I am pleased to speak on this Bill which seeks to give effect to the taxation changes announced on budget day. The Bill also provides for the budget day announcements of a reduction to 4.5% in the 4.75% rate of universal social charge, USC, and an increase in the ceiling at which the 2% rate of USC is payable. We know from the Economic and Social Research Institute, ESRI, that income tax, including USC, is the largest individual source of tax revenue in Ireland, accounting for over 35% of the total. Fluctuations in this source of revenue have a significant bearing on the total tax revenue. The research also finds that income tax revenue automatically increases by 2% for every 1% increase in taxable income. For USC, revenue automatically increases by 1.2% for every 1% increase in taxable income. The results imply that income tax revenues are more sensitive to economic fluctuations than the revenue arising from USC.
While this might appear to be a reason for the Government to leave the USC intact and not seek to abolish it, given how stable a source of income it is, I do think we need to reconsider that position given how hated the tax is among ordinary workers. Hated is the proper adjective, and the Minister of State must know that. It is hated, it is punitive and it is very hard on low-income earners. It is a grossly and inherently unfair system. It was introduced for a short time but, like everything else, it is a source of confidence and supply such as the Government has from Fianna Fáil. It is too cushy for the Government and it does not want to do anything with it for the ordinary people. I would not expect much different from Fine Gael.
I note that the Finance Bill also provides for an increase in the home carer tax credit and the earned income tax credit. This will certainly bring partial relief to the many thousands of people who are affected but it most certainly does not go far enough. Family Carers Ireland has described the budget as bitterly disappointing while acknowledging that the modest €5 increase in weekly social welfare payments to some carers will be a small help. It also accepts that other measures are a step in the right direction, such as the €300 increase in the home carer tax credit, reduced prescription charges for those aged over 70, a €150 million increase in funding for the badly needed disability services, €55 million in additional funding for mental health services, which is very badly needed because there is an endemic mental health problem, and an extra €20 million for the National Treatment Purchase Fund, which will not go anywhere, with people languishing in all kinds of queues. I hope the €55 million for mental health care will be spent on mental health and that there will be a seismic shift towards spending it on therapies and counselling rather than, as most of it is at the moment, on pharmaceuticals and medicines. We need a full re-evaluation of how we deal with mental health, not dishing out prescriptions willy-nilly and greasing the fat paws of those in the pharmaceutical industry.
Family Carers Ireland also says that there are many family carers who may not have seen any benefit from this budget. This is especially true for families juggling paid employment and a caring role, young carers and full-time carers who are not in receipt of carer's allowance due to means testing. They do not get a shilling nor a cent. This is an issue that must be dealt with, especially in light of the findings I highlighted earlier this year that found 7,041 people stated that they provided regular unpaid personal help for a friend or family member. That is a staggering figure and we are lucky to have them. We should praise them and try to support them, not penalise them.
Where would our hospitals be if those 7,041 volunteers were not there? We must look at that.
There is another issue with disability in my county. The initial finding that 138 carers in County Tipperary are aged under 15 is deeply concerning. This situation demands immediate examination. They are little more than children - little adolescents. They should not be expected to be caring. While it is certainly wonderful that they would be interested in caring or helping out, ag cabhrú leis na daoine aosta, it is not appropriate to have that burden placed on them. They need to be in school and at play, involved in sport and other activities their siblings, colleagues and friends are doing, not having the arduous burden of having to care for others. This is disgraceful.
These statistics demonstrate the clear need for Government to prioritise and fully resource carers' needs. It needs to ensure they are provided with every level of assistance possible, which is clearly not happening when young people feel obliged to do that. While, as I said, it is good to look after their loved ones, they should not be the sole carer inhibiting their education, creativity, and participation in sport, music, song, dance, literature, theatre or any activity they enjoy. They should not be tied into houses looking after people.
With a sector of our society providing more than 250,000 hours of care every week - not every year - it is very clear that the work they are doing is of fundamental importance. Without them how would our hospitals and nursing homes operate? We would not cope if those 250,000 hours a week were not provided. We need to show respect for that. It is keeping people out of hospitals and keeping them where they are happiest in their homes where they can make a better recovery. That needs to be reflected in the Government's approach to carers and their families in the future. It is a missed opportunity.
We also note from reports today by Eilish O'Regan that the people in need of HSE home-care packages are waiting for more than two years in some cases for the service while the average delay is three and a half months. A damning new report reveals today that the current waiting list for home-care packages is 6,100. Where is the Government's moral compass? Has it sunk that low looking after the fat cats and everybody else that it ignores these people who have given so much service to the State? They have paid their taxes, raised their families and housed themselves. These people are waiting when they need it most when they are vulnerable, ill and feeble. Some 6,100 are on a waiting list with some of them waiting up to two and a half years.
Eilish O'Regan and other journalists have exposed this, but it is like water of a duck's back for the Minister of State, Deputy D'Arcy, and our Teflon Taoiseach, who is good for spin and PR. As Deputy Naughten said when he resigned ten days ago, the Taoiseach is interested in optics rather than fibre optics and opinion polls rather than telecoms poles. He has an obsession with that. He had the audacity to put a €5 million spin machine in place at the beginning of the year. He, mar dhea, withdrew it, but we are not fooled; we know he still has it. He is like a spinning top. He keeps spinning until he goes out of control and he will fly off it some day in a heap, briste agus caillte. It is disgraceful to have that kind of waiting list and the Government should be ashamed of it.
It is reported that pensioners are finding it more difficult to access home care than was the case a decade ago. The Minister of State and his colleagues have been in government for seven years. When they came to office, it was a case of what they were not going to do while there but it is now more difficult for pensioners to access home-care packages than it was ten years ago. What are we doing in this country? Where are we going? Where is the moral compass? The Minister of State does not have it. If he has it, it is in the soles of his shoes or someplace else? It may be in a spin office up in Government Buildings.
The findings are taken from an investigation by Care Alliance Ireland. I salute the family carers and Catherine Cox. I also salute Councillor Richie Molloy, a manager for family carers in south Tipperary. Care Alliance Ireland executive director, Liam O’Sullivan, estimated there is a gap of 18%, or 4 million care hours, between what is needed and the service people receive. An bhfuil an tAire Stáit ag éisteacht? Those are not my figures; they come from a director of Care Alliance Ireland, Liam O’Sullivan. The gap is not four, 40, 400 or 4,000, but 4 million care hours. The Minister of State should hang his head in shame. That is the gap between what is needed and the service people receive. It is a staggering indictment of the Government and its services.
The Taoiseach stood up this morning proclaiming that €17 billion is allocated to the HSE, €1 billion more than last year. It was a great pronouncement. However, that money is being syphoned off and going into a black hole. The waste is staggering and yet the most vulnerable of all are 4 million care hours short. We have plenty for the private care companies and the prices they charge. That is what this Government is all about - looking after its friends in private places, looking after the retired HSE officials and Department officials who set up their own private services even though they created the gap when they were in the service and they are allowing their own businesses to thrive afterwards. It is disgusting and I feel ashamed to be in any way associated with it.
What has the Minister provided for in this Bill that will prevent this awful situation from getting any worse? Ten years ago it was better. I know we had a crash and a crisis. During the last general election campaign all the Fine Gael talk was about recovery; that did not get it very far.
The Finance Bill also provides for the change in the 9% VAT rate for hotels, restaurants and a range of other services to 13.5%, as well as a 50-cent increase in the excise duty on a pack of 20 cigarettes. We should deal with the cigarettes in another situation. People are addicted to them. Increasing the excise duty every year is not helping the situation for some young people.
However, the increase in the VAT was outrageous. The Government was repeatedly warned. As Deputy Broughan said earlier, Dublin hotels are booming - not all of them, but the majority of them. However, anything outside the Pale is struggling. It was reckless in the extreme to increase that rate of VAT. The Government had all the warnings indicating that we are not having the same recovery. The Minister of State should know that as he comes from the south east in Wexford, which is not having the same boom and madness as there is in this city. It was stupid, foolish, shortsighted and patently wrong.
We know the reaction to this measure has been one of dismay within the tourism sector. In his budget address, the Minister said a review of the 9% VAT rate had found that the measure had done its job. What job? I remember a former Taoiseach with the slogan of "A lot done. More to do." What job? It has done the job in Dublin. Once Dublin is doing fine, to hell with rural Ireland. The old saying of Oliver Cromwell to those in the Minister of State's county and my county of "to hell or to Connacht" prevails under this Government again. It is back again as to hell or to Dublin - the high road or no road, an bóthar dorcha. Tá an bóthar glas i mBaile Átha Cliath but it is not all rosy in Dublin; there are many problems with people homeless and people trying to get a bed for the night and people trying to survive with the cost of living. We need only consider the cost of student accommodation and the disgraceful way they are being treated. These are young people we want to nurture. Mol an óige agus tiocfaidh sí. The Government forgets about that all the time.
The Minister said in the new economic reality it was appropriate to increase the rate of VAT in the tourism sector to 13.5% from January 2019. This will raise €466 million, which is a nice figure. Let us consider the damage it will do to fledgling recovering trade in places like County Tipperary, in towns like Carrick-on-Suir, Clonmel, Dungarvan and right up into Thurles, Nenagh, Borrisokane and all the smaller villages as well as the beautiful lake district in Tipperary and the famed Rock of Cashel. We are increasing the numbers, but now we are going to kill it off. The Minister could have increased it by 1 percentage point without being so greedy. However, he would not listen to anybody.
It may have done its job in some areas of Dublin and in particular the city centre, but it is absolutely the case that this measure is still needed in rural Ireland. Why could the Minister of State not make that point or does he have no say? Is all down to the sacred trio of Leo, Paschal and Eoghan, the three Dublin city slickers who hardly know where Naas is or where Monaghan is?
They know only about Dublin, selfies and spin and everything that goes with them. It was a stupid decision.
On stamp duty, section 46 of the Finance Bill 2018 provides for the extension of young trained farmer stamp duty relief for a further three years, until the end of 2021. That is welcome. Agriculture helped in the recovery of the economy after various recessions, but it has not done so this time because we are in dire straits. The measure provides for a full exemption from stamp duty on transfers of farmland to certain young trained farmers. The exemption from stamp duty has been designed to encourage the transfer of farmland to a new generation of farmers with relevant qualifications. The transfer may be by way of a gift or sale. It is a good measure. In order to be eligible, a farmer must be under the age of 35 years on the date of deed of transfer and also have attained one of the necessary qualifications. This is very important. Farmers need to be up and at it, educated, the best and the brightest. We need to be as good as those anywhere else in Europe. The young trained farmer must also, for a period of five years from the date of execution of the deed of transfer, spend not less than 50% of his or her normal working time farming the land and retain ownership of it. This is punitive enough, but I can see why it is necessary. Transfers by way of lease, or where there is a power of revocation, will not qualify for the exemption. I understand that, too. As Mr. Connor Finnerty has reported in AgriLand, some additional measures were added to the Finance Bill 2018 that had not been announced by the Minister on budget day.
Section 46 of the Bill is also being availed of to bring the legislative provisions that deal with the young trained farmer stamp duty relief and the stamp duty farm consolidation relief into compliance with the EU state aid regulations that apply to them. The provisions include requiring that a business plan be provided for Teagasc before a newly qualified young trained farmer can receive a refund of the stamp duty he or she has paid in the course of a previous purchase of land. As well as this, a cumulative lifetime cap of €70,000 will apply to the amount of tax relief or credit that can be enjoyed by a farmer by way of the young trained farmer stamp duty relief, the stock relief for young trained farmers and the succession farm partnerships tax credit. Provisions will also include a number of other technical changes to the legislation governing the young trained farmer stamp duty relief and the stamp duty farm consolidation relief to ensure they are state-aid compliant.
Income averaging and stock relief are important. They are sought by the IFA and other bodies. The Bill includes details of the income averaging and stock relief changes announced. Income averaging allows eligible farmers to calculate their taxable income as the average of their income in the current year and the previous four years on a rolling basis, thus smoothing their tax liability in a five-year cycle. This is important in a year like this - bliain uafásach, when we had a wet spring with snow, sneachta, and then a severe drought.
Certain farmers are not entitled to avail of the income averaging regime if they, or their spouses or civil partners, earn another income off the land. The amendment recently announced by the Minister will extend the scheme to such farmers. That is welcome. Averaging will apply only to farm profits. The measure will increase the number of farmers who are able to avail of the scheme. Furthermore, stock relief is a relief from income tax in respect of increases in the value of a farm's trading stock. It is allowable as a deduction of a defined percentage amount of the increase in the value of trading stock at the end of an accounting period, over and above the opening value.
The 25% general stock relief on income tax, the 50% stock relief on income tax for registered farm partnerships and the 100% stock relief on income tax for certain young trained farmers were due to expire in December. I welcome their extension, as have all farming bodies. The long-standing reliefs have been extended for a further three-year period.
I have made many suggestions in many areas. I made one about the vulture funds that were buying all of the land in my county, Tipperary, one being Coolmore. The tax reliefs are brought forward for young farmers, small farmers, to allow for the transfer of land in families. The company in question now has 24,000 or 25,000 acres. It is buying and buying. The Government has refused to reinstate the Land Commission. It has turned a blind eye because some years agao its members were all brought to Coolmore and fed and watered. It is disgusting and disgraceful. Not a perch of land can be bought in County Tipperary by any young farmer or anyone with a family farm. The vulture funds which are using Chinese and other money and which have big, fat cheque books are getting the relief. It is time to separate the chaff from the oats. The same applies to the VAT rate which applies to hotels in Dublin by comparison with those in the country. The relief scheme was not set up for these vulture funds. They are no better than the vulture funds that come in from abroad and that are victimising people who require houses. They are also buying houses and getting away scot free and laughing all the way to the bank in using this wonderful scheme which was set up for family farms. They are hijacking and abusing it. We believed the Government would change it this year, but it did not. Therefore, the vulture funds will have another 12 months to do what they like. I will be tabling amendments to the Finance Bill, as I did last year, to try to impose a 50% tax on acquisitions of land-holdings over 750 acres. The Minister knows that would be a high threshold in counties Wexford and Tipperary. In that regard, I draw attention to the figure of 27,000 acres. The vulture funds are buying up all of the straw this year, leaving all farmers without a bit to purchase. That is not welcome in Ireland. It is like having the landlords back again. I came here from the House of Commons in London this morning. The British landlords did not treat our people like this before the first shots were fired in the Civil War at Soloheadbeg in 1919. Those concerned had to pick up arms. Are we going to see something like that happen in County Tipperary, east Waterford, west Waterford, east Cork, County Kilkenny and up into Dublin to stop it? There are other vulture funds, so-called syndicates, up here. What they are doing is wrong. Is the Government so blind that it cannot see that the scheme it brought forward for good reasons is being hijacked and abused by conglomerates such as the one in question and putting ordinary people out of business?