soon our banks will undergo stress tests. It is no coincidence that these tests are coming up at the same time that our international creditors are wary of letting the State return to the markets without a safety net. We are still weighed down by bank debt. Sixteen months ago, the Eurogroup spoke about separating banking and sovereign debt. It was a moment of hope for this small State, allowing us to think that much of our toxic banking debt latched to the State could be separated. However, that moment has passed and the Government failed to take the opportunity.
I hope some retrospective recapitalisation can happen, but the chances of that are becoming slimmer by the day. I ask the Minister to stand up for Irish interests. In the Finance Bill, I see no evidence that the Minister is so doing. It has been written for the troika rather than with the interests of the Irish people at heart.