Finance Bill 2016: Second Stage (Resumed)

Question again proposed: "That the Bill be now read a Second Time."

Will the Minister for Finance or a Minister of State at that Department be in attendance?

The Minister has asked me to attend. I will convey the Deputy's concerns to him.

That is fine.

Before the debate was adjourned last night, I was talking about investment funds and welcoming the fact that my proposal for a 20% withholding tax had been agreed to by the Government and included in the Finance Bill. However, I have concerns about the fact that capital gains tax will not be applied to any uplift in the value of property acquired by funds if they hold that property for five years. This will allow a huge amount of Exchequer revenue to go uncollected. I gave examples last night, including that of the commercial office sector in Dublin which saw an uplift in property prices last year of 22.4%. Since mid-2012, residential property prices have increased by 42% in the capital and by an average of 32% outside it from the end of 2013 to date. Notwithstanding the major uplift in the value of property, capital gains tax, at 33%, will not be charged if the funds hold the properties for five years. The proposed five-year window will allow funds to leave town tax-free and with huge gains even earlier than would have been allowed had they bought in this window under section 604A of the Taxes (Consolidation) Act. Section 604A allows for capital tax-free gains on Irish property bought between December 2001 and 31 December 2014 if held for a period of seven years. Furthermore, the proposed five-year holding period provided for in the Finance Bill is open ended. While I opposed it when it was introduced and while it is seriously flawed, led to price inflation and is criticised all round for continuing too long, it is at least the case with section 604A that it allows for the gradual application of capital gains tax where property is held for longer than seven years. The new proposal in the Finance Bill makes no provision for the gradual application of capital gains tax.

I have serious reservations about the threshold of 25% which the Government has put in place in respect of the measure. A minimum of 25% of a fund's portfolio must consist of Irish domiciled property. My concern is that the threshold could lead to funds diluting their holdings with other business assets or international property resulting in their not meeting the threshold and, thus, avoiding tax. That would mean losses for the Irish public. For example, a fund with 30% of its portfolio consisting of property holdings might take in an asset which is not property such as a French airline, with the result that the property proportion would fall to perhaps 24%. Therefore, there would be no payment of withholding tax whatsoever. If one looks at these funds, one sees that a number of them have the ability to do this. Some of them have substantial Irish property holdings, but they also have holdings in companies such as Virgin, which means that they could dilute the property component. A number of the funds which are domiciled here have significant holdings of property in other jurisdictions. It is a concern we need to tease out.

I am not sure if the confusion about section 110 has been caused deliberately, but section 110 and qualified investor alternative investment funds are two completely separate structures, as the Minister of State and his officials know. It is important to say this because sometimes they are rolled into one. Section 110 does not deal with the funds industry. It is a separate section which I welcome. I am glad that the Government has taken my advice about the removal of the proposed marked-to-market measure in the original Government amendment. It is welcome that it was proposed in the way it was. It was a good move by the Minister and his officials to allow us and others to suggest changes. These changes will take effect in the Finance Bill. However, I will wait to see if there is substance to the new amendment. I am aware of intense lobbying on the amendment and the one relating to the funds industry and very dubious as to whether the people concerned have the national interest at heart. Through freedom of information requests, I have seen the correspondence between Department of Finance officials and the industry on the structure of the amendments. It is the same group of lawyers and accountants who saw the opportunity provided by section 110 and funds to help their foreign clients to avoid billions in Irish taxes in return for a couple of million euro in fees. I am always very concerned when someone goes to the poacher for advice on these matters. I do not question the Department's integrity on this issue or that of its officials and we will tease it out in more detail on Committee Stage. I am also conscious that the Government has included an expected yield of only €50 million from both measures, which leaves further questions as to whether there are more loopholes in them.

Overall, the move is to be welcomed.

The Bill gives people who have engaged in tax evasion until 1 May 2017 to get their houses in order and allows them to make a voluntary disclosure regarding tax evasion involving offshore income or assets. That entitles them to mitigated penalties and to avoid criminal prosecutions by coming forward to Revenue voluntarily. We now have the information to catch these people, but we are letting them put their hands up and not face prosecution if they come forward sooner rather than later. That is not the type of enforcement or punishment we should be considering for this type of tax evasion. The deadline is set in the context of extra information that Revenue has at its disposal from closer co-operation and worldwide information exchanges on the tax affairs of Irish individuals in foreign jurisdictions. The deadline is in advance of the greater clampdown on offshore assets next year by the Revenue Commissioners. I question the accommodating approach for people who have broken the law.

With regard to the deadline of 1 May, I request that the Government remove the option for mitigated penalties and no criminal prosecutions by ending any option for preferential treatment and pursue people with the full rigours of the law, in particular in light of the extra information the Revenue Commissioners now have at their disposal. We no longer need people to come forward and make declarations because we now have co-operation with other jurisdictions to capture people. Disturbingly, there was no question of the full rigours of the law not being imposed last week on an individual who engaged in a peaceful protest at the age of 15, yet the full rigours of the law will not be used when it comes to tax avoiders in the State, unlike other criminals who get amnesty after amnesty and chance after chance to put up their hands, admit they were bold boys and girls and carry on.

Brexit seems to be the magic word in the Finance Bill, in that it appears in the Fine Gael and Fianna Fáil cheat sheets. We have been told that this is a Brexit-proof budget and there is not enough Brexit-proofing in the budget. It is one of the most obvious sham fights we have to put up with. It is connected to my earlier point. Fianna Fáil did not even produce an alternative budget so we have no idea what it wants in the Finance Bill regarding Brexit-proofing. The only idea it has is that a Minister should be appointed to deal with the issue.

If we need to include provisions on Brexit in the Finance Bill then let us do so and have a real and genuine debate because the issue affects everybody. If one came from out of town and read this Bill, would one notice Brexit was an issue and Ireland could be seriously impacted as a result? One would not because the budget is no more Brexit-proofed than any other. One of the major concerns we have are Border communities and cross-Border trade. There are no extra supports for cross-Border trade or institutions in the Bill - it is hollow on these issues.

Two of the most questionable measures that must be classified as a zombie initiatives are SARP and the living city initiative. The SARP scheme is a scheme about which I am deeply uncomfortable. Some people have quietly derided the Minister for Jobs, Enterprise and Innovation, Deputy Mary Mitchell O'Connor, for her plan to introduce a tax break for high earning immigrants, yet I am sure the same people would be out in force to support the continued existence of the SARP scheme. It was due to expire in 2014. At that point it had failed to create the jobs we were told it would. A small number of very wealthy people got a tax break and nothing else changed. A review was held by the usual suspects, like IBEC and KPMG, and they made submissions stating that it was a great idea. It was extended. It is still not working, but it will be extended again.

In 2014, 302 people benefitted to the tune of €5.9 million from the scheme, 43 of whom earned salaries in excess of €375,000. We were told that 124 jobs were created as a result. That means every year the State is paying €47,580 to create these jobs. We would be better off employing those people; it would be cheaper and we would not be providing €5.9 million of a tax break to people who are extremely wealthy. This scheme was dreamt up by accountants to allow very wealthy people to pay less tax. There is no way to verify any of the jobs that have been created as a result and it should be allowed to die a graceful death.

I would like to raise other issues in the Bill on Second Stage, but will not have the opportunity to do so because of the time. My colleagues will speak on some of the issues, including the living cities initiative, capital acquisitions tax, the dwelling house exemption and section 46 of the Bill which, it is to be hoped, will clamp down on the abuse by certain chicken farmers of the flat VAT rate available to farmers. We will deal with these issues in greater detail on Committee Stage.

I am glad that the Dáil showed a bit of common sense yesterday in deciding to commence sittings at 10 a.m. today and tomorrow. It is absurd to have tagged as family friendly policies a start time of 12 noon and a finish time of 12 midnight. I hope this is a permanent change of heart by Fine Gael and Fianna Fáil, and that the Dáil can start, like most people in work, at a convenient time in the morning and allow people to get home at a reasonable time in the evening. I am very pleased to be here.

What struck me on reading the Finance Bill was the question of what the Irish tax system, the Bill and Donald Trump have in common? In our tax system we have built up a very complex structure which allows the Donald Trumps of the world, if they can afford accountants, lawyers and time to interact with the Department of Finance and various other avenues, to develop a system whereby it is perfectly legitimate for people with very high incomes and significant levels of assets and profitable enterprises to effectively avoid, or in the case of tax losses to indefinitely postpone, the payment of due taxes.

I raised this issue during the discussions of the Committee on Budgetary Oversight. We examined a number of elements of the tax code. The State is losing out on billions of euro in tax revenues thanks to the boom time losses, built up by banks and developers, that ordinary PAYE taxpayers paid for. They got the country out of the state of collapse that Fianna Fáil, unfortunately, let it fall into.

The Revenue Commissioners have confirmed to me that the financial services and construction sectors managed to avoid €1.24 billion in taxes in 2014, the most recent year for which data is available. We will have the 2015 data shortly; the revenue Commissioners and Minister might confirm when we will have those figures. An extraordinary amount of tax losses have built up in our system. We have accumulated losses in all sectors of over €15 billion, in the financial services sector of over €9 billion and in the construction sector of over €400 million.

When a 12.5% rate, or even half of that, is applied, one gets an idea of how it is possible to utilise these losses indefinitely so that people who crashed and were bailed out by taxpayers who covered their losses can still carry losses forward when they return to profitable activity. They have been able to avail of €1.24 billion in tax not paid in 2014 by utilising the significant losses they accumulated during the property crash to offset tax on the profits they are now recording. This is perfectly legal. It is an arrangement that is entirely within our tax laws.

The construction and financial sectors are sitting on combined losses of over €129 billion. Major tax losses were built up by companies in sectors, in particular financial institutions, that the taxpayer bailed out at enormous expense and sacrifice. This brings me back to our friend, Mr. Trump. People may recall that he has declined, as part of the debate during the US presidential election, to make known his tax returns.

What is known, from various filings, is that he arranged his affairs, arising from tax losses in companies that made such losses, in such a way that it was agreed that for many years, this multi-billionaire in effect paid no tax at all. Ireland has its own Donald Trumps. We need to be conscious of this when it comes to taxation. We need to look at and examine the matter. We need to get a detailed report from the Revenue Commissioners on it. My proposal has been and was at the time of the Apple tax debate that we look at introducing a minimum effective tax rate, whereby any profitable company would be forced to pay a certain amount in tax, even where it was carrying massive tax losses from previous years. Once profits go above a certain level, even though a company has losses, it has to begin to pay at the corporation tax rate on profits above a certain level. Years ago I got former Deputy Brian Cowen and the late Brian Lenihan to agree to bring forward a minimum effective tax rate on income tax in the tax system. That is how it works. At a time when we need corporation tax receipts, we can work out a structure that would enable us to ensure capital investment - a particular example is third level education - and what would be more appropriate than the additional taxes garnered from a change in the system that would actually go towards funding and revitalising the third level education sector in terms of capital and current expenditure. Ultimately, that would provide an enormous return for these companies that they are looking for and seeking qualified graduates from the education system to work in their businesses and enterprises.

The Dáil has to discuss the issue of taxation generally. The Committee on Budgetary Oversight was a good exercise in at least starting a detailed conversation on the budget. Globally, the system of taxation is changing. Ireland has to develop a critical plan to have a fair and equitable corporation tax structure, while maintaining, as it is entitled to do, the 12.5% rate. We need an effective minimum corporation tax rate because we cannot have a headline rate of 12.5% which, through various devices, is whittled away to almost nothing. In the light of the current debate on international tax developments, we will be unable to do this anymore. All of us who have been involved and worked in business, including family businesses, understand that in a business one needs to invest. Capital investment needs to be recognised in the tax code. We all know that legitimate business expenses need to be recognised in the tax code, but we cannot have a situation where some businesses, either by arrangement or the use of offshore companies and devices, are able to give the two fingers to the rest of us, particularly those in the PAYE system. That does not actually do anything to generate additional enterprise in Ireland. We know that we need to concentrate on small to medium enterprises, SMEs, and developing employment in indigenous businesses, as well as welcoming foreign direct investment. We have taken some of these approaches to income tax following lots of revelations through the decades and they have been successful. I urge my colleagues to look at this issue in order to obtain very detailed information on the enormous burden of losses in the tax system.

I now turn to section 54 of the Bill. I recognise the good intentions of the Revenue Commissioners in addressing what has been a very difficult and murky area with which to deal, but, as drafted and constructed, section 54 provides for an amnesty with regard to times and penalties for tax defaulters who are using offshore and overseas tax havens to avoid paying their taxes legitimately due in Ireland. I know from my professional background that very few people like paying taxes, but they will pay their taxes which are legitimately due to fund the kind of society that provides the education system, the health system and all of the other services that are needed for the public good, yet there is a small but consistent group of people who are operating offshore to avoid paying tax, while others are paying. In section 54 the implementation date is to be delayed until 1 May 2017. We know that all of the accounting and law firms are constantly in and out of the Department of Finance - we understand this dialogue is important - but the delayed implementation date gives tax defaulters seven months' notice, a period in which they can pay up in Ireland or rearrange their financial affairs to stay one step ahead of the tax man and woman. I thought that the hallmark of Fianna Fáil support for the Government was fairness, but I do not see anything particularly fair about this measure. The Labour Party will seek to bring the date forward to ensure tax defaulters will pay the tax due in the same way that those in the PAYE system have to pay their taxes. There will have to be very detailed discussions on the proposals made by the Minister to ascertain why he is taking such a softly-softly approach to defaulters with overseas assets and offshore income streams.

We know that numbers of Irish people and firms were referenced in the Panama papers published earlier this year. We also know from previous reports and the tribunals that consistently there have been small but significant numbers of Irish people and firms who have used offshore devices to avoid or mitigate their taxes due. One can see it when somebody is talking about a business and there is a little footnote on the company being registered in Vanuatu or some other exotic location. You say to yourself, "I wonder what that is about," and it is mostly about avoiding tax. With the development of the Committee on Budgetary Oversight and other committees, we have an opportunity to look at how we might reform the system in order that people will not cause a scandal and serious loss of revenue to the Exchequer by organising their affairs offshore. The Revenue Commissioners are going to take very welcome action, but it should be taken as quickly as possible. In its alternative budget the Labour Party proposed a beefing up in the fight against tax defaulters, particularly those using offshore mechanisms. Perhaps Revenue and the Minister for Finance might explain whether the Government has obtained additional access to information in the Panama papers on Irish people and companies resident offshore for tax purposes. Revenue might care to share that information with us on Committee Stage.

The Labour Party welcomes the proposals made in the Bill to provide for the payment of tax on property and income held in various property structures, especially real estate investment trusts, REITs. The public has been extremely upset at the idea, and rightly so, that certain vulture funds are able to buy Irish assets cheaply following the crash and have, through various structures, been largely exempt from taxation. This was the subject of detailed discussion and recommendations made by the Committee on Budgetary Oversight prior to the budget. The committee, as well as the finance committee, will want to receive a full account of how the proposals will affect these companies.

It is wrong that we should allow them to continue now that the property market is recovering. In many cases, they will be selling off their interests relatively quickly, that is, looking to flip properties within a three to five-year period, because many of them, in effect, are hedge funds. We need to know the Minister's thinking on this and what he sees as the future for some of these vulture funds. The ones that are long-term property-holding asset companies, which are becoming, if one likes, professional landlords, perhaps owned by pension funds that hold the pension funds of workers, which is a potential development on the Irish property scene about which the Minister has spoken, would be an important part of a serious expansion of the supply of housing in Ireland.

We have been critical of the help-to-buy scheme, but I welcome the sensible reduction of the loan-to-value rule from 80% to 70%. If someone is buying a house for €400,000, he or she would have had to take out an 80% mortgage, or €320,000, to qualify for the scheme. It might not sound it to many in this Chamber, but that is a big mortgage. Reducing the loan-to-value requirement to 70% reduces the mortgage required to €280,000. This is still a big mortgage, but psychologically it is below the €300,000 level and so the move is sensible.

I have had correspondence, as I am sure other Deputies have had, from people who were affected by the 80% rule and I think the reduction to 70% will benefit them. Others, however, are affected by the commencement date. I am sure the Minister and his officials are aware that there have been a number of queries about it. The 19 July refers to the mortgage drawdown date, which is not the same as the date contracts are signed. My understanding is that the applicable date is the date of drawdown of the first set of funds. Will the Minister clarify the situation? We must remember that for those buying a house, as anyone would know if they were to go around Dublin at the weekend, the relevant date is also that on which they enter into contracts with builders and suppliers. The Minister estimates this scheme will cost approximately €50 million. Given that the purpose of the proposal is to encourage, help and enable people to buy homes, I would suggest the rules be amended to give the benefit to those buying a home as early as possible. There seems to be an anomaly between those involved in self-builds and those who are buying a home.

Budget 2017 underlines the absolute dependence of the Government on Fianna Fáil. One thing that is extraordinary about the budget is the lack of focus on Brexit. Brexit is probably the biggest challenge to Ireland since the disastrous bank collapse Fianna Fáil presided over and the collapse of the construction industry, and we all know how dreadfully painful and difficult the recovery has been. We increasingly hear reference to a hard Brexit, but we do not have a person on Mr. Barnier's team yet. The Taoiseach told me yesterday that there were 300 applications or so to work in that section in the Commission. While the Taoiseach was certain a couple of weeks ago that there would be a senior Irish official on that team, he has been unable to say who is that official. It seems from the Taoiseach's reply yesterday that, hopefully, some senior Irish officials will get into the group, but it means that we are very squeezed as a country. There is a lack of focus on what will happen to small and medium-sized businesses and on the complications for ordinary retail businesses that import from the UK as well as the consequences of the disastrous fall in the value of sterling.

Budget 2017 was predicated on a sterling exchange rate of approximately 85 pence to the euro. We know now that sterling has gone above 90 pence to the euro and is hovering about that at the moment. Given that the budget figures were prepared in that context and the volume of trade between Ireland and the UK, have the numbers been run to account for the change in the value of sterling? The difference could mean big changes for the country.

I have a question for the Minister and Revenue about tax avoidance by a small group of very rich people whose children can be gifted houses and valuable apartments ranging from €250,000 to €1 million and more. If someone has five or six children, it can be done five or six times. The impact of these transfers is that the child, often an adult child or someone coming into adulthood, is able to avoid inheritance tax and the family is able to avoid any element of gift or capital transfer taxes. I have spoken to the Minister about this on a number of occasions and he has indicated to me that he has discussed this with Revenue. I understood that he hoped to do something to close the loophole, which only very wealthy people are able to use, but I do not see it in the legislation and wonder what happened.

I have previously commented on the Minister's reference to cutting the debt-to-GDP ratio well below the 60% level required by the EU to 45% and the setting aside of a rainy day fund, if the economy allows it, after 2018. The wisdom of that approach, particularly the rainy day fund, has to be questioned. The country needs a massive upgrade in capital investment. People in urban areas know it and people in rural areas know it just as strongly. The country has been starved of capital investment because of the crash and is now facing the complex challenges of Brexit. It is, therefore, difficult to understand the economic logic of not seeking to bring forward and increase capital investment. However, there is to be a review of the capital investment programme early next year.

It would be useful to get an update on where we are on funding from the European Investment Bank, particularly in critical areas such as education infrastructure and housing. I meet small and large-scale business people frequently. Clearly, the critical thing, which is great from our point of view, for a multinational corporation bringing foreign direct investment to Ireland is that it does not have to draw down or access credit in Ireland. However, a local small, medium or large business, by and large, has to use Irish banks, unless it is a State organisation, such as the ESB, which can access funds on the international markets.

Small and medium-sized building firms continue to experience serious difficulties in accessing funds when they seek to build a small housing development or apartment block. The banks tell us they are sitting on money that they cannot lend because many of these builders have impaired credit histories. If we do not address this problem, we will not achieve the required level of house building. A medium-sized building company that wishes to build a small block of 20 apartments needs to access a credit structure that funds the entire development, rather than one or two apartments. Similarly, modern building processes mean services and so forth must all be provided at the same time. As such, a builder seeking to build a small housing development must be certain about having access to a pipeline of significant funding to commence and finish the development, thereby allowing people who are in a position to buy or rent a new home to do so.

On behalf of the Labour Party, I wrote to the Governor of the Central Bank about the deposit rules for home buyers. I have also spoken to the Minister for Finance, Deputy Michael Noonan, about the issue. Many couples in their late 20s or 30s with two or three children are unable to obtain a mortgage but are paying more to rent a family sized home than they would have to pay for a mortgage. This is particularly true in Dublin. The Central Bank rules for mortgage lending do not take account of the fact that such couples have been paying large monthly rents for long periods. While the Central Bank rules are correctly focused on ensuring home buyers have the discipline to meet the mortgage commitments they enter into, many families paying large rents are not in a position to save significant amounts. If they were to buy a new home, they would receive some help under the new scheme provided for in the Bill, provided they could find the other element of the deposit. On the other hand, if they want to buy a second-hand house, as many people do, because they have an established family and their children are attending school in a particular area, they are not eligible for the grant. This is deeply unfair.

The Dáil, collectively, must get the Central Bank to review its rules. If a person has been paying rent for a long period and meeting his or her commitments over two, three or five years, the established practice is to take this into account when considering his or her creditworthiness as part of the loan approval process. Banks want to know that the person buying a house will meet his or her repayment commitments. There is nothing in the budget for couples who have been paying a large rent for two, three or five years, have children at school and can only buy a second-hand home because the only properties available in the locality are second-hand. This is the case in large parts of Dublin and other large cities. These young families are the backbone of communities, the people who commit to local schools and facilities. The Dáil, collectively, must have a stronger voice in order that the Central Bank will recognise the social implications of being unable to buy a house and having to rent until retirement age. These issues have not featured in the debate thus far. It has been the custom in Ireland for generations that people take on a mortgage when they are younger and later use the equity to help their children to make a start when they are young adults.

In simply talking about houses and the construction sector we are at serious risk of overlooking the social impact of the discrimination against renters in the budget. The dilemma faced by people renting has been completely ignored. Some couples who are renting may have two, one and a half or one job between them and want a family home. There will be plenty of scope on Committee Stage to do something for this group of people.

The Finance Bill confirms the nature of the budget. It is a right-wing budget written for builders, landlords and the wealthy and to allow Ireland to continue to operate as a tax haven, with only token measures included to try to cover this up. We heard much from the Fianna Fáil Party during budget week and again this week about having a tempering effect on the Fine Gael Party - this is, apparently, what political parties now aspire to, as we saw in the case of the Labour Party in the previous Government - and taking the worst edges off what would have been a very bad budget. We see this in black and white in the Finance Bill that has again been written for the 1% and has Fianna Fáil's fingerprints all over it.

The clearest example of the nature of the Finance Bill is in its approach to housing. It is utterly incoherent on the issue, apart from its one common thread of assisting builders and landlords, as opposed to those in a housing crisis. The Government, finally, gave us figures recently for the numbers of social housing completions this year. With well over 100,000 families on housing waiting lists, 117 social houses have been built directly by local authorities so far this year, with a further 120 built by housing associations. A total of 237 properties have been built this year. These figures come after five years when the previous Government built the lowest number of new houses in the history of the State. We heard promises and commitments over an extended period, not last week or last month, that a new approach would be taken by the Government. We have been promised changes in housing provision for some time, but nothing has been done to provide social housing. This is the only way the crisis will be addressed, yet the budget did not contain anything beyond minimal measures. The additional 1,500 houses provided for are a drop in the ocean.

We should contrast this with the two main thrusts of the Finance Bill, namely, a builder's grant dressed up as a first-time buyer's tax rebate and new tax breaks and an extension of existing tax breaks for landlords. These measures paint an accurate picture of the Government's approach of relying solely on the private sector and the free market and the idea that somehow incentivising them with further profits will resolve the housing crisis. This approach has been tried over and over again and has failed.

From where did the idea of the first-time buyer's tax rebate or builder's grant come? It was instructive to listen to the Minister for Finance speaking on the "Six One" news programme on the day of the budget. When he was asked how he knew the tax rebate would boost supply he stated Mr. Tom Parlon and the Construction Industry Federation had assured him that it would.

He was then asked whether this was not going to drive up prices and put money in the pockets of developers, which it is. He said the building industry, the builders and Tom Parlon in particular had assured him this will be effective and builders will move to build affordable houses. Therefore, the lobby organisation that represents big developers in this country goes to the Government and the Minister, Deputy Noonan, and says it wants a grant transferred via a tax rebate for first-time buyers - a grant to builders - and promises they will not just take it as profits but will actually build more homes, and the Minister Deputy Noonan says it is fine and allocates €50 million to pay for it. It is incredible.

The reality of what will happen is that it will not make any difference to making affordable housing available for people and it will just push up house prices. The high threshold of €600,000 means it will push up house prices more than if it had been capped at a lower rate of, say, €200,000, which is the maximum many workers could afford. An interesting element of this is how, while it is supposedly to incentivise developers to get involved in building new houses on the basis of increasing prices, it is also available for self-build homes up to €600,000. If someone builds a home on their own land or their family's land for €600,000, that is not a new starter home, it is a mansion. It is clearly Fine Gael playing to a certain core constituency.

Davy stockbrokers has already projected - accurately, I would say - that the 5% rebate will add 2% to house prices next year so they will increase by 7% rather than 5%. Even in terms of the new 70% loan to value ratio, the big winners are the builders. To the extent that those who buy homes get any benefit whatsoever, it is massively skewed towards those on higher incomes who, therefore, are able to both afford the higher value homes, up to €400,000 and then going up to €600,000, and have paid enough tax in previous years to benefit from the rebate. Even Colm McCarthy, a right-wing economist, has said that for a joint income, this is at the upper limit of the Irish income distribution, and for a single income, this is a grant to the very highest earners in the country. The core approach of the Government in dealing with the housing crisis is to try to drive up the prices of starter homes. Incidentally, the Minister, Deputy Noonan, bemoaned the fact there are no starter homes whereas, until recently, he was telling us that NAMA was assisting in the building of starter homes in the State. That is the core strategy of the Government.

There was an excellent article by Lorcan Sirr in The Sunday Times where he spoke about the absolute incoherence of the approach of the Government. On the one hand, it is pushing up house prices and helping to make them unaffordable for first-time buyers, and the fact the Government is incentivising this with more tax breaks, while simultaneously handing out first-time buyer rebates, shows how incoherent its policy is. While there are first-time buyer rebates on one side, the other arm of the Government strategy is more tax breaks for landlords that will result in an increase in the buy-to-let sector that will drive up house prices further, therefore putting homes even further out of the reach of people.

Let us take a look at the measures for landlords provided for in the budget. There is an extension of the living city initiative, which was previously only available to owner-occupiers but is now available to landlords. The relief per home is capped but there is no limit on the number of homes for which a landlord can claim the relief, so it has the potential to cost a lot of money. Most importantly, in section 15, full interest deductibility in respect of rented residential property will be restored over a five-year period by way of 5% annual increments. That is a big extension of tax breaks for landlords. It was one of the main demands made by landlord lobby groups to the Committee on Housing and Homelessness and it shows the power of landlord lobbying and the influence of that sector, which is not surprising given more than 20% of Deputies are landlords, so they get a sympathetic ear.

The pretext is that of boosting supply and stopping landlords from exiting the market, which is apparently the big fear. We have argued and it has been confirmed that landlords are not exiting the market despite all the scaremongering to that effect designed to get them extra tax breaks. As Lorcan Sirr pointed out, the sector has expanded from 319,000 tenancies at the end of last year to 324,000 in mid-2016. The number of landlords also increased in the 20 months to June 2016. The stock of rental properties in Dublin has risen by 54% since the first quarter of 2011. Despite this, the Government is incentivising buy-to-lets again at a time when there is a huge hangover of buy-to-lets in arrears from before the crash, covering up the fact that Ulster Bank has just sold some 2,000 buy-to-lets in long-term arrears to the Cerberus vulture fund and AIB is reported to be planning to sell off close to €2 billion worth of buy-to-lets in arrears to other vulture funds.

The 5% increase in relief will not make much difference to people in long-term arrears. Instead, that money would be much better spent in having State-owned banks like AIB write down the buy-to-lets in arrears and take them into public ownership for public housing. Instead, it is standing by while thousands of buy-to-let tenants stand to be evicted.

We have been here before in terms of breaks for builders and landlords. Section 23 was obviously part of a smorgasbord of billions of euro of property-related tax breaks that blew up the property bubble and led to a banking and property crash. It did not work in terms of resolving housing needs for ordinary people. It is not going to work now and the same problems are being developed.

The Finance Bill contains tax breaks for businesses and for corporate executives. The context is definitely the post-Brexit scenario and the Government has engaged in a race to the bottom with the City of London in a post-Brexit attempt to attract finance capital and corporate executives, who will add extremely little in terms of real economic activity to this society. There is an extension of the special assignee relief programme to 2020. Section 10, which deals with foreign earnings deductions, a tax break for Irish corporate executives working overseas, has been extended until the end of 2020, with the addition of Colombia and Pakistan as relevant states, and with the number of required days to be spent in a relevant state reduced from 40 to 30.

Section 25 refers to a so-called entrepreneur's relief through a cut in capital gains tax on sales of businesses from 20% to 10%. This is exactly the cut demanded by IBEC, which wanted it cut to 10% in order to explicitly compete with Britain in the context of Brexit. Watch this space, because IBEC also wanted an increase in the lifetime limit from €1 million to €15 million. It was left at €1 million in this budget but the Minister has promised to review it in the future and I would not be surprised if IBEC gets what it wants.

Other tax breaks for the wealthy include section 13, which prevents certain tax avoidance opportunities in regard to personal retirement savings accounts. The question has to be asked why a standard fund threshold is so high at €2 million. It is no wonder the cost of tax reliefs on private pensions runs into billions.

It is also interesting to look at the whittling away of the high income individuals restriction. This was introduced in 2006-07 and tightened in 2011, and is an attempt to reduce the ability of the wealthy to reduce their tax liability to almost nothing through the utilisation of tax breaks. It was designed to ensure there was an effective income tax rate of at least 30% but that has been whittled away by the introduction of new tax reliefs which have not been added to the list of those that are included for the purpose of that calculation. This budget goes even further because, as well as not adding, for example, the special assignee relief programme or the living city initiative, it goes out of its way to take a previously counted tax break off the list in that section 19 takes the employment and investment incentive off the list.

There is a return to government by tax break, through policies that only benefit the rich and misallocate resources away from public services and away from working class people.

A TASC report from 2012 put it extremely well. It states:

The winners are those who have sufficient funds or borrowing capacity to invest in a tax-incentivised scheme. And the winners are those individuals and companies who know how to exploit our tax rates and tax breaks – those who can pay accountants and tax advisers to save them money.

The losers are the rest of us. The losers are those who lack the income or funds to avail of tax breaks. The losers are those paying more in other taxes, such as VAT, to compensate for the revenue foregone through tax breaks. The losers are those bearing the brunt of public spending cuts imposed to pay for tax breaks: children, the elderly, the sick and the vulnerable.

The same is true once again. To cover it all up, there are tokenistic anti-tax avoidance measures.

The crackdown on section 110 arrangements is to be welcomed but the question to be answered concerns why it is anticipated that so little will be raised from it. The figure is only €50 million although some estimate that, by taking on the section 110 arrangements alone, one could raise at least an extra €1 billion. With regard to section 54, the question remains as to why there are penalty mitigation arrangements for tax defaulters at all.

The other big items - the need to close the double Irish in advance of 2020 and the need to close the knowledge development box - are simply not touched, despite the fact that the closure of the knowledge development box, for example, would result in a gain of almost enough to pay for pay equality for all public sector workers.

One has got to admire Fine Gael for its consistency in championing the interests of the landlords and developers and for protecting the interests of corporations. Its ability to do this on a consistent and ongoing basis is truly staggering. It is even more staggering considering that policies of giving tax breaks and incentives to landlords and developers precipitated the greatest economic crisis this State has ever seen. Here we are again, and the party is up to the same tricks and employing the same misguided, dangerous economic policies that precipitated the crisis in the first place. I do not believe my saying this is in any way rhetorical or an exaggeration; in fact, I do not believe one could exaggerate the extent of the stupidity of these policies and the sort of political amnesia required to pursue them given what happened to this country. It is really quite staggering in its proportions.

In broad terms, it is absolutely accurate to state the budget gave crumbs to working people and a bonanza to developers and landlords. The famous fiscal space of €1.2 billion was divided up such that it left but crumbs for the majority of ordinary people and for the public services that desperately need a considerable boost in investment and funding. In so far as some of that money was divided up across Departments and used for the miserable little tax break on the universal social charge, all that the services and ordinary workers got were crumbs. The biggest winners, by a very long margin, were the developers and landlords.

When I go through the detail of the Finance Bill and link it to the budget as a whole, I estimate that at least €0.5 billion, or more, of the overall fiscal space was given to landlords and developers. Not all of it is in this Finance Bill. Quite a lot of it is on the expenditure side. Between the jigs and reels pertaining to tax and expenditure, however, the landlords and developers had a bonanza. There is broad evidence to confirm that. Some €110 million was provided to private landlords in the form of the housing assistance payment scheme, and €137 million was provided in the form of the rental allowance scheme. Some €200 million was provided in infrastructure grants to private developers for building private, for-profit housing. Of course, €50 million was provided through the help-to-buy scheme, as referred to in this Bill. In addition, the interest deductibility section involves another handout to the landlords. The tax break for renting rooms is another tax break for landlords. We will proceed to discuss the other aspects. In broad terms, all the incentives referred to amount to in excess of €0.5 billion for landlords and developers. This is shocking.

Contrast that with what workers got through the miserable 0.5% reduction in the universal social charge burden. This means that someone earning €19,000 gets €1.92 more per week, which is not even the price of a cup of coffee. That is what the lowest-paid workers got. Someone earning €30,000, a little below the average, gets an additional €2.94 per week. These are the crumbs that were given to workers, although €0.5 billion, or more, was given in subsidies, grants and tax breaks to the landlords and developers. It is truly shocking.

Aside from what was given and how the fiscal space was divvied up, the other big story of this Finance Bill, the budget generally and successive budgets is the manner in which Fine Gael has fought relentlessly to protect the most profitable corporations in this country, which are mostly multinationals, to isolate them from having to pay their fair share of tax. According to EUROSTAT, living standards in this country are 15% below the European average. They dropped by 10% during the period of austerity. It should not be a surprise that, according to EUROSTAT, our living standards are on par with those of Greece, Portugal and Spain, all the countries that got absolutely crucified during the austerity imposed by the fiscal boot boys or austerity boot boys of the troika. During the very same period, profits of the corporations have gone through the roof. Apart from a brief dip in 2008 itself, profits have consistently risen, jumping an incredible 44% between 2014 and 2015. National household wealth, net wealth after debts are stripped out, has jumped by approximately €100 billion since 2012 but ordinary people's living standards have been slaughtered, dropping by a full 40%.

The statistics and evidence are absolutely clear. Consider what has happened under Fine Gael and the Labour Party. I shall refer to some of the really ironic comments I heard from Deputy Joan Burton earlier on the need for an effective corporation tax rate, which apparently she is now proposing. This is a Labour Party proposal. I had to rub my ears when I heard Deputy Burton say that earlier.

Strangely enough, we have been proposing in every single budget for the last five years that we impose a minimum effective corporation tax rate and just make corporations pay the 12.5%. The wealthiest multinationals pay on average about 6%. The vulture funds pay less than 1%. We said this to Deputies Joan Burton and Brendan Howlin and the former Deputy, Eamon Gilmore, for the last five or six years, but they absolutely stonewalled us, accused us of engaging in fantasy politics and told us this was nonsense and that there was no money. "There is no pot of gold" was the famous expression. Now, suddenly, in opposition, Deputy Joan Burton apparently has discovered that we should have a minimum effective corporation tax rate and, incredibly, is even credited with making this suggestion in recent media coverage. I remind people that we have been arguing trenchantly for this for five years, saying we need to consider the effective rate. This has been against the stonewalling of the Department of Finance, which recycled the nonsense we got from the Government that our effective corporation tax rate - how many different figures did we have? - hovered around 11.9% or was 10%-odd when it absolutely was not, a fact exposed by the European Commission in the case of Apple. God knows what else will come out when the European Commission investigates several other companies that have engaged in billions worth of such tax avoidance with the collusion of successive Governments led by Fianna Fáil and Fine Gael. No serious moves are being made to do anything about this when they could be made easily. In any case, 12.5% is a miserable rate of tax, far below what ordinary workers must pay, but there is no move to do anything about it. All the Government has to do is impose the 12.5% on the top line figure of corporations' profits before deductions and allowances are accounted for.

Regarding the distribution statistics, I could not get the 2014 figures because I cannot work the Revenue website at all. The statistics for 2011 show a total of €39 billion of deductions and allowances each year, which have probably shot up considerably since then. That is €39 billion worth of tax loopholes. Those are the vulture funds. That is Apple, Facebook, LinkedIn and God knows what else syphoning billions and billions out of the tax system with the collusion of successive Governments and the Department of Finance telling us again and again that the corporations are paying an effective rate. The Department is playing accounting games and engaging in trickery with public representatives trying to get to the bottom of what is a massive, obscene tax evasion scandal in this tax haven that is Ireland. Then we get a budget that just carries on with more of this stuff.

Interest deductibility has not been commented on much. Comments have already been made about the help-to-buy scheme. I repeat that already, within days of the announcement of the rent-to-buy scheme, property developers have increased prices by €30,000 and €40,000. did a very good report showing that a particular developer, Kingscroft Properties in Delgany, has raised the price of a three-bedroom semi-detached house from €395,000 to €427,000, and a five-bedroom detached house from €575,000 to €620,000 since the budget. That is what is happening: an absolute boon to developers and, in the case of landlords, this interest deductibility. People really need to know this stuff. Ordinary people cannot go into banks and ask to borrow €10 million to buy an estate. They would be told to take a hike. They cannot even get mortgages. However, a rich person with millions who wants to invest in, speculate on and profiteer from property can go into a bank and borrow €10 million or €15 million, buy an estate or whatever and then get a tax break on 75% of the annual interest payments on that loan which will give him or her massive profits, whether the estate bought is sold or rented. Before this budget, the figure was 75%. It is now proposed to ramp it up so that 80% of the interest repayment can be tax-deductible, and that will go to 100%. This is just a license for the greedy developers and speculators to profiteer on a massive scale and pay literally not a cent of tax. It is unbelievable. Meanwhile, ordinary people are hammered.

The special assignee relief programme, SARP, tax break has been maintained for high-flying executives to pay less tax because apparently we need them so much to come here and teach us how to engage in tax evasion. That is what we are doing. We are giving them a tax break so they can come over here and engage in massive tax evasion in this country. It is unbelievable.

Brexit and its impact were mentioned. I will finish on this point. Why is Brexit negatively impacting on the Irish economy? It is because of currency speculation. It is the speculators who are affecting the value of the British currency, which is negatively impacting on our economy. Would any Government, seeing this, not want to do something about currency speculation and speculation generally? Would it not therefore enthusiastically support the proposal for a financial transactions tax to impose at least some tax and some disincentive on these speculators? No. We fight trenchantly against the financial transactions tax to facilitate more of these people coming to the IFSC so they can use Ireland as a hub to engage in speculation all across Europe and all across the world, destabilising economies. You could not make this stuff up. There is much more detail to go through on Committee Stage, but this is shocking. It is dangerous, unfair and unjust, and there is no vision for a fairer distribution of wealth and income in this country. Quite the opposite: it is more about concentrating the wealth in the hands of the greediest minority, which has banjaxed this economy over recent years.

I am glad of the opportunity to make some brief comments on the Finance Bill 2016.

One of the 57 sections in the Bill which has attracted much comment among our constituents is section 54, which makes changes to the Taxes Consolidation Act 1997, the Value-Added Tax Consolidation Act 2010 and the Stamp Duties Consolidation Act 1999. The section refers to "penalties for deliberately or carelessly making incorrect returns" and defines "offshore matters" to include relevant accounts, income and gains, relevant property situated and any other "income, gains, accounts or assets" arising or held in a country or territory other than the State. The amendments to the principal Act withdraw from 1 May 2017 the penalty mitigation arrangements currently available to tax defaulters holding accounts and assets offshore. The chairperson of the Revenue Commissioners, Mr. Niall Cody, indicated in a recent interview with The Sunday Business Post that the practice of people mitigating penalties and avoiding criminal prosecutions by making voluntary disclosures on untaxed income when tax evasion has taken place is finally being brought to an end. Of course, commitments like this have been made again and again over recent decades and yet tax scandals such as those revealed in the Luxembourg leaks and the Panama papers continue to enrage compliant taxpayers and all citizens in Ireland and throughout the OECD.

The sums involved in offshore tax evasion continue to be vast, and the Revenue Commissioners report that almost €3 billion in additional tax, interest and penalties has been recovered for the State through Revenue's investigations into offshore evasion. However, several commentators, including the distinguished Sunday Independent journalist, Mr. Gene Kerrigan, have rightly queried the rationale for so-called "penalty mitigation arrangements" for tax defaulters referred to in section 54. There were never such arrangements for PAYE workers, compliant small business and farming or the compliant self-employed. PAYE workers in particular have had no choice but to meet their income tax obligations in real time over the past six decades, since the PAYE system began.

Therefore, is there one law and Finance Bill for the people who control the country and Parliament and another for the mass of hardworking families and individuals? A reading of many of the Bill's provisions would suggest that the people who own the country eventually write our finance Bills.

Why is this provision delayed until 1 May 2017? Why are the super wealthy allowed another future deadline to get their tax liabilities in order or indeed to move assets and accounts through further Finance Act loopholes into more untaxed havens? I put questions like this to the first Minister for Finance I addressed across the floor of this House, the former Minister and Taoiseach, Bertie Ahern. He sanctioned a second tax amnesty in the early 1990s that was supposed to bring all tax due on tax evaded and offshore assets back to the Exchequer. Of course, vast sums continued to be placed outside the remit of our Revenue Commissioners as financialisation of assets grew exponentially down to the crash of 2008. Now eight years later, Part 6 of this Bill is trying to close the stable door once again.

Hopefully, section 55 on changes to the publication of the names of tax defaulters will act to throw further light on defaulters who have failed to pay a settlement sum. However, our constituents rightly ask why the amendments in section 54 do not at least commence from the passage of this Bill through the Oireachtas.

There were lengthy discussions at the Dáil Committee on Budgetary Oversight, of which I am a member, about the avoidance of massive amounts of corporation tax by the misuse of section 110 of the Taxes Consolidation Act 1997. Using the device of a profit-participating note, PPN, vulture funds, often based in a foreign tax jurisdiction, lent their Irish subsidiaries funds to buy bad loans of property in Ireland. The profit-participating notes were repaid from revenue before tax thus almost eliminating all Irish tax owed by the Irish subsidiary vulture funds. Hopefully, section 21 will now begin to address this section 110 scam that has cost the Irish Exchequer so dearly. Section 21 lays down that the coupon in profit-participating notes will not be deductible in calculating the profits of the specified property business unless the PPN is paid to: an individual or company paying corporation tax; an Irish or EEA pension fund; or an EEA citizen or company who will pay tax on receipt of the interest, provided that the payment of the coupon to the EEA citizen or company is not for tax avoidance purposes.

I also welcome section 21(a)(i) which reduces the period within which a company intending to use section 110 of the 1997 Act must inform Revenue within eight weeks of acquiring qualifying assets of €10 million.

There has also been a widespread welcome for section 22 which inserts a new Chapter 1B to Part 27 of the Taxes Consolidation Act 1997. The new chapter provides that Irish real estate funds, IREFs, must deduct a 20% withholding tax on certain property distributions to beneficiaries who are not within the charge of Irish tax, out of profits arising from the funds' Irish land, although certain categories of investors such as pension funds, life assurance companies and other collective investment undertakings are excluded. Section 22 seems to apply to all funds currently in the Irish property market and if so, this is a positive step by the Government. Perhaps the Minister will clarify in his response that section 22 is indeed retrospective in terms of existing vulture funds.

Hopefully, economists like David McWilliams who have been critical of vulture funds' virtual tax-free status are correct when they predict that the introduction of this withholding tax will lead to a fall in the price of commercial property in Ireland and a resulting fall in soaring rents and costs.

I note that Irish real estate funds are defined as investment vehicles where 25% of the value of the vehicle is composed of Irish real estate assets. Have the Minister and Revenue any estimate of the losses to the Exchequer owing to the lack of a withholding tax over the past six or seven years and the likely tax amounts that will accrue to the State from the new tax in 2017? Has he any similar information on the widespread misuse of section 110 of the 1997 Act?

Why did the Minister not move, as he said in last night's speech, to "ensure that the Irish tax base is appropriately protected" in his earlier budgets? After all, I believe this is his seventh budget. He might also tell us how he will ensure that the section 110 regime is maintained for what his speech referred to as "bona fide securitisations". I welcome, of course, that section 21, amending section 110, applies to profits arising from the holding of financial assets based on Irish land and property in the account period from 6 September 2016 and does not permit the section 110 companies to revalue or "mark to market" their assets at that date.

On the issues of section 110, the withholding tax and the performance of vulture funds generally, I commend a number of colleagues in the House who have done outstanding work in investigating this matter. In particular, I commend Deputies Donnelly, Pearse Doherty and Boyd Barrett, who repeatedly brought some of these issues before the House.

Of course, one of the biggest responses by constituents has been to section 8 which inserts into the Taxes Consolidation Act 1997 the provision of an income tax rebate which will be available to first-time purchasers of newly built homes. On 19 July 2016, the new Minister for Housing, Planning, Community and Local Government, Deputy Coveney, launched Rebuilding Ireland - an Action Plan for Housing and Homelessness. At the time he spoke of assistance for first-time buyers and the deposits needed, given the extortionate rents being charged, particularly in the cities.

On budget day the details were announced that a rebate of 5% of the property value, up to a maximum of €20,000, would be paid as an income tax rebate on income tax paid over the previous four years. The rebate would apply only to new builds and self-builds on a property up to a maximum value of €600,000. A mortgage of at least 80% was, at the time, required for eligibility. This, of course, has now been reduced to 70% as the Central Bank was concerned that first-time buyers would take on too much debt. Given that the mortgages are limited at a 3.5 times LTI ratio, surely this now means that the rebate to be given has just been largely negated by the need to have a higher level of deposit, which does not seem to make sense.

In 2015, of the 38,000 new houses sold just 760 were purchased by first-time buyers. A number of young constituents some with families have bought new homes in the past three to six months in Dublin Bay North. The building of our north and south fringe estates in Dublin city and Fingal has finally recommenced in the past year. Thankfully, much-needed homes are at last being supplied by developers in that region and hard-pressed young families and individuals have desperately managed to cobble together a deposit and move into their new homes in recent months. However, they will derive no benefit from section 8 and have fairly asked that the tax rebate should apply to all taxpayers who bought their first new home in the 2016 tax year. Perhaps the Minister might consider this given the depths of the housing crisis.

Many housing agencies and advocates have queried the impact of this demand-side section 8 instrument and whether it will simply result in even higher prices for the still very limited supply of new homes in the Dublin region and other urban areas. Just 75 new social housing units were actually built in 2015 and only 117 new builds have been constructed by local authorities in the first half of 2016. The vast majority of the 13,000 social housing units that were delivered in 2015 were brought forward through the HAP scheme and the private rented market. Section 8 is, therefore, very unlikely to ease the appalling levels of homelessness and rack-renting in the Irish housing market.

The latest available figures from the end of August show that there were 4,248 homeless adults across the country with 2,950 of these in Dublin. At that time, there were also 1,151 families in homeless accommodation across the country with 2,263 children. A total of 998 of these families and 2,012 of these children are homeless in Dublin, including a large number from my constituency. Of course, we also have the hidden homeless that the Acting Chairman would know about so well. On one October night recently, 169 people were engaged with Dublin's Housing First Service. RTE's "Prime Time" estimated that the number on waiting lists for social housing nationally jumped by 2% in the past four months from 135,832 to 139,359, an increase of over 3,500. The Dublin City Council housing list hit a new peak recently with 44,034 people waiting to be rehoused and there are 9,522 families and individuals waiting for social housing for between five and ten years.

The inevitable corollary to these appalling housing list figures is the shocking situation outlined by last August which shows that the average monthly rent nationwide is at its highest level on record with rents rising almost 4% in the second quarter of 2016. In Dublin, the annual rate of rent inflation was 11.1% and rents in the capital are now 5.2% higher than their previous peak in early 2008.

The litany of these awful figures on the housing needs of our constituents will not be remotely addressed by section 8 of this Bill or the other inducements for landlords to which I will refer briefly. Rebuilding Ireland and the earlier housing plans brought forward in the time that the Minister, Deputy Noonan, has held the finance portfolio are a feeble response to a desperate crisis. The deeply ideological position taken by the Ministers, Deputies Noonan and Coveney, of the complete reliance, through HAP and other Finance Bill measures, on the private sector has caused profound suffering for tens of thousands of Irish citizens and their children.

The fact that the hard right has been in charge of our Government for the last six years has created and exacerbated a desperate situation. The Acting Chairman will know that even in 2011 we had a housing crisis, but we now have a worse one.

It is clear that Governor Philip Lane of the Central Bank, in letters to colleagues in this House, is extremely dubious of the efficacy of a demand-side measure like section 8. Governor Lane seems to rightly feel that only a greater level of construction of new homes can restore the totally dysfunctional Irish housing market. As I remarked several times at the Committee on Budgetary Oversight, Governor Lane and his predecessor Patrick Honohan have to take a lot of the blame for the current housing impasse. Their macroprudential rules are singularly unhelpful to first-time buyers. Hard-working, dual-income young couples inform me that they pay rents of €1,300 to €1,500 a month, or more, and could just as well be paying a mortgage. However, because of Governor Lane’s macroprudential rules, they just cannot get a deposit together to buy in most areas of the Dublin Bay North constituency. Hopefully, section 8 will offer some hope to these families but a fundamental revision of the Central Bank macroprudential rules must result from the review to be announced next month. We look forward to discussing that in this House and at the Committee on Budgetary Oversight.

Many constituents have asked whether additional tax expenditures should be incurred through support for landlords. At the Committee on Budgetary Oversight, I have repeatedly raised the whole issue of tax expenditures. When one looks through this budget, there is a list of those expenditures in sections 14, 15, 16, 17 and so on which this House has not been given any costing. We receive a kind of vague costing of parts of the budget for some of them, but the basic figures needed to be able to frame and shape a budget, particularly in terms of tax expenditures, are not available to us. Anybody coming to the House with legislation to spend taxpayers' money or to not collect taxpayers money should come with a fairly precise costing of the expenditure that will result from it. That is not the case at the moment.

While section 12, which amends section 216A of the 1997 Act by expanding the exemption from income tax from €12,000 to €14,000 for 2017 for people letting a room in their private residence, may assist in providing much-needed accommodation for students and single people, other new reliefs are more questionable. For example, section 15 provides for full-interest deductibility in respect of rented residential property in the 1997 Act to be restored over a five-year period by means of 5% annual increments, with 75% to 80% applying to interest accruing after 1 January 2017. Likewise, outside the Fine Gael Party, many citizens have asked why threshold A is being increased from €280,000 to €310,000 for gifts and inheritances taken after 12 October 2016. It is no wonder that many of the 700,000 Irish citizens who rent and have to rent a home may clearly conclude that Minister Noonan and the Fine Gael Party care only for the rights of landlords and property owners, as exemplified by budget 2017 and the Finance Bill before us.

The Ministers, Deputies Noonan and Coveney, could have used this budget and the Finance Bill to gear up the local authorities in terms of planning and construction staff by expanding them and by going back to an era that the Acting Chairman will remember in the 1980s and before when we were building, for the most part, very fine estates across this city and other cities in the country. It would finance the local authorities to use compulsory purchase orders to take the land and build large, social, multi-agency tenure, affordable houses and apartments for our constituents. They chose not to do so and will be judged on this matter in the general election.

Before I pass over to my colleague, I would like to raise the issue that a number of constituents have brought to our attention about section 86 of the Capital Acquisitions Tax Consolidation Act, which allows parents to gift properties to their children without paying tax, once the child has lived in the property for three years and goes on to live there for another six years. The distinguished journalist, Mr. Ken Foxe has done outstanding work on this. It is said that the tax loss from this tax expenditure is something in the order of €120 million a year. In other words, for certain very rich people who can buy houses for €1 million plus for their children and gift them, inheritance tax simply does not arise. I would like to know whether this is the case. A number of my constituents have taken Mr. Foxe's articles and brought them to my attention. Is that the case? What are we going to do about it and what can we do about it on Committee Stage?

Tá tallann faoi leith ag teastáil chun óráid a dhéanamh do sheomra atá folamh, ach is dócha go bhfuil na daoine is tábhachtaí in Áiléar na gCuairteoirí agus sa bhaile ag breathnú ar an teilifís. Buíochas le Dia go bhfuil an rud seo ag dul amach chucu. Táim buíoch as ucht na deise caint faoin mBille Airgeadais. I have to agree with my colleague Deputy Richard Boyd Barrett that it is unjust, unfair and an absolute waste of a golden opportunity. We were all elected to look at matters in a different way. I have repeatedly said in this Chamber that we were not asked to reduce taxes. It is an insult to have a debate around the budget as to how to deal with a fiscal space in terms of a tiny reduction in the USC which put a euro or two into workers' pockets, as opposed to looking at the fiscal space and the other uncollected taxes that we require in order to provide services.

The week before last at the Committee of Public Accounts, the Department of Social Protection made a presentation on its budget, which is, I think, €19.7 billion or €19.9 billion. In the course of that debate, it was established that for the figures available in 2014, 40% of this country would be living in poverty without social welfare payments. Yet, the debate around social welfare is not that 40% of the social welfare comes directly from the Social Insurance Fund and the other 60% from our taxes but it is around fraud in social welfare, even though that occupies a minute part of the social welfare budget.

I brought in a newspaper into the meeting and I have brought it with me again today, and I am coming back to the Finance Bill in terms of tax evasion. I have here the local paper, Connacht Tribune, with a headline referring to a crackdown on fraudsters and an article mentioning actual gardaí on the street stopping cars and trucks in Galway to curb social welfare fraud and tax evasion. Of course, that is for the ordinary person. We are talking about hundreds of thousands of euro there, or a million or two at a maximum. We compare that to the massive tax evasion that is being referred to by those of us proudly on the left and those in Sinn Féin who have highlighted the issue. My colleague, Deputy Broughan, has paid tribute to the three Deputies in particular who have highlighted the misuse of section 110 and other tax loopholes. It is from that type of new politics on this side of the House that the debate has slightly changed and has focused the Government's attention in a minimal way on dealing with tax evasion, somehow trying to change the díospóireacht into what will make us a more equal country and stopping what Deputy Burton referred to when she said that we "reluctantly" pay tax. I proudly pay tax. Anybody I know proudly pays tax, but what we are looking for in return are services. We are looking for a health service and for housing.

That takes me directly to the Finance Bill itself and to section 8 on the grant for first-time buyers. Just about every economist in the country has said that this will add to the price of houses. They have already been quoted. Davy stockbrokers has revised upwards its growth forecast. It expects house prices to grow at a rate of 7% rather than 5%. In the rental sector, the secure rents campaign has come together, made up of five unions and the Uplift online campaign, and is absolutely begging the Government to interfere in the rental market because the prices and the rents are rising by up to 40%. Again, there are absolutely no measures in this Finance Bill to deal with that, which is bad enough, because there are no simple solutions. However, I would have expected a debate about the housing crisis and the rise in rents that are just astronomical. Before taking Galway as an example, I will give an up-to-date figure from Savills. Almost a million people, or to be precise, 856,100 people, are now relying utterly on the private rental sector. That is 856,100 people with absolutely no security of tenure and with rents going up on a daily basis.

I want to mention research by Dr. Padraic Kenna in Ollscoil na hÉireann, Gaillimh. He pointed out the rate of evictions for non-payment of rent is higher than that of evictions for non-payment of mortgage. While mortgage arrears are certainly in crisis, evictions for rent arrears are higher and more acute but there is absolutely nothing in the Bill to deal with them.

Not alone this, but the measures will actually worsen the housing crisis, if this is possible. I do not stand here to give a doomsday scenario; I stand here on the basis of experience, having been elected to Galway City Council in 1999 and having watched the waiting list increase month on month and year on year. The reason for this is each Government, be it Fianna Fáil, the PDs, Fine Gael or the Labour Party, has been utterly reliant on the private market, which got us into the mess in the first place. We have a false debate about those on the left not supporting the private market. There is a role for the private market, but not free reign.

I will take Galway as a microcosm of the country with regard to the latest housing quarterly report issued at the end of October. I use these figures not to be parochial but to make a point as to how the housing crisis is getting worse and worse despite the Rebuilding Ireland document and the roadshow, to which I refer as a circus, travelling the country with the Minister, Deputy Simon Coveney. Prior to this we had the former Minister, Deputy Alan Kelly, with the same type of bombastic rhetoric, not dealing with the problem or even analysing it. If we look at Galway, the last time a social house was built in Galway was 2009. Yes, there have been houses under the voluntary schemes, but the last time we had a direct build was 2009.

We are now in 2016 and no house was built this year. Next year there is a plan for 14 houses as part of an overall scheme of approximately 60 houses. Permission was given under Part VIII in my time for those houses. The question must be asked as to why they have not been built. I understand that somewhere between Galway City Council and the Department of Housing, Planning, Community and Local Government lies the truth. It seems the Department has told the city council to go back and look again at whether more houses can be built on the site and we have a delay for some reason. I would have expected a Minister to ask the city council to tell him or her what land it has zoned residential, precisely where the land is, what planning permissions are extant on it and what needs to be done, with the local authority, to build the houses. This would be a practical approach.

Without a social housing build we will have a housing crisis. Yes, we need the private market, as I have said, but we need direct build by the city council of a mixture of houses. This was done in the past, which is why we kept the housing crisis at bay until such time as we stopped it and took the councils out of it. Under the guise of rhetoric, the Minister and the Government state there is a massive social housing build. There is not. The budget gives €110 million to the housing assistance payment scheme, €137 million to rent allowance and €200 million for infrastructural projects, which really means we will ask private developers to do us a favour and take over and build on the land we zoned residential and bought when the market was booming. The Finance Bill, under various measures including the first-time buyer grant which is a direct benefit to the landlord, will once again rely utterly on the private market, which caused the problem in the first place.

In Galway city as we speak, 4,720 households are on the waiting list. There is much talk about Dublin. At a conservative estimate, the 4,720 households in Galway mean that somewhere between 13,000 and 15,000 people in a city of 72,000 have been on a waiting list for a house since 2002. We are told the only game in town is the housing assistance payment and in the budget a phenomenal figure was added to what was already there to fund the housing assistance payment. What this means for the ordinary people listening and watching is they are taken off the waiting list and put into a private house with no security of accommodation. They move at the whim of the landlord from the east to the west of the city, they move their children from school, and they have all of the other consequences of the lack of tenure and security.

Even worse than this, we use limited staff resources to administer it in Galway. The only delay on rolling it out is due to the lack of staff. When people go on the housing assistance payment scheme they are taken off the waiting list. What is going on is a massaging of waiting list figures and a failure to deal with the housing crisis. Rather than having a housing waiting list we will have a huge transfer list. Nobody in the Government has looked at the equity or legal basis of this, nor how somebody in receipt of a housing assistance payment might get priority to go into a local authority house when a landlord sells a house.

According to the quarterly report, 36 families are staying in for profit hotels or hostels and various other bed and breakfasts throughout Galway city. There are 32 such families at any given time in Galway city. When they turn up, and rightly so, to declare themselves homeless at the city council offices, the staff are under pressure to house them. When an empty local authority house becomes vacant the chances are they might get it because of the pressure. Therefore, complete inequality is built into the service between those who have been waiting patiently since 2002 and those who get into difficulty, and our hearts go out to them, who turn up homeless. We have a complete mess regarding a just and equitable allocation scheme.

A measure of the difficulty is seen in the rent a room scheme, which has increased to €14,000. One would imagine that at some stage we would think rationally and logically and state how will we bring in a budget to help reduce the housing crisis, bring in public transport, and look at long-term unemployment and indigenous industry, which is equally as important as foreign direct investment. However, we seem to go down the road all of the time of tinkering with the system and when the Government is forced by the Opposition to do something it does so in the most minimal of ways. For example, with regard to section 54, it is giving a break until 1 May which, significantly, is workers' day. The Government is giving the big tax evaders a break, and introducing it on workers' day, 1 May 2017. If this is not ironic I do not know what is. I take this opportunity, without any hesitation, to use my voice to say this is a most unequal budget and I will not support the Finance Bill, although it has some good measures to which I referred in a previous speech and I will return to them.

I am delighted to have an opportunity to speak on the Finance Bill 2016. I welcome many of the elements of the budget which the Finance Bill will bring into effect, including the reduction in the rate of USC, which is one of the most hated taxes ever introduced in the country. Some people are giving out about the help to buy scheme, but we have to do something to try to get young people into the housing market. I hope this will give some comfort to people who want to live in their houses. Every Deputy in the House has young couples coming to them telling them they are just not able to get a mortgage to buy a house. When houses are available they go to their parents and grandparents. I hope this will play a role and they will be able to get on the property market.

The rent a room relief scheme is very good for Galway in particular, where we have NUI Galway and GMIT, which are two great colleges which bring in approximately 25,000 students a year to our city. Every year, there is a scramble for accommodation. In one house there could be up to five or six students in one room. I hope with the increase in the threshold it will make more rooms available to students in Galway city in particular.

I acknowledge that in other cities with colleges accommodation needs to be provided for students. If it is not provided, the colleges will be unable to take in students who must have a place in which to stay. Students are significant spenders within cities. They pay a great of money for food and digs and socialising, which are all part of the experience of going to college.

The Minister for Social Protection is talking about introducing a dole payment scheme for the self-employed. They always pay their taxes at the end of the year, but they have always been left aside. Many of them had no work during the downturn and they were not in receipt of social protection payments. I hope something will come from that proposal. I welcome the small reduction in income tax for the self-employed and the €5 increase in pensions. It is small, but it is a step in the right direction. I hope it will be increased by much more in the next budget.

While these positive elements of the budget go some distance along the road, there is a long way to go before we will have anything like fair play for the squeezed middle class. They made the most sacrifices and carried the greatest burden of the economic collapse. They did not cause the problem, yet they were asked to pick up the bill and endure the pain time after time in the past decade. They carried the country on their backs to the stage where there is a recovery in progress. They could also be called "The Forgotten Middle", as they have been hammered on all sides by taxes and charges. They are not earning enough to be comfortable, but their income is in excess of the threshold at which they could benefit from the State supports normally offered to those who are struggling. There is a disturbing lack of support for them and many thousands are struggling just to make ends meet. In almost all cases, the squeezed middle are both cash poor and time poor. Middle income earners still pay more in tax than they did seven years ago. As the Irish Tax Institute confirms, workers only have to earn €33,800 a year before paying half of every euro earned above that figure in direct taxes. If they are lucky enough to receive a €10 a week increase in pay, before they can even blink an eye, income tax, the USC and PRSI have grabbed almost half of it, leaving them with little more than a fiver.

The people in the middle have huge costs in dealing with endless bills for child care and property tax, as well as ever increasing insurance premiums. We all know by how much they have increased in recent years and continue to do so. The House is trying to address the issue and I hope we will find a solution to the problem. It is possible that the price of fuel will increase, which will, in turn, increase the cost of getting to work. All this is in addition to the financial burden of sending their children to school and then to third level. Many are not renewing their health insurance policies because they view it as a cost that they can cut from their stretched budgets, meaning that the State will bear a greater burden if they fall ill. I hope they will not. It is sad that, in some cases, pay day is greeted with relief rather than joy - relief that they have managed to again stagger through the last few days of another month with the remaining meagre few euro from their previous wage packet. The relief is short-lived, of course, as their wages are hoovered up in the following few days by bills for electricity, heating, child care and all of the other regular demands. An unforeseen bill such as a medical expense or a school contribution request is greeted with panic. The wheel keeps turning, month after month, with little relief in sight. The people concerned deserve a little fair play. They did not cause the economic downturn, but they have been asked to pay the most.

The measures included in the Bill are only a tiny step in the right direction. I urge the Government to take steps in the future to bring a measure of fairness to the people caught in the middle who are paying for everything and benefiting from almost nothing.

I too appreciate the opportunity to contribute to the debate on this important Bill which will implement the changes contained in the budget. I refer, first, to the USC and the fact that when it was introduced during the financial crisis, we were told it would be a temporary tax. The charge is crippling all workers who have put their shoulders to the wheel to try to turn the economy around. While the proposed changes are welcome, this is only the start. We want to see a sustained attempt to do what should be done, which is to eliminate the charge. It was a temporary, emergency tax at the time it was introduced and will have to be examined in future budgets because that is what people want and expect.

On the increases in pension and other social welfare payments, one question is being asked continuously. If a budget measure is being introduced to increase taxation, it can be done before midnight on budget day, but social welfare recipients are being told that they have to wait until next March for the increases in their payments to be made. That is unfair on those who are struggling with high increased insurance costs, other charges for health care and day-to-day living expenses. They are genuinely finding it difficult to manage.

Deputy Noel Grealish referred to the squeezed middle. Recently, I was approached by a young garda who had graduated from the Garda College in Templemore and had been deployed in Dublin city. He told me straight to my face that he could not afford to be a garda in Dublin. When accommodation costs and the fact that he is away from home are taken into account, with the reduced money for which gardaí are working, he said, "I cannot afford to be a guard anymore." It was an awful statement for a young person to come out with. It highlights how tight and how tough some people are finding it.

With regard to the self-employed, it is of tremendous importance that people who create employment have the opportunity to avail of State assistance if their business gets into trouble. This has happened through no fault of their own and there was nothing available for them. Even if they had savings, they would only have lasted so long. I have always felt strongly about this issue.

Revenue and the Department examined the equalisation of the rebate on diesel and petrol when drafting the budget. I am glad that it has been desisted from at this time, but in future budgets any attempt to equalise the rebate would have absolutely massive negative consequences for the economy because the rebate would not be equalised downwards to the cost of diesel. In other words, the price of diesel would increase at the pump to the same price as petrol. This would have knock-on negative effects on all aspects of our lives and be detrimental to the haulage industry and everybody involved in the delivery of goods. All costs would increase because of the proposed measure. I want to ensure the people who were dreaming it up will not consider it again because it would not make sense.

I refer to housing. In case anybody says I have a vested interest, I am involved in the business in a small way and want to declare this in case anybody accuses me of anything afterwards. Helping young people to get on the property ladder is of massive importance because young couples want to get out of rented accommodation and do not want to spend the rest of their lives renting. Other European countries have a model whereby people rent all of their lives, but young Irish families want to have their own homes and security of tenure and be able to pass them on to future generations. I welcome some of the measures proposed, but the one elephant in the room when it comes to property is the unused buildings in towns and villages. There are unused properties with shop units downstairs and living accommodation upstairs in every town and village. Every incentive that could be brought forward to ensure investors and others willing to purchase them should be encouraged, whether it be through tax rebates or the provision of grant assistance. Whatever help is provided would breathe new life into communities. Many villages are dead.

Debate adjourned.