I will come to that figure. Let us be clear: it is indisputable that there is headroom of €570 million for us in order to be below the 3% deficit target. Therefore, if Irish Water were to be included in the State's books, that figure could be absorbed. As the Minister rightly said, there would then be the issue of the €300 million to be raised in domestic charges.
How would the Minister fund that? If it were to come out of additional spending, it would bring us over the deficit target. First of all, the €300 million is not €300 million, because if the Government scrapped water charges there would be no need for its tax relief off-setting water charges and no need for the household package to assist families who simply cannot pay, so the figure comes down to below €200 million in the first instance. If the Minister did not reduce income taxes from 41% to 40%, he could cope with today with no scaremongering about income tax going up by 4% and taking child benefit from vulnerable families and children. There would be none of that nonsense that this desperate Government is trying to peddle.
That is not the Minister's only option. He has other options for finding that €200 million within the scope of other budgetary proposals, and we have suggested a number of them to him. However, he has decided not to do this. SARP is an absolute tax benefit to a handful of individuals. Let us be clear about this. A total of 12 individuals benefited from the scheme in 2012, while 31 benefited in 2013. It is a handful of individuals who an earn an unlimited amount of money, and their income will be reduced by 30% for tax purposes, giving them not thousands but tens of thousands of euro in write-downs, because they come here and the Minister thinks they are special. He believes that this will cost another €1 million. There is no limit on the type of money that the Government can throw at this handful of individuals. A person can claim for their or their children's educational fees and their flights to and from their home countries. Since they were not happy with €500,000, if people earn €1 million in this State, they can have that figure less €75,000. They can have 30% of that taken away from the tax man when they are calculating their tax. It is an absolute disgrace. At the same time and in the same breath, the Government tells families who simply do not have any money left at the end of the week that they must tighten their belts and pay up for the sins of others in the past through water charges, the property tax, prescription charges and a range of other charges.
The Minister needs to stop the scaremongering on this and get down to fair ways of funding water services. There are other ways of doing it which should be examined in respect of keeping Irish Water off the national accounts. In respect of questions that we have put to the Minister - I have submitted another one and I hope the Minister and his officials will be transparent with the figures - I have looked at every single question that has been asked by every Deputy in this House about the cost of Irish Water, and it is clear as mud. This Government is unwilling to give clear figures in tabular form in respect of the costs associated with Irish Water, the sources of income, the sources of expenditure and the categorisation of that expenditure. I will try once more. I have submitted a parliamentary question and I hope the Minister will ensure that his Department officials and the Government provide that information in a fair and transparent way.
What is telling after three years of stagnation and recession is that when the Government found some leeway, its instinct was to cut income taxes - income taxes for the highest earners. Its instinct was not to scrap the tax on the family home or to restore the respite care grant or funding to the National Disability Authority. Its instinct was to give it in a way that exponentially favours those who earn more. That is clear from the figures that are there. People in this House who earn, at a minimum, over €80,000 - I am not including staff - will get multiples of what someone on the minimum wage earns in this tax relief. Ministers and the Taoiseach earn far more than elected Members. Perhaps people in this House are under pressure - perhaps they over-borrowed or stretched themselves too far - but we are not the most needy in society. The people who must go to the Society of St. Vincent de Paul to ask for food to put on their table, who struggle to put clothes on their kids when they return to school or who are worried about what will happen in the next six weeks as they start to prepare for Christmas are the people who should be getting the tax breaks in this budget. But no, the Government has decided to provide the most benefit for the wealthiest in society.
I welcome changes to USC levels and thresholds in the Finance Bill. Sinn Féin would have gone further and removed all those earning the minimum wage from the USC tax net, but I welcome the fact that this is the second time the Government has done this. We will continue to pursue this issue and hopefully, through our persistence, the Government will continue to take those earning below the minimum wage out of the USC tax net.
It is in its income tax policy that the views and priorities of Government are most visible. A progressive tax system is how a modern state redistributes wealth. The budget and this Bill do not redistribute. They make sure that less is transferred from those who have it to those who need more.
There are a number of measures in the Finance Bill that I welcome and will support. I want to recognise that there are some positive moves, such as the extension of the tax relief for farmers. However, the farming community has brought to my attention its belief that the definition of "active farmer" is inappropriate, and I hope the Government really listens to this. The arbitrary figure of 50% of farm working time does not represent the real world and will hit small farmers harder. I fully agree with the principle that we need to make sure this is targeted at active farmers and that active farmers are prioritised, but the definition needs to be amended if we are to do what it says and genuinely ensure that those who are farming are able to keep their heads above water. The application of this definition for capital acquisitions tax purposes will have a massive impact on farmers, particularly smaller farmers and those in areas with poor land. I come from west Donegal and those are the types of farmer who live there. If this Bill is not amended, many farmers with hopes of transferring their land to family members will have those hopes dashed. This is the last thing that rural communities need. In respect of such holdings, if a person can get a job off-farm, they will take it. It involves small holdings and farms and bad land. If they can get it, people work 20, 30 or possibly 40 hours per week. The definition in this Bill means that they would have to be working 40 hours on the farm as well to be able to avail of this, which is simply not acceptable, so I hope that the Government looks at this and at the definition of active farming. I understand what it is trying to do here, but I think it will have a consequence, hopefully unintended, of penalising small farmers on poor land in particular.
I welcome the move towards taking a more proactive approach to the domicile levy. In 2012, only six people paid this levy. It is an absolute disgrace. There is certainly a pattern under the Government of placing a higher priority on chasing lower entrants than on chasing higher earners who do not pay what is due. Look at the property tax. The Government allowed the Revenue Commissioners to chase people who had not paid. We hear from the Revenue Commissioners that they are pursuing through the courts 500 people who did not pay, could not pay or refused to pay the property tax. Years later, in the Finance Bill, we are now finally allowing the Revenue Commissioners to send a letter to people they think should be paying the domicile levy. Let us remember who is eligible for the domicile levy. It is people with worldwide incomes above €1 million who have properties in this State worth in excess of €5 million and who have paid less than €200,000 in income tax. The Revenue Commissioners believe that there are people are out there who are not paying it, but years later, a provision to allow the Revenue Commissioners to pursue them is finally included in the Finance Bill, with penalties ensuing. I suggest that we might need to look at the definitions as well. These definitions were raised in 2012, and perhaps we need to reduce the definitions to capture more individuals in respect of the domicile levy. Perhaps new figures exist from 2012, but they are the only figures that are on the record.
In respect of corporation tax, the Minister says that:
The problem with the so-called "double Irish" from Ireland's point of view is that it has that name. People think that something we do here gives rise to it. That is not the case. It arises from tax codes elsewhere and the way in which the USA regards certain arrangements. We do not operate any kind of tax haven. Our position is legitimate and the 12.5% rate is applied here.
I wonder whether he recognises his own words. I could quote other comments he made in response to my questions on this subject in which he clearly indicated that the Irish Government can do nothing to the tax code that would end the double Irish, yet fast forward to budget day when he stated:
The so-called “double Irish” is one of many such schemes. I am abolishing the ability of companies to use the “double Irish” by changing our residency rules to require all companies registered in Ireland to also be tax resident in Ireland.
Well, fair play to the Minister. Finally he has listened. I wrote the legislation for that reform two years ago. I raised the issue with the Minister and others in the Joint Committee on Finance, Public Expenditure and Reform, where I pointed out that we had to examine what was done in 1997 and apply it in the context of current tax residency rules. He told me it could not be done. He told this Dáil - it is a serious issue to mislead the Dáil - that nothing can be done in the Irish tax code that would end the double Irish. It is on the record. At my instigation, the aforementioned committee reviewed the issue of corporation tax. After all of its work, it still did not have a clue about the subject. Members thought the double Irish was something that could not be ended. That was because every time I raised this issue, people from the Minister's party, including in particular the Minister of State at the Department of the Taoiseach, Deputy Dara Murphy, heckled, sniped and accused me of being anti-jobs. I wonder if the Minister of State would accuse the Minister, Deputy Noonan, of the same practices now that he has given in and listened to sensible proposals by ending something that was causing immense reputational damage to this State.
The problem with the double Irish and what is proposed in this Finance Bill, however, is that the Minister has given a sweetener to the companies concerned. If they establish here after 1 January 2015, they will automatically be tax resident in this country, which means they had three months from budget day to establish their companies here. If we are to believe what we read in the newspapers, a flood of companies are being set up here to benefit from another provision in the Bill which gives companies incorporated here but not tax resident until 2020 to get their affairs in order. Five years from now, they will be made tax resident here. If the companies that are not currently established here get their act together before 1 January, they will be able to avail of the double Irish for a further five years. That is simply not good enough. At a minimum, he should ensure that the effective date of application for the measure is budget day. I do not think he will do that, however, because he has engaged with the industry and I am sure he has signalled to them that they should get their act in order.
This head in the sand approach has not done the State any good. Sinn Féin is clear in its support for the 12.5% corporation tax rate but we will not stand for genuine companies having to pay 12.5% while others are able to avail of tax avoidance schemes that reduce their liabilities to low single digits. This is being done with the support of the Government because it has not closed these loopholes. The Finance Bill proves for once and for all that the Government had the ability to stop this practice at any time in the last several years instead of blaming it on other tax jurisdictions. Of course, it is related to the way other tax jurisdictions interact with us but we could have made a move to stop it. I will not go into the Apple investigation but the Government should have taken it on head first instead of waiting for the European Commission to conduct its investigation. We should have pre-empted the Commission by starting our own investigation.
In regard to tax avoidance, the Bill contains an entire section which deals with people involved in deliberate tax avoidance schemes. Someone who is deliberately involved in a tax avoidance scheme will at present incur penalties and interest if the Revenue finds out. The aforementioned section tells these tax avoiders, who are breaking the law, that if they put their hands up they will not incur surcharges and their interest payments will be reduced by 20%. How dare the Minister introduce such a provision at the same time that he is telling people they have to pay up for charges they cannot afford? People who cannot afford to pay the household charge are being pursued by Revenue through the courts but the Minister is amending the law so that people who were deliberately involved in tax avoidance schemes of a huge magnitude will not be subject to surcharges or the full interest liability. That is an absolute disgrace. We should be increasing the penalties on people who are involved in deliberate tax avoidance of this magnitude. Revenue should be strengthened by an additional 100 staff, as Sinn Féin has proposed, to ensure those who are involved in such tax avoidance are pursued and that the penalties, interest and surcharges are applied. This is revealing of the Minister's attitude. I am aware that previous amnesties have brought money into the Exchequer but is this the time to give amnesties to tax avoiders? Should we not be sending a stronger message to the effect that they should pay tax or face additional surcharges?
The special assignee relief programme, SARP, again reveals the Minister's priorities. This scheme is an utter disgrace. When it was first announced, the Tánaiste and Minister for Social Protection stated that it would be linked to employment and that everyone who availed of it would have to prove that in the region of 20 jobs would be created. There is no such requirement anymore. Why does the Minister believe an income of €500,000 is not good enough? Are people who earn €1 million asking the Department of Finance to allow them to write off 30% of their entire incomes for tax purposes? Is he giving a listening ear to such individuals? Does he not get what 200,000 people were saying on Saturday? I realise his comments were very dismissive of them but does he simply not get it? Part of the problem is that the public is not aware of these measures. They are all contained in the Finance Bill but they were not announced on budget day and they will never make the media headlines.
I welcome the Minister's statement that office holders will no longer be able to write off their water charges and household charge liabilities against the dual abode allowance. Let us go further, however. Tell me -----
