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Dáil Éireann debate -
Thursday, 2 Dec 2021

Vol. 1015 No. 2

Finance Bill 2021: Report Stage (Resumed) and Final Stage

I move amendment No. 11:

In page 20, between lines 28 and 29, to insert the following:

“16. Within three months of the passing of this Act, the Minister shall lay a report before the Dáil, on the income that would be generated by introducing four new income tax bands as follows:

(a) earnings between €100,000 and €150,000 taxed at 50 per cent;

(b) earnings between €150,000 and €200,000 taxed at 55 per cent;

(c) earnings between €200,000 and €275,000 taxed at 60 per cent; and

(d) earnings between €275,000 taxed at 65 per cent.”.

Amendment put and declared lost.

I move amendment No. 12:

In page 20, between lines 28 and 29, to insert the following:

“CHAPTER 4

Wealth Taxes

Reports

16. Within three months of the passing of this Act, the Minister shall lay a report before Dáil Éireann, on the amount of revenue that would be raised if he were to tax the top 5 per cent of households 2 per cent of their accumulated wealth less 1 million for a family home.”.

We raise the issue of wealth taxes every year. We are consistent in believing that we need to have wealth taxes in order to have a just taxation system and additional resources which are badly needed to fund our public services. Of course, the following point is an obvious one but nonetheless well worth reiterating. People ask where we will get the money for the national health service we need and the increased capacity we urgently need, now more than ever, after Covid, for our health service to give us those ICU beds and the public health teams we need; staff our health services; and fix all the school buildings in our education system, many of which are dilapidated, a matter that is now more than ever important given the issue of overcrowded classrooms and Covid transmission. One can go through the list of the money we need in retrofitting and public transport. One has to have the money. One has to get it from somewhere.

However, we are consistent in not making calls for additional spending without proposing sources of revenue. We are the most prudential party in the Dáil. The Government is financing most of its additional expenditure through debt. While interest rates are low, that can change, and our debt profile would be pretty scary if it were to change. We are not against some borrowing, but we would not need to borrow as much if we got the wealthy in our society to pay their fair share of tax, which they do not. That would provide billions extra which we would not have to borrow to put into health, education, housing, public transport, climate measures and so on.

One does not get much change in this country for raising these questions, from the media or political commentators, but the time will come when the wealth tax will be discussed in a serious way and we will keep battering away at it until such a moment. Other countries have wealth taxes and some of them have introduced those wealth taxes recently in the context of Covid-19, which is right and proper because many people suffered significant economic hardship and impacts as a result of Covid-19 whereas others did extremely well during the pandemic. Ireland is one of those countries.

I doubt whether anyone is taking any notice in media circles and they just think these are the sort of things the left always talks about. However, it staggers me and I was staggered once again, when I looked at the latest Central Bank quarterly report with its figures on household wealth, published in November. When we wrote our alternative budget and the wealth tax we proposed, the net household wealth for the entire country, after debts, was €883 billion. At that time, that was a staggering increase of €89 billion on the figure for the previous year. However, when I looked just two months later, it had gone up to €935 billion. In just a few months, the extent of household wealth in this country has jumped enormously. I hope the Central Bank provides a figure on what that would mean per household. It was €177,000, per capita, per household. If that money was spread out, each household on average would have €177,000. In the latest figures, each house, on average, would have €186,000, if that money was spread out evenly. However, of course, the vast majority of people do not have anything even closely approximating that.

I know the Minister will say that is mostly households assets, but it is not. More than €400 billion of that is financial assets. The financial assets have jumped by €13 billion since the last figures produced by the quarterly report. The facts speak for themselves. Rich people have become much richer, because ordinary people have not seen massive jumps of that proportion in their wealth. Many have seen their incomes fall. Many are impacted by energy price hikes, inflation and all that kind of stuff and have been limited to 1% or 2% pay increases, if a public sector worker. Where is all this additional money going? It is going to the 10% who have 53% of all that wealth. They are getting richer. Having money makes money and one becomes wealthier and wealthier, whether it is property or financial assets.

We propose a modest measure to have a tax targeted at the richest 5%, which is 85,000 households that have approximately €3 million to €4 million each in average income, to allow them €1 million for a house. The house does not get taxed. After that, we propose putting a 2% annual tax on what is left. They would not even feel it. Their wealth is accumulating at a much faster rate than that, annually, according to these figures. However, in our budget estimate, doing so would raise €4.9 billion. It is probably more now, given the increase in figures and they would barely even feel it, but that is a considerable sum of money which could come in every year to help fund the social housing, public transport, health and education where we desperately need money.

Once again, we put the proposal and challenge the Government as to why that would not be a fair and reasonable thing to do.

As I informed the Deputy on Committee Stage of the Bill, wealth can be taxed in a variety of ways, some of which are already levied in Ireland. Capital gains tax and capital acquisitions tax are, in effect, taxes on wealth in that they are paid by an individual or company on the disposal or acquisition of an asset through gift or inheritance. Deposit interest retention tax, DIRT, is charged at 33%, with limited exemptions, on interest earned on deposit accounts. Local property tax is a tax based on the market value of residential properties. Any revenue raised from a wealth tax may not, therefore, be additional to the existing forms of wealth taxation, as revenues from those taxes could be affected by the introduction of a wealth tax.

On the issue of household wealth, late last year the Central Bank published a report, Household wealth: what is it, who has it and why it matters. It reports that the survey data indicate an improved financial position and resilience for households prior to the Covid-19 crisis when compared with the situation leading into 2008. I am informed the survey indicates that the net wealth of the median household grew by over €76,000 or 74% to €179,200 from 2013 to 2018, driven primarily by house price growth and decline in mortgage debt. The report is clear that a significant portion of wealth for most households is tied up in the family home. This net wealth grew across the entire wealth distribution while inequality, as measured by the Gini coefficient, fell over the same period. The decline in negative equity from 33% in 2013 to 4%% in 2018 was a key driver of this.

As was confirmed in the recent budget tax policy changes document, a range of metrics demonstrate that, compared with other countries, the Irish tax and welfare systems already contribute substantially to the redistribution of income and the reduction in income inequality. Our income tax system has become even more progressive over time and ranks as one of the most progressive in the OECD. My officials continue to examine all issues relating to taxation, including the taxation of wealth, on an ongoing basis, and they and I will monitor and consider any additional information and data that come to light. I do not, however, have any plans to introduce the wealth tax or to produce a new report on that topic. I therefore cannot accept the Deputy's amendment.

The Deputy referred to the debt situation the country is in and described it as "scary". While the level of debt we hold is much higher than it was in the pre-pandemic period, our debt is now on average funded for a long period and at a low interest rate, which means that if the country continues to reduce our level of borrowing, we will over time reduce the impact of the debt on our country. While I would describe it as a serious issue we have to be aware of in future budgets, I would not at this point describe it as "scary" in terms of the impact it could have on decisions we have to make. It is profiled for in terms of duration and interest rate in such a way that, if we manage our public finances carefully, the country should be able to manage the consequences of that debt.

The Deputy referred to other countries introducing the wealth tax. Perhaps he will inform me if any countries in the European Union have done that and tell me how their experiences inform his.

It is worth saying again, as I always do in this debate, that the survey from the Central Bank indicates a key component of household wealth and the growth thereof in our country is what has happened to the value of residential property. We have a local property tax that taxes the value of the wealth located in family homes. It resembles in many ways the kind of wealth tax the Deputy wants to bring in but he is opposed to the local property tax and wants to see it abolished.

Capital gains tax, capital acquisitions tax and DIRT are, at their current levels, among the highest of any country to which Ireland would compare itself. We have taxes in place already, some of which are a proxy for a wealth tax or equivalent to the impact one could have. In particular, we have a local property tax the Deputy has long campaigned for the abolition of.

I said it would be scary if interest rates rose. That is a vulnerability. I accept interest rates are low at the moment and it is sustainable at this point but that could change. We learned to our cost after the crash in 2008 where that can lead.

I will make an elementary point about the borrowing of money. You borrow off rich people, and you pay them interest. People who have surplus money lend it to people or states who do not have enough money and charge them interest. Therefore, the people who have surplus money are getting richer all the time. That is how the financial assets of the wealthy grow each year. It is simple. I pointed out in terms of wealth accumulation that financial assets, setting aside property assets, grew dramatically by €13 billion since the last figures produced by the Central Bank. Some €400 billion of that €936 billion is financial wealth, not households. A significant amount of that wealth is constituted by multiple properties owned by landlords, vulture funds, real estate investment trusts and so on. All of that is accumulating and generating more wealth for those people.

I do not find the excuses plausible. The amendment would be reasonable and fair and there would be a lot of money raised by it. That is money we badly need in housing, health, education and public transport. Now more than ever with Covid-19, wealth tax is an idea whose time has come.

Amendment put:
The Dáil divided: Tá, 46; Níl, 69; Staon, 0.

  • Andrews, Chris.
  • Bacik, Ivana.
  • Boyd Barrett, Richard.
  • Brady, John.
  • Browne, Martin.
  • Buckley, Pat.
  • Cairns, Holly.
  • Carthy, Matt.
  • Clarke, Sorca.
  • Connolly, Catherine.
  • Cronin, Réada.
  • Crowe, Seán.
  • Cullinane, David.
  • Daly, Pa.
  • Donnelly, Paul.
  • Ellis, Dessie.
  • Farrell, Mairéad.
  • Funchion, Kathleen.
  • Gannon, Gary.
  • Gould, Thomas.
  • Guirke, Johnny.
  • Kenny, Gino.
  • Kenny, Martin.
  • Kerrane, Claire.
  • Mac Lochlainn, Pádraig.
  • McNamara, Michael.
  • Munster, Imelda.
  • Murphy, Paul.
  • Mythen, Johnny.
  • Nash, Ged.
  • O'Callaghan, Cian.
  • O'Rourke, Darren.
  • Ó Broin, Eoin.
  • Ó Murchú, Ruairí.
  • Ó Ríordáin, Aodhán.
  • Ó Snodaigh, Aengus.
  • Pringle, Thomas.
  • Quinlivan, Maurice.
  • Ryan, Patricia.
  • Shortall, Róisín.
  • Smith, Duncan.
  • Stanley, Brian.
  • Tóibín, Peadar.
  • Tully, Pauline.
  • Ward, Mark.
  • Whitmore, Jennifer.

Níl

  • Berry, Cathal.
  • Brophy, Colm.
  • Browne, James.
  • Burke, Colm.
  • Butler, Mary.
  • Calleary, Dara.
  • Canney, Seán.
  • Cannon, Ciarán.
  • Carey, Joe.
  • Carroll MacNeill, Jennifer.
  • Chambers, Jack.
  • Collins, Niall.
  • Costello, Patrick.
  • Cowen, Barry.
  • Creed, Michael.
  • Crowe, Cathal.
  • Devlin, Cormac.
  • Dillon, Alan.
  • Donohoe, Paschal.
  • Duffy, Francis Noel.
  • Durkan, Bernard J.
  • English, Damien.
  • Farrell, Alan.
  • Flaherty, Joe.
  • Flanagan, Charles.
  • Fleming, Sean.
  • Foley, Norma.
  • Griffin, Brendan.
  • Harris, Simon.
  • Haughey, Seán.
  • Heydon, Martin.
  • Higgins, Emer.
  • Hourigan, Neasa.
  • Humphreys, Heather.
  • Kehoe, Paul.
  • Lahart, John.
  • Leddin, Brian.
  • Madigan, Josepha.
  • Martin, Catherine.
  • Matthews, Steven.
  • McAuliffe, Paul.
  • McGrath, Michael.
  • McHugh, Joe.
  • Moynihan, Aindrias.
  • Moynihan, Michael.
  • Murnane O'Connor, Jennifer.
  • Naughton, Hildegarde.
  • Noonan, Malcolm.
  • O'Brien, Darragh.
  • O'Brien, Joe.
  • O'Callaghan, Jim.
  • O'Connor, James.
  • O'Dea, Willie.
  • O'Donnell, Kieran.
  • O'Donovan, Patrick.
  • O'Dowd, Fergus.
  • O'Gorman, Roderic.
  • O'Sullivan, Christopher.
  • O'Sullivan, Pádraig.
  • Ó Cathasaigh, Marc.
  • Ó Cuív, Éamon.
  • Phelan, John Paul.
  • Rabbitte, Anne.
  • Richmond, Neale.
  • Ring, Michael.
  • Smith, Brendan.
  • Smyth, Niamh.
  • Stanton, David.
  • Varadkar, Leo.

Staon

Tellers: Tá, Deputies Richard Boyd Barrett and Paul Murphy; Níl, Deputies Jack Chambers and Brendan Griffin.
Amendment declared lost.

Amendment No. 13 is out of order.

Amendment No. 13 not moved.

I move amendment No. 14:

In page 79, between lines 18 and 19, to insert the following:

"33. Within three months of the passing of this Act, the Minister shall lay a report before the Dáil, on the functioning of section 481 relief for investment in films, particularly in relation to the degree to which it is meeting the requirement to meet "quality employment and training" and to examine whether film producer companies in receipt of the relief are hiding behind short lived designated activity companies (DAC) to avoid taking responsibility for workers employed on film productions supported by the relief.".

This amendment relates to the film tax relief available under section 481 of the Taxes Consolidation Act 1997. I am proposing that we have a proper look at whether the relief is delivering on the conditions that are attached to it to provide quality employment and training, which is the legal requirement of those who receive it.

I have raised this issue many times with the Minister and I acknowledge that he has changed some of the rules, including the introduction of a requirement that the film producer companies in receipt of the relief give an undertaking that they are complying with employment legislation and so on. However, as I have pointed out, those companies are not, in fact, respecting the rights of workers and are not fulfilling the conditions of section 481. They get the relief specifically and only if they provide quality employment and training, which means they must take responsibility for the people employed to work on the films they produce. However, when workers are treated badly, or feel they have been treated badly, when they have been dismissed or not re-employed by these film producers or where collective agreements are not honoured, and they take cases to the Workplace Relations Commission, WRC, the same people who take money from the Government on the basis that they will provide quality employment and training go into the WRC and say, "We could not possibly have an employment relationship with this person." That is really serious.

To give an example, a case was taken to the Labour Court against Element Pictures by a stagehand who worked for the company, which has taken millions of euro in relief over many years, takes money from Screen Ireland and gives the Minister undertakings that it will provide quality employment and training. The CEO of the company told the court: "I wish to illustrate to the court how the specific working arrangements in the production sector prevent a relationship of employment from having existed between the parties." These people are going into the Labour Court and WRC and saying they could not possibly have an employment relationship with the person taking the case, who has worked on a film that is funded by section 481. If there is nothing else the Minister will do, I appeal to him or his officials to go to the WRC when some of these cases are being taken. The people in the film production companies are speaking out of both sides of their mouth. At the same hearing, a representative of Screen Producers Ireland - I am not sure why a representative body for producers was represented at the hearings - said:

I will give further evidence to the court that there is no possible basis, having due regard to the realities of the sector, on which a relationship can be said to have existed between the parties hereto. This is on the basis of the clearly established industry norms and practices governing working arrangements in this sector, including in the operation of section 481.

The representatives of the film producer companies, which are in receipt of €60 million, €70 million or €80 million of section 481 relief a year, are taking the money and saying they will provide employment and then going into the WRC and saying not only is the person not their employee but they could never be their employee because the industry prevents the companies from being an employer. They are saying they are not an employer, which cannot be the case. They get the money to provide employment and then say they do not create any employment and do not have any employees. How do they manage this trick and how does the Government let them get away with it?

The same applies in respect of skills training. A case is being taken at the moment by an apprentice painter who has worked on successive films for Metropolitan Films but was dismissed because he got injured on set. He thought he was an apprentice painter but when he went to question how he could be dismissed, he discovered there was no accreditation. He has been working for several years as an apprentice but is not, in fact, an apprentice, because the company is registered with nobody and there is no qualification process. He is not only out of a job because the construction manager got rid of him but he does not have the three years of qualifications he thought he had and could take somewhere else. He may as well never have been a painter.

This has been going on for years and I have been saying it for years. As I pointed out to the Minister, some of the witnesses who came into the Oireachtas committee in 2018 and raised these points have never worked again in the industry, even though they had a long history of working for the same companies that receive the section 481 relief. I appeal to him to look at this issue. Let us remember that only a few years ago, back in 2018, the film producer companies told the Oireachtas committee there were 17,000 jobs resulting from section 481.

When the Minister examined it - and fair play to him for doing so - in the tax strategy papers, we discovered there were only 2,000 jobs. That is a big difference. It was scrutinised and there were 2,000 jobs. In none of those jobs does the worker accumulate any rights as an employee. Under the operation of law, the Protection of Employees (Fixed-Term Work) Act 2003 confers rights on the workers in this sector who work for the same employer, even if they work from project to project. They are working for the same producer company that is collecting the money, albeit behind different designated activity companies, DACs. That is, of course, how the companies get away with this three-card trick. They say “I'm not the employer, it is the DAC”, even though they set it up and a wholly owned subsidiary of the producer company collects the relief. This is a scam to get away with taking no responsibility for the people who work in this industry.

I will finish on this point. We saw the problem with not having proper regulation of this industry with the Alec Baldwin issue, when somebody got shot and killed on a set in the United States. It was discovered that people were working excessive hours and so on. The apprentice I mentioned earlier in this contribution was being asked to work massively excessive hours.

Thank you, Deputy. You are way over time.

There are real consequences to not having proper employment relationships between the producers and employees in the film industry.

I commend Deputy Boyd Barrett on consistently raising this issue, highlighting it, putting it on the agenda and making me aware of it. It is clear from the concerns that have been raised consistently and that we have heard in this Chamber and in committees that this is an area of concern. Given that companies are supported by this relief, and in light of the grave concerns that have been highlighted time and time again, it would only be of benefit to us to have a report done. From the grave concerns we have consistently heard over the last number of weeks, I think it would be of benefit.

The Taxes Consolidation Act 1997 provides a 32% payable relief for eligible expenditure on film production in Ireland. The scheme is intended to act as a stimulus to the creation of an indigenous film industry in the State, creating quality employment opportunities and supporting the expression of Irish culture. The audiovisual sector has largely continued to function through the most challenging period of the disease and to provide quality employment at a time when so many other elements of the culture sector have been severely impacted.

The protocols put in place by the sector have meant that workers have been in high demand. It is the expectation that in the provision of such opportunities there will be compliance with all applicable employment obligations, including legislative obligations and policies and procedures to ensure dignity at work. To grow the industry in Ireland, we want to see quality and sustained employment and training opportunities in the sector. This is reflected in the undertaking of quality employment which is required to be signed as part of the application process for section 481. This undertaking not only applies to the producer company but also to the DAC. In addition to the requirement to sign an undertaking of quality employment, an applicant company is also required to submit a skills development plan as part of its section 481 application if the relevant project is worth more than €2 million.

There has been good progress over the past year in negotiations between employer and worker representative bodies in the sector. For example, from January 2021, a modernised crew agreement was introduced which promotes good practice, regularises evolving work practices and provides for an industry pension scheme operating under the construction workers pension scheme. A monitoring structure to oversee the operation of the agreement is included, as is a commitment to develop the first work-life balance policy for the film and television industry. The agreement acts as a framework for the industry, covering all grades except film construction. I understand that a proposed construction crew agreement is also under negotiation. My officials will continue to monitor progress in this regard.

In relation to any specific workplace disputes, the WRC and the Labour Court are the organs of the State tasked with the resolution of disputes relating to workplace matters and employment rights. It is appropriate that any relevant claims should be referred to these bodies for adjudication. As a result, I am unable to comment on the specific matters raised by Deputy Boyd Barrett. Taking all these points into account, I do not believe it is necessary to undertake a report as proposed by the Deputies. Therefore, I do not intend to accept this amendment.

I would like to make a broader point to Deputy Boyd Barrett. I recognise his long-standing interest in this issue, and the role he has played in bringing progress about. The sector is making much progress on issues that are of concern to the workers who have raised issues to Deputy Boyd Barrett and to the Oireachtas committee. As I said on Committee Stage, I met with SIPTU and Screen Ireland about the status of their sector, as well as sectoral issues that are relevant to the debate we are having. The picture they gave to me of the industry is quite different from the issues that Deputy Boyd Barrett has raised. I am not saying for a moment that everything is ideal and that there are no issues. There are issues. When SIPTU and Screen Ireland spoke about the progress they are making, they painted a picture of progress that is at odds with the way Deputy Boyd Barrett has described the sector.

Through my officials who are active in the interdepartmental work that is taking place on this sector, I will continue to monitor this issue and look at issues regarding the implementation of section 481. When we were debating this matter a few years ago, Deputy Boyd Barrett read out to me the qualifying section for accessing the tax relief. I think one of the phrases used was “quality employment”. The Deputy asked me if I believed that a tax relief should be available to an employer if quality employment was not being fulfilled. I think I said two things to him in response. The first was that in any workplace, there are always issues with how workers feel about the work they are doing and, in addition, employers sometimes have issues about work and the way an organisation or company is doing its work. The second thing I said to the Deputy was that this industry, as he knows because he has a good grasp of what is going on, is organised project by project. Having said all of that to the Deputy, I still answered “Yes” to his question. I believe that if a condition of access to this tax relief is the delivery of quality employment within our country, that is a condition for this relief continuing to be available in Ireland and in specific projects in Ireland. On foot of that exchange between the Deputy and me, and because of actions taken by my Department after that, I believe progress has been made. In fairness to the Deputy, he acknowledges that progress has been made. He has done so on many occasions. My judgment is that we are at odds on how much progress has been made. Through the Finance Bill and through the engagement of my Department in this matter, we will continue to work away on this agenda. We will continue to look at the industrial relations work that is progressing quite well in this sector to see if we can play a role in supporting that progress.

I acknowledge that the Minister engaged, listened and took action. That action has brought some improvements and it has put a bit more pressure on. However, to be honest, what the Minister is being told by Screen Producers Ireland is not the truth. He needs to look beyond it. I have quoted what its CEO said in a witness statement this year in the Labour Court. She does not just say “this person was not an employee” or a recipient of section 481. She goes on to say that nobody could be. I want the Minister to absorb the significance of her statement that nobody could be.

They are taking money from the taxpayer on the basis that they are going to provide quality employment and training, and then they say they could not possibly be the employer. As a result, they try to prevent the case from ever being heard. The Minister has to issue an instruction that this is not an acceptable position for recipients of this relief to take. They hide behind the DAC and even though it is the producer companies that gets the money, they deny that they have an employment relationship with individuals who worked on those productions. Then all the undertakings mean nothing. The producers are saying that if they had any employees, they would absolutely vindicate their rights under the Protection of Employees (Fixed-Term Work) Act 2003 or the working time directive but they do not have any employees so it does not matter if none of those rights is vindicated because it is nothing to do with them. That is what is happening and certain people do not want the boat rocked. These same companies are getting money year after year so of course they are telling the Minister it is okay. He needs to look beyond that objectively at what protections workers have to ensure their rights are actually being vindicated.

I will continue to monitor this industry and look at the implementation of this relief. I am not going to comment on the individual case the Deputy has referred to because it is not appropriate for me to do so in the Dáil. As the Deputy and I discussed on Committee Stage, we got to an important point in August 2020 when the Workplace Relations Commission reported on the outcome of evaluation work it had done within the sector. It made four recommendations, namely, the maintenance of good industrial relations; the progress of an agenda with regard to skills and training; acknowledging the positive impact of the guilds' role; and placing more focus on improving HR management. For each of those areas, progress has been made. Deputy Boyd Barrett and I both feel that progress has been made, although he feels that less progress has been made than I do. Between this Finance Bill and the next one, I will continue to look at the implementation of this relief and how we can make progress on quality of work and quality of life issues in a way that is agreed between the employer and the employee. That is why the Workplace Relations Commission and the work it does is so important.

In order to have that relationship between employer and employee somebody has to be the employer, but the people who are getting the money are saying they are not employers. This is the point. It is so elementary and it has to be addressed. Screen Producers Ireland is like the film branch of IBEC. It has no entitlement to making an agreement for an industry, particularly when its members say they have no employees. How can it have an industry agreement when its members say that? It is not just about this individual case. Screen Producers Ireland's representative made it clear that the argument it was making on this case applied across the board, regardless of who it was, because its members do not have employees. Therefore, an employment relationship is not possible.

The Minister mentioned skills and training. Imagine a painter who had been working since 2015, thinking he was an apprentice who had accumulated his years in an apprenticeship. The Minister knows how apprenticeships work. This person works away thinking he will be qualified as a painter in four years. This person had been working since 2015 and his worksheets show he was working 70 or 80 hours a week, which is against the law. He then lost his job because he got injured on the job and the producer did not want to take responsibility for that. He then found out he was not an apprentice painter at all, so all that time is gone. Providing skills and training is lip service. People are going to courses but they do not get any accreditation and there are no apprenticeships. This cannot be allowed and it is not allowed in other jurisdictions. It is not allowed in the EU. If cases were taken to the EU courts, and maybe that is where this is going to have to go, they would call out this stuff.

Amendment put:
The Dáil divided: Tá, 45; Níl, 64; Staon, 0.

  • Andrews, Chris.
  • Bacik, Ivana.
  • Berry, Cathal.
  • Boyd Barrett, Richard.
  • Brady, John.
  • Browne, Martin.
  • Buckley, Pat.
  • Cairns, Holly.
  • Canney, Seán.
  • Carthy, Matt.
  • Clarke, Sorca.
  • Connolly, Catherine.
  • Cronin, Réada.
  • Crowe, Seán.
  • Cullinane, David.
  • Daly, Pa.
  • Donnelly, Paul.
  • Ellis, Dessie.
  • Farrell, Mairéad.
  • Funchion, Kathleen.
  • Gannon, Gary.
  • Gould, Thomas.
  • Guirke, Johnny.
  • Kenny, Martin.
  • Kerrane, Claire.
  • Mac Lochlainn, Pádraig.
  • Munster, Imelda.
  • Murphy, Paul.
  • Mythen, Johnny.
  • Nash, Ged.
  • O'Callaghan, Cian.
  • O'Rourke, Darren.
  • Ó Broin, Eoin.
  • Ó Murchú, Ruairí.
  • Ó Ríordáin, Aodhán.
  • Ó Snodaigh, Aengus.
  • Quinlivan, Maurice.
  • Ryan, Patricia.
  • Shortall, Róisín.
  • Smith, Duncan.
  • Stanley, Brian.
  • Tóibín, Peadar.
  • Tully, Pauline.
  • Ward, Mark.
  • Whitmore, Jennifer.

Níl

  • Browne, James.
  • Burke, Colm.
  • Butler, Mary.
  • Calleary, Dara.
  • Cannon, Ciarán.
  • Carey, Joe.
  • Carroll MacNeill, Jennifer.
  • Chambers, Jack.
  • Collins, Niall.
  • Costello, Patrick.
  • Cowen, Barry.
  • Creed, Michael.
  • Devlin, Cormac.
  • Dillon, Alan.
  • Donohoe, Paschal.
  • Duffy, Francis Noel.
  • Durkan, Bernard J.
  • English, Damien.
  • Flaherty, Joe.
  • Flanagan, Charles.
  • Fleming, Sean.
  • Foley, Norma.
  • Griffin, Brendan.
  • Harris, Simon.
  • Haughey, Seán.
  • Heydon, Martin.
  • Higgins, Emer.
  • Hourigan, Neasa.
  • Humphreys, Heather.
  • Kehoe, Paul.
  • Lahart, John.
  • Leddin, Brian.
  • Madigan, Josepha.
  • Martin, Catherine.
  • Matthews, Steven.
  • McAuliffe, Paul.
  • McGrath, Michael.
  • McHugh, Joe.
  • Moynihan, Aindrias.
  • Moynihan, Michael.
  • Murnane O'Connor, Jennifer.
  • Naughton, Hildegarde.
  • Noonan, Malcolm.
  • O'Brien, Darragh.
  • O'Brien, Joe.
  • O'Callaghan, Jim.
  • O'Connor, James.
  • O'Dea, Willie.
  • O'Donnell, Kieran.
  • O'Donovan, Patrick.
  • O'Dowd, Fergus.
  • O'Gorman, Roderic.
  • O'Sullivan, Christopher.
  • O'Sullivan, Pádraig.
  • Ó Cathasaigh, Marc.
  • Ó Cuív, Éamon.
  • Phelan, John Paul.
  • Rabbitte, Anne.
  • Richmond, Neale.
  • Ring, Michael.
  • Smith, Brendan.
  • Smyth, Niamh.
  • Stanton, David.
  • Varadkar, Leo.

Staon

Tellers: Tá, Deputies Richard Boyd Barrett and Mairéad Farrell; Níl, Deputies Jack Chambers and Brendan Griffin.
Amendment declared lost.

I move amendment No. 15:

In page 81, between lines 33 and 34, to insert the following:

“(c) whether the employment generated in the development of the digital game ensures quality employment and training for those employed in its development and in particular to ensure that the digital games development company is not engaged in bogus self employment or employment practices which limit the ability of employees to avail of employment rights legislation,”.

The Minister is proposing to introduce as part of the Finance Bill a relief for the digital gaming sector similar to the section 481 film relief. It will be an additional subsection of section 481. I welcome the idea that we would encourage employment and investment in this sector. There is no doubt it has job potential. While that is very much to be welcomed, as a general point I question whether tax reliefs are the best way rather than direct expenditure to give support and strategically develop employment in a particular industry. In discussions we had at the Committee on Budgetary Scrutiny over the years, a lot of expert economic advice suggested that direct expenditure is often more beneficial in terms of creating industries and employment than tax reliefs. There is always a necessity for some sort of cost-benefit analysis or examination of the best way to support an industry. Any support must be regularly reviewed to ensure we get quality employment.

Given the discussions we had on the earlier amendment on film relief for the audiovisual sector, we have concerns, and we do not want to do anything to facilitate poor quality employment or bogus self-employment. In my view, that is an issue in the film industry. There is a general lack of security in these kinds of industries for employees. We are seeking a review to ensure this is the best way of supporting employment in a sector that we consider to be strategically important.

As an aside, given the previous discussion, because the two are part of the same Finance Bill, it is telling that those who have given the Minister a particular viewpoint on section 481 – I accept I have given another viewpoint – did not want to go into a room with people who disagreed with them when the Minister asked them to agree in principle to set up a stakeholder forum where all views could be heard. The groups to which the Minister referred vetoed that, and they got away with it because they did not want to go into a room with people who had different viewpoints. In order to have a proper assessment of an issue, we need to get everybody in the room.

Look at how much time Deputy Boyd Barrett and I spend together.

Indeed, but let us be honest, we are dependent on the information from the ground. It is difficult to establish the real facts on the ground. It is a hard thing for the officials to do as well. We are all dealing with multiple issues. We are talking to particular people, but we get a better sense when we get everybody in a room, and we hear the different perspectives, especially when we can get in some independent people who have no stake in the game to assess the information. The Minister should consider that also in terms of the previous discussion. It is very telling when somebody does not want to go into a room and openly stand over his or her position. It speaks volumes.

While we welcome the support the Minister is trying to give to an emerging sector and the potential employment that could generate, given that it is a huge growth sector in the world generally, it must be looked at regularly to ensure we are getting the best quality employment and that this is the best way to support that employment and the growth of that sector.

The tax credit for digital games is a cultural relief. Therefore, in order to avail of the credit, a digital game development company must first apply to the Minister for Tourism, Culture, Arts, Sport, Gaeltacht and Media for a cultural certificate. As part of the certification process, the company will be required to complete an undertaking in respect of quality employment to qualify for the relief. This undertaking is similar to the requirement in place under the section 481 film tax credit. The undertaking commits applicants to comply with all relevant employment legislation. It is crucial that employee rights are upheld in all industries and the inclusion of this provision reinforces the importance of adhering to employment legislation in the digital gaming sector.

Should a digital game development company fail to adhere to a condition or obligation specified in the undertaking, the conditions of certification will not have been met, which means that any credit claimed pursuant to an interim or final certificate may be subject to recoupment by Revenue and an application for a final certificate may be refused. In relation to bogus self-employment, this is an issue that is relevant to all sectors and, as such, should be treated in that manner. I am advised that Revenue carries out a comprehensive programme of compliance operations each year across a broad range of economic sectors, including the digital game development industry. Many of the operations are carried out on a multi-agency basis, which can include officials from the Department of Social Protection, DSP, and the Workplace Relations Commission, WRC. The primary role of these joint investigation units is to detect non-compliance with tax and duty obligations, which includes non-operation of the PAYE system on foot of bogus self-employment.

Together with the DSP and the WRC, Revenue has updated the code of practice for determining employment status, which was published in July 2021. The code aims to be of benefit to employers, employees, independent contractors and legal, financial and HR professionals. It is also aimed at investigators, decision-makers and adjudicators in the DSP, Revenue, the WRC, their respective appeals bodies, and the courts. Its purpose is to provide a clear understanding of employment status, taking into account current labour market practices and developments in legislation and case law.

It is important to note that the monitoring of compliance with employment rights legislation is primarily a matter for the Department of Enterprise, Trade and Employment, through the WRC. While the importance of employment rights is reflected in the tax credit for digital games, the WRC remains the appropriate avenue to address non-compliance with employment rights legislation. I therefore do not propose to accept the amendment.

To be clear, insofar as this is modelled on section 481, does the same designated activity company, DAC, approach apply where it is done on a project-by-project basis? What was the Minister's favourite cartoon when he was younger? Was it "Tom and Jerry"? Let us say I am employed by Tom and Jerry DAC and then I am employed by Speedy Gonzales DAC.

I am then employed by Wile E Coyote, DAC, but they are all Warner Brothers. Who was I employed by then? Was I employed by Warner Brothers or by Speedy Gonzales? He was there and he is gone, which is like the DACs. By the time I can take Speedy Gonzales to the WRC-----

There is much evidence that there are some of them around here.

What about the Road Runner?

-----it will take me two years to get into the WRC and Speedy Gonzales is gone over the horizon but Warner Brothers will still be around. I am asking this as a serious question because there is a distinction between how the live-action film industry and the animation industry operate. The animation industry does not go cartoon by cartoon. People are employed by an actual company and they have a job, but in the film industry, they are not. Which is it going to be in the digital gaming sector? Will it be digital game by digital game or will it be a company that actually has employees and a premises that can be seen and it can be verifiably assessed whether there is a growth in employment and that the employment is quality employment and that there is an actual employer and employee?

I do not expect the main vehicle for drawing down this relief to be DACs; I expect that it will be companies involved in the production of games and that they will have a more stable relationship with their employees than would be the case in the film sector. It is not a requirement of this legislation that a DAC be in place to access this relief. I understand that the existence of DACs in the film industry is a legacy of how the sector used to be organised to access tax relief. Whether it will be Speedy Gonzales or the Smurfs, I expect they will all be done by the same company or by different companies as opposed to it being organised around a game. I will leave the discussion as to what my favourite cartoon was to another point for the Deputy.

Is Deputy Boyd Barrett pressing the amendment?

Amendment put and declared lost.

I move amendment No. 16:

In page 94, between lines 33 and 34, to insert the following:

“Report on restricting banks from carrying forward losses

37. The Minister shall, within six months of the passing of this Act, prepare and lay before Dáil Éireann a report on restricting the banks from carrying forward losses against taxable profits in a manner which could result in many institutions paying no corporation tax for the foreseeable future by introducing a 25 per cent cap on profit that can be written off by carried forward losses in any given year and an absolute ten year limit on the use of loss for this purpose.”.

The amendment calls for a report on restricting banks that were bailed out by the taxpayer from carrying forward losses against taxable profits in a manner that results in many of them paying no corporation tax whatsoever, and on the introduction of the 25% cap on profits that can be written off by carried-forward losses in any given year as well as the introduction of a ten-year limit on the use of losses for this purpose. As we enter a new phase of the pandemic, banks are returning to profitability. Indeed, the two largest banks in the sector, AIB and Bank of Ireland, are increasing in scale both with the exit of KBC and Ulster Bank from the market and as a result of recent acquisitions that they have made. Fine Gael amended a law in 2014 to remove the cap to allow bailed out banks to use 100% of the losses they incurred in previous years to be offset against future profits. Up until this change, they could only offset 50% of their prior losses against profits in any given year. We are in a unique situation in having neither a time limit nor a cap on losses that can be carried forward to write off against profits. We are the only country where such restrictions are most justified.

The proposal is that the banks bailed out by the taxpayers should be required to pay corporation tax. All the amendment does is calls for a report to scrutinise this proposal and I hope that he will support this.

The Deputies may recall that in 2018, my Department produced a detailed technical note for the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach on the subject of both bank losses and corporation tax losses more generally. This technical note was published online and is still available. The technical note considered in some detail the potential implications of restricting the use of losses carried forward by the introduction of a specific time limit or sunset clause on loss relief for Irish banks, the wider banking sector and the corporate sector as a whole.

Among other considerations, it examined the possible effect of such a restriction on consumers with the probability that an increased cost base for the banks would be passed on to the consumer in the form of higher fees, higher interest rates on loans and lower deposit rates. It also noted the potential negative consequences for the valuation of the State’s banking investment and for capital levels in the banks with possible resulting regulatory impacts. It also considered the potential effects on competition within the banking sector in Ireland, which is an even more important issue now as banks have since left the market.

Taking all of these factors into account, it would be detrimental to consumers and taxpayers if a restriction was to be placed on the use of losses carried forward by the banks.

I also note that as the three pillar banks each posted losses in their 2020 financial statements as a result the Covid-19 pandemic, it is likely that limited corporate tax liabilities would have arisen for 2020, regardless of the banks historic losses. However, notwithstanding the trading losses forward, the Irish have been paying corporation tax in recent years, which is important to put that on the record of the Dáil, as the tax losses forward are restricted in their use and do not shelter profits made in all of their corporate entities.

To conclude, given the level of analysis that has been published, I do not believe that a further report should be published. I emphasise again that such a change in this area would ultimately affect the valuation of our banks and by affecting this valuation, in turn, will affect the value of our banks to lend, to employ, to invest in the future of our economy and to lend to allow more homes to be built.

The Deputy also compared the availability of this relief in our jurisdiction versus others. Again, I inform the Dáil that in many other jurisdictions, the tax system allows losses to be carried forward to be used to reduce taxable income from other income sources. Ireland’s loss relief system includes features that are more restrictive than in other countries, notwithstanding the fact that we do not have a cap or a sunset clause.

Ultimately, while I can understand the attractiveness of making this case and the political appeal of it, if this policy was to be implemented it would affect the value and the state of our banking sector and, in turn, that would be bad for households, for SMEs who depend on banks for lending, for investment and, ultimately, it would be damaging to our economy, to jobs and to investment in our country. For those reasons I do not support the proposal that is being put forward and given that this matter was looked at in a report by my Department only a few years ago, a further report is not merited.

I am aware of the technical report but, as the Minister said, this was completed a number of years ago. We have to be cognisant of the degree and extent to which the banking market has changed. We can all say that in the past number of years much has changed in general, not just within the banking market. We had quite an interesting discussion yesterday in Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach with KBC representatives. AIB and Bank of Ireland have strengthened their position and their market share and another report, therefore, would be of benefit and of interest. I find it interesting that on these amendments the Minister seems to be coming back to me on why he disagrees with the things that are suggested to be looked at in the report. That is completely fair enough and it is his prerogative to have an opinion on the matter. The point, however, is that this amendment is talking about having a report on and taking a look at this. That technical report happened a number of years ago but I do not see how such a further report would not be of benefit now as things have changed, as we have seen, in the banking market. It can only be of benefit then to take a look at that.

Then we could have a debate on the report or take a look at what it says and see what point of view comes out of that.

For the Government to include a commitment to compile a report on this topic in the Finance Bill, one of the signature Bills the Oireachtas handles every year, would send out a signal that we are considering doing this, but we are not. While such a move is politically attractive and I understand why many who are looking on could see the initial appeal of something like this, those who are looking on at a claim and a debate like this would ultimately pay a price if we were to go down this route. It is the case, as the Deputy has said, that we have had a massive change in the Irish banking system this year, with more to come as we see banks leave the market. We need the banks that are left to lend more and at more competitive rates and we need them to continue to be employers in our country. This measure, if implemented, would be detrimental to those things that are important to our country's economy. Substantively, I take a different view from the Deputy and from Sinn Féin on this issue. For it to be included as a report in the Finance Bill sends out a signal about a matter that should not be followed on or implemented. It is always up to the Committee on Budgetary Oversight whether it wants to initiate either a report or research on the matter.

Deputy Farrell has made most of the points and it is her and Deputy Doherty's amendment. My wider view on banks is that, after we bailed them out, we should have kept them in public ownership, taken them over and developed a not-for-profit banking system. These private banks we bailed out are carrying losses forward and dramatically reducing their tax liabilities year on year. Then their customers pay the highest interest rates anywhere in Europe and they are ruthless when it comes to dealing with their customers. For example, they unload their portfolios of loans to vulture funds. How they get tax breaks is obnoxious to me, but that is an aside.

The Committee on Budgetary Oversight has agreed, whatever about our views on particular tax reliefs and allowances, that they should be seriously scrutinised regularly to assess whether those reliefs, allowances and tax credits are justifiable. While the Minister will clearly not undertake to compile this report, or many of the reports we are looking for, there is agreement in the committee that we need to look at these things because they go under the radar and have gone under the radar for long periods of time. Whereas we rightly have a lot of scrutiny of direct expenditure measures during the budget, we have far less scrutiny of tax reliefs, allowances, deductions and so on and whether they are justified. The issues at stake in these myriad reliefs are as big as the direct expenditure issues.

A wide body of opinion is expressing the same view, namely that we need to study these things in a serious way and on an ongoing basis to assess if these measures are delivering on the objectives for which such reliefs, allowances and deductions were originally established. In this case, are they delivering a good banking sector for us? That is a good question, is it not? A lot of people might seriously ask that question. I was asking about films earlier on but there are many reliefs and we need seriously to scrutinise them. I ask the Minister to consider that and he knows the committee is asking for that. Some of this work has been done in tax strategy papers, but on an ongoing and systematic basis we need to study, scrutinise and assess these tax reliefs, which effectively are a shadow budget that does not get the same level of scrutiny as the conventional budget we hear about on budget day.

I acknowledge that the Minister has a different point of view from my colleagues and I on this. A limit should be placed on the losses that banks carry forward to reduce their tax liabilities and this report should be done as it would be of benefit to us all. It would be important to compile this report.

I have some sympathy for Deputy Boyd Barrett's point, and he and I sat on the Committee on Budgetary Oversight together over two Dáil terms. I know the Minister is aware of the following point but I want to throw it into the debate. I am beginning to hear advertisements on the radio again for financial institutions offering incentives for people to cash in part of their houses and take on a mortgage. These are not the pillar banks but other institutions. The Minister does not need me to explain the consequences of that downstream. It appears attractive today, but in five or ten years' time the consequences of it are catastrophic. The Minister might make a comment on that in the context of this discussion because we are talking about the banks.

The Minister has spoken on the amendment twice so we cannot let him in again. Perhaps he will get an opportunity to comment in the next outing. Is the amendment being pressed?

Amendment put:
The Dáil divided: Tá, 44; Níl, 66; Staon, 0.

  • Andrews, Chris.
  • Bacik, Ivana.
  • Berry, Cathal.
  • Boyd Barrett, Richard.
  • Brady, John.
  • Browne, Martin.
  • Buckley, Pat.
  • Cairns, Holly.
  • Canney, Seán.
  • Carthy, Matt.
  • Clarke, Sorca.
  • Cronin, Réada.
  • Crowe, Seán.
  • Daly, Pa.
  • Doherty, Pearse.
  • Donnelly, Paul.
  • Ellis, Dessie.
  • Farrell, Mairéad.
  • Funchion, Kathleen.
  • Gannon, Gary.
  • Gould, Thomas.
  • Guirke, Johnny.
  • Kenny, Martin.
  • Kerrane, Claire.
  • Mac Lochlainn, Pádraig.
  • Munster, Imelda.
  • Murphy, Paul.
  • Mythen, Johnny.
  • Nash, Ged.
  • O'Callaghan, Cian.
  • O'Rourke, Darren.
  • Ó Broin, Eoin.
  • Ó Murchú, Ruairí.
  • Ó Ríordáin, Aodhán.
  • Ó Snodaigh, Aengus.
  • Quinlivan, Maurice.
  • Ryan, Patricia.
  • Shortall, Róisín.
  • Smith, Duncan.
  • Stanley, Brian.
  • Tóibín, Peadar.
  • Tully, Pauline.
  • Ward, Mark.
  • Whitmore, Jennifer.

Níl

  • Browne, James.
  • Burke, Colm.
  • Butler, Mary.
  • Calleary, Dara.
  • Cannon, Ciarán.
  • Carey, Joe.
  • Chambers, Jack.
  • Collins, Niall.
  • Costello, Patrick.
  • Cowen, Barry.
  • Creed, Michael.
  • Crowe, Cathal.
  • Devlin, Cormac.
  • Dillon, Alan.
  • Donnelly, Stephen.
  • Donohoe, Paschal.
  • Duffy, Francis Noel.
  • Durkan, Bernard J.
  • English, Damien.
  • Farrell, Alan.
  • Flaherty, Joe.
  • Flanagan, Charles.
  • Fleming, Sean.
  • Foley, Norma.
  • Griffin, Brendan.
  • Harris, Simon.
  • Haughey, Seán.
  • Heydon, Martin.
  • Higgins, Emer.
  • Hourigan, Neasa.
  • Humphreys, Heather.
  • Kehoe, Paul.
  • Lahart, John.
  • Leddin, Brian.
  • Madigan, Josepha.
  • Martin, Catherine.
  • Matthews, Steven.
  • McAuliffe, Paul.
  • McGrath, Michael.
  • McHugh, Joe.
  • Moynihan, Aindrias.
  • Moynihan, Michael.
  • Murnane O'Connor, Jennifer.
  • Naughton, Hildegarde.
  • Noonan, Malcolm.
  • O'Brien, Darragh.
  • O'Brien, Joe.
  • O'Callaghan, Jim.
  • O'Connor, James.
  • O'Dea, Willie.
  • O'Donnell, Kieran.
  • O'Donovan, Patrick.
  • O'Dowd, Fergus.
  • O'Gorman, Roderic.
  • O'Sullivan, Christopher.
  • O'Sullivan, Pádraig.
  • Ó Cathasaigh, Marc.
  • Ó Cuív, Éamon.
  • Phelan, John Paul.
  • Rabbitte, Anne.
  • Richmond, Neale.
  • Ring, Michael.
  • Smith, Brendan.
  • Smyth, Niamh.
  • Stanton, David.
  • Varadkar, Leo.

Staon

Tellers: Tá, Deputies Pádraig Mac Lochlainn and Aengus Ó Snodaigh; Níl, Deputies Jack Chambers and Brendan Griffin.
Amendment declared lost.

I move amendment No. 17:

In page 94, between lines 33 and 34, to insert the following:

“Reports

37. Before the publication of the Finance Bill 2022, the Minister shall lay a report before the Dáil, on the impact of the change of the corporate tax rate to 15 per cent, and what measures are needed to ensure that this rate is a minimum effective rate which cannot be circumvented through the exploitation of reliefs allowances.”.

The amendment calls on the Minister to produce a report on the degree to which the 15% corporate tax rate, established as a result of the OECD base erosion and profit shifting, BEPS, process, to which the Government very reluctantly signed up, will be an effective rate of 15% rather than a nominal one.

The Minister will be very familiar with the reasoning behind this kind of amendment. We do not believe the 12.5% rate, which was already one of the lowest in the western world, was ever paid nor anything even close to that because the corporations exploit the array of allowances, reliefs and deductions which allow them to write down their taxable profits to negligible levels. The latest figure the Minister gave at the committee discussions on this was that the effective rate was just under 11%. That calculation can only hold water on the basis of the profits deemed taxable. The problem is that through the use of allowances, deductions and reliefs, these corporations manage to have far bigger profits deemed not taxable. I always find the figures pretty remarkable. I am surprised there is not more scrutiny of them. There is quite a bit of scrutiny at international level by the OECD. That was what prompted the global push for an effective rate because these incredibly profitable corporations were not paying the nominal rates they were supposed to. That is why there has been a push for an effective rate of 15% or more. We think it should be more. The average worker is paying about 20% of their income in tax and we think corporations should at least pay that level of tax on their profits. However, they do not because of the allowances and reliefs.

The figures are fairly dramatic. The Minister will be familiar with them but it is always important to put them on the record. Last year, 2020, the pre-tax profits of corporations in this country were an absolutely staggering €203.815 billion. That was up from 2012 when those profits were €74.775 billion. It is an incredible jump of a 172% increase in profits for corporations between 2012 and 2020. Think about the average worker and how much their pay has gone up over that same period. Is it 1% or 2% in real terms? Arguably, workers' pay has gone down when you take energy price hikes, the cost of living and of accommodation and so on, but the profits of the corporations have gone through the roof. These figures are rarely remarked upon. There is an occasional headline in the business sections of newspapers or the RTÉ website which allude to the staggering profits but there is no real scrutiny of it and less of the actual tax they paid.

Of the €203 billion in profits in 2020, which were up 172% since 2012, how much of that was taxed? We do not know for 2020 because the figures lag but we know that in 2019, when there was €195 billion in profits, only €106 billion, about 50% was taxed. The companies wrote down their pre-tax gross profits by €100 billion using a series of reliefs, deductions and allowances that are detailed by Revenue. I look at them every year. I find them fascinating. Some of the main headings under which they manage to write down their taxable profits include capital allowances, which are defined by Revenue as costs to the Exchequer, that is, the taxpayer. In 2018 the capital allowances were €9.4 billion. Intra-group transactions were €12 billion. That is a cost to the Exchequer. Reconstructions and amalgamations were €273 million. That is a cost to the Exchequer. Losses brought forward were €1.8 billion. Group relief was €536 million. There are slightly lesser ones such as the research and development tax credit which was €335 million. These are some of the big headings under which those gross profits are written down.

The capital allowances and intra-group transactions are in effect the corporations writing their own tax bills by ascribing values to their own intellectual property where they charge themselves for the use of it. One subsidiary of a company charges another subsidiary of the same company whatever cost it likes on the use of an intellectual property - on what is a patent, effectively. They can ascribe almost any cost to that they want. That allows them to write down their taxable profits. Thus the real effective rate is not the 11% the Minister will, I have no doubt, claim it to be in the next few minutes but 5.4% on average. It is very considerably less for the big IT and pharmaceutical companies that are responsible for the vast majority of these profits. We think that matter should be examined and we need to ensure they actually pay 15% on their gross profits.

Deputy Boyd Barrett will be happy to hear I yearn for a world where every enterprise was a social enterprise but we would not get very far with that. I mean that sincerely. I have been fortunate, since I became a Deputy, to be a voluntary board director of a social enterprise and it has educated me greatly on the not-for-profit model. However, we live in a world where private enterprise is front and centre. I would like to see more social enterprise. It is a model that is certainly much more promoted in other countries in the European Union and in much more substantial economies than ours, such as Germany, where it is understood. Under the Covid supports there, social enterprise received significant funding.

Someone needs to have a counterbalancing perspective to the one offered by Deputy Boyd Barrett. We sit on the Committee on Budgetary Oversight and we have been listening to the Irish Fiscal Advisory Council, IFAC, advise us year after year that companies pay so much corporation tax that we are over-reliant on them and there needs to be a shift in our emphasis where raising revenue through tax is concerned. I am thinking of some of the companies that are expanding and are resident in this country. The one that really comes to mind as a beacon at the moment is Pfizer. It is an incredible private enterprise. What a facility to have here. It has a number of facilities. They are very welcome here. I look at the construction jobs provided in the lead-up to the establishment of many of these corporations. I look at the very well-paid jobs and educated workforces they employ, so that people going through our university systems find good and gainful employment and pay lots of tax on the good salaries they earn. I think not just of all the jobs that corporation tax has provided over the last ten to 15 years, but also of all the social protection it has paid, all the hospital beds it has provided and all the universities it has helped to enhance and build. I think of all the development and progression it has enabled this country to make since we began to look outward in this direction and began to attract, to use the cliché, foreign direct investment into this place, which was a backwater until foreign investment took an interest in us. It is not perfect but having been a local authority member, I have made the point at many budgetary oversight meetings that it is not just corporation tax they pay. I am being very rough in my estimate of this but I remember from my time on South Dublin County Council that 90% of the commercial rate was paid, and probably still is, by about 15 companies. Most of them are probably corporations that are housed and accommodated in South Dublin County Council and do business there. I just wanted to give an alternative perspective on that.

I share some concerns about how some of the profits have become obscene during the period of Covid. It would be a better world if we could have a more socially directed private enterprise system but we need to consider the advances that have been made. A year and a half ago we thought we would be getting the vaccine this month whereas we are actually on the third part of the vaccination programme because private enterprise had the resources, expertise, research capacity and production facilities to ramp up and supply certainly the western world to date and enable us to go and live our lives in the meaningful way we want to.

I look forward to the Minister's answer on this. It is an issue that is raised continuously but the public also needs to know the value for money this country has derived from being an attractive place to invest in. That side of the argument needs to be put forward in this debate as well. That is not to say I am in love with the vast profits, because I am not. Corporations need to pay their fair share but in the balance of things, the part played by foreign direct investment in Ireland has been inarguable. Maybe we should hear Deputy Boyd Barrett occasionally say that foreign direct investment and these corporations have been very good for this country and its people.

In the west of Ireland, especially in my own county of Mayo, we are very pleased to have many multinational companies. Allergan, Botox, Baxter and Coca-Cola are all creating very valuable jobs for the community of County Mayo and for Ireland. What worries me is many of these companies would not have invested in rural Ireland if not for the 12.5% corporation tax rate. I hope these companies will not be affected in any way. I know many people who have been working with these companies for over 30 years. They are well paid, well looked after and well respected. They raised their families and put them through college. The only criticism I have of some of these multinational companies is that I would like to see them giving more to communities, in particular. They should put more money into sport, into the Tidy Towns initiative and into working with communities and helping them because they are getting a good dividend out of the tremendous workforce we have.

I remind the Minister and the Government that I would like to see more multinational companies. We have plenty of space for them in rural Ireland. We have plenty of workers for them in rural Ireland. We have a great quality of life for them in rural Ireland. It is fine for Deputies to get up here and talk about the social value and multinational companies. If they do not operate in Ireland they will operate someplace else and I want them to stay in Ireland. I want them to stay and employ the people we have and see them employing more people in Ireland. The more people they employ, the more people and families that can stay. We have enough Mayo people in New York, in Chicago and in Australia. We want to keep as many families as possible working and living in County Mayo. The Minister should let these multinational companies pay their taxes and pay whatever they must pay. It is not a bad word.

There is nothing wrong with profit. There is nothing wrong with people making a euro or a pound. I have worked all my life. I came from a big family of 13 and we learned from the very first day that you had to work. You had to earn what you had to earn and we were damn glad to get any job we could get. We were damn glad to be able to ensure the system was there to protect us when we got sick. We were damn glad to see that under the system that was there, the people who were employing us paid our PRSI and we made our contribution towards it. When we needed that as people came to pension age, it was there for them. Multinational companies are not all a bad word. We have some fantastic companies in the west of Ireland and as I have said, long may they stay. I hope more and more multinational companies will come in and we can get more tax from them because the more we get, the more people will stay and the more services we will be able to provide in this country.

I wanted to say that today because we are very lucky in County Mayo to have a number of multinational companies that are creating employment. It is about keeping jobs, keeping people employed and stopping them from emigrating. There are parties in this country that do not want people working and doing well. They prefer to see them on the ground because they can gain from that. I am not one of those people. I am somebody who wants to support people, help them, bring them on, create jobs for them, give their families an opportunity and let them go to college so they can do well.

It is similar to what I said about emigration. When the Minister, Deputy Donohoe, goes all over the world, he meets people from Donegal, Mayo and Kerry who have the best jobs and are working for the biggest companies. They are proud to be Irish and to promote Ireland. Many of these multinational companies would not have come to this country but for our Irish citizens who had to emigrate because there were no jobs in Ireland for them. I am glad these companies are here and I hope that we get many more. All I can say is that Botox, Allergan, Baxter, Coca-Cola and McHale's of Ballinrobe are all multinational companies. They are not all foreign investment companies. Some of them were created in Ireland and are owned by Irish people. All of them pay their taxes in Ireland and create jobs for Irish people and those who come to the country.

We need to have a rational and sensible debate on corporation tax. This is no reflection on the passion I heard from Deputy Ring but, unless I am misreading it, that is not what this amendment is concerned with. Some companies operating in Ireland will pay a higher rate of tax of 15%. That is acknowledged in the amendment. The Minister for Finance signed up to that on behalf of the State as part of the OECD negotiations. It was the Minister's view, shared by us, that it would have been better if we were able to maintain the 12.5% rate, but we were in negotiations with well over 130 other countries. In my view, the 15% rate allows Ireland to remain competitive, especially given that the Commission has allowed us to operate a dual rate, which means that only those companies that fall under the scope of the OECD will be subject to the minimum effective rate of 15%. As outlined in that agreement, other companies that have less turnover will be subject to the rate that we set in this Parliament, which is 12.5%.

The amendment concerns what we need to have a discussion on. The rate is going up. That is the reality of it for some of these companies. As these are some of the largest companies in the world, there will be a significant tax benefit to the State as a result, if all other things remain equal and their footprints remain in Ireland. These companies should remain here because this will happen not just in Ireland but around the globe so there is no benefit to them in switching to another jurisdiction.

The question here is about having a sensible discussion. Major changes are happening on an international level, which none of us foresaw approximately ten years ago. It is not just about the rate but also about pillar 1 of the OECD agreement. While the dust settles on that agreement and the details are figured out, and some of the devil will be in the detail because interests will start coming to the fore and there will be attempts to exclude this, that and all the rest, as a Parliament we need the type of assessment that is being proposed by Deputy Boyd Barrett. I know he and his party would like to go much further than what is outlined in the amendment. We need an assessment of what 15% means for these companies. What does it mean for the State's revenue? We see the returns coming in today, which are hugely beneficial to the State, of €2.8 billion more than was forecast for this point of the year. These are resources all of us want to ensure we have because that is how we make sure there is a proper contribution. We should never rely on multinationals. It is an additional benefit if they invest in a play park or football field down the road but, first and foremost, they should pay tax so that we in this State can budget for those types of resources for the community.

We need to get the information we are asking for. We should not have to wait until next year for it; we need it at an early stage. Early indications are that pillar 1 is estimated to cost approximately €2 billion. It may cost something shy of that because of some of the changes that happened, but there is a good likelihood that the 15% rate in pillar 2 will offset quite a substantial chunk of that €2 billion. Instead of scrambling in the dark, an assessment needs to be carried out at an earlier stage. We can understand that this might be a moving feast, but there needs to be a proper assessment of what this looks like and what it means. What type of revenue is pillar 2 likely to bring in? The budgetary forecast for the next number of years has already factored in a reduction of €2 billion in corporation tax because of pillar 1. The question we have to ask ourselves at some point is whether that is an appropriate assessment. That assessment was always done with the view that the pillar 2 rate would be kept at 12.5% because that was the negotiating position of the State at that point in time. We now know that the rate is settled at 15%, which means that the number will change, possibly substantially.

We need to have a sensible debate. The debate is much wider than just the numbers that will come in because it is very difficult to forecast corporation tax receipts. The pandemic has had a major impact on those receipts because some of the multinationals are in the pharmaceuticals area, which means the global demand for their products is resulting in higher tax revenue for the State. Any tax head that brings in €2.8 billion is significant, but bringing in €2.8 billion ahead of profile, bringing us up to €14 billion, is hugely significant. It has to be carefully nurtured into the future. That is not to suggest in any way that we do not tax multinationals at the rate of 15%, as has been agreed, or at 12.5% for those that fall outside the scope of the agreement. Our questions are genuine and relate to how we can meet those obligations so that we have a basic minimum effective tax rate. The agreement is not about a headline rate but a basic minimum effective tax rate.

The discussion on all of this needs to be much wider. While I maintain that our competitiveness is assured, even with the OECD agreement, it can only be assured if we invest in other things that attracted many of the companies Deputy Ring talked about to County Mayo, in addition to companies that come to my county and other parts of the region. Our tax rate was an offering we had, and we must always allow ourselves to be competitive on tax, but we also had a highly skilled workforce. We are falling down the international leagues when it comes to our education. Our other offerings that attracted companies included our access to Europe, which is more important now than ever with Britain withdrawing from Europe, the fact that we are an English-speaking nation and our infrastructure. Housing is now a problem for our competitiveness, which is an issue the National Competitiveness Council has raised. When we talk about ensuring these tax heads are maintained, nurtured and, hopefully, grown in the future, we have to look at all the ingredients that ensured these companies came in the first place, how we retain them and how we can attract more into the future.

It is correct that this amendment concerns important issues regarding information on the impact this change in corporate tax will have on the competitiveness of our country and on our national finances. However, this discussion must begin with a recognition of the value these companies bring to our economy and society in the first place. I laud what Deputies Ring and Lahart said when they made a point I have made on many occasions, which is that if we want to improve our public services and create more money to spend on our schools and universities, foreign direct investment plays a critical role for an economy of our size. I believe the policies Deputy Doherty is putting forward are a threat to that. Last night, he voted against the special assignee relief programme, which is one that matters in getting foreign direct investment into our country.

The Deputy's party is against data centres.

Data centres play an important role in the retention and attraction of foreign direct investment into our country. The policies his party is putting forward on personal taxation look to increase the marginal tax rate for people who I accept are well paid, but our levels of marginal taxation play a role in ensuring our country can be competitive. They make a contribution to it and the Deputy's party is against any change in those areas. Deputies Ring and Lahart are right to call out the contribution foreign direct investment and large employers make to our country, but the Deputy sees large employers, entrepreneurship and income as something to be taxed and extracted.

I believe in enterprise in order to support companies created here and companies that come to Ireland. We must have competitive policies that can make a difference. While I understand the appeal of the policies the Deputy has put forward, especially with all our country has gone through in recent years, they are a threat to that enterprise.

I noticed what Deputy Ring said about the impact and role of one company, McHale. It is a fantastic Irish company. What does it do? It was set up in the west of Ireland and sells its equipment and the fruit of its engineering brilliance all over the world. One could also look at Combilift, a similar company in Cavan and Monaghan. Those kinds of firms depend on a competitive regime here in Ireland in relation to things that Sinn Féin wants to change.

I wish to comment on where we are with the OECD changes and what is happening here. The Exchequer returns for November, which were shared a short while ago, reveal a position on our borrowing and tax collection that is ahead of and much improved on where we could have thought we would be a year ago. The reason for this positive position is that we came into a pandemic with an economy with lots of employers in it and with public finances that were in good condition. I accept, in making those points, that there are many other things in our country and society on which many people still want us to do better. However, we now know the value of an economy with its public finances in order, with many employers and with low levels of credit. We are trying to put this pandemic and its economic effects behind us, but it is difficult. Recent days alone have shown how difficult it is.

On the amendment before the House, I have already said that when I have information on the further impact this OECD regime may have on our corporate tax collection and on our economy in the future, I will share it with the Oireachtas. Deputies Doherty and Boyd Barrett are right to look for that and I will share it. We are not at the point at which we have further detail available to allow me to give the clarity for which the Deputies are looking. The corporate tax collection from which we now benefit, due to the companies mentioned by Deputies Ring and Lahart, is playing an incredibly important role in allowing our country to make the steps towards recovery from this pandemic. However, I emphasise that we cannot be in a position in which we depend on that corporate tax take and those receipts to fund the progress we want to make in the future. If this pandemic had not happened - one can say this about many things - our public finances would now be in balance or in surplus, which is what we need if we are to reduce, over time, our reliance on corporate tax. Thankfully, our corporate tax receipts are growing at the moment, but this is happening at such a pace that we need to ensure over-reliance on such receipts does not become an issue.

Deputy Boyd Barrett raised the issue of the difference between the total income and the taxable income of company. He was right to say there is a difference. The Deputy and I debated this on Committee Stage. I will repeat what I said to him in committee - the difference between the income to which he refers and the taxable income upon which the tax is levied can be explained by the use of things like capital allowances and by how business expenses are recognised. These standard features of corporate tax regimes all over the world relate to expenses that are relevant to the location of these companies in Ireland. That, in turn, leads to the building, investment, equipment and construction that create jobs and income here. I do not accept this amendment. As I have said previously, I do not believe reports in finance Bills are the way we should be looking to get further information on matters. When the information is available to me, I will share it with the Oireachtas.

In my own modest way, I was a big believer in and proponent of the rainy-day fund on the Joint Committee on Budgetary Oversight. With regard to what Deputy Doherty said, if there is to be some kind of a windfall, for want of a better term, as a result of this increase in the standard rate of corporation tax, how do we marry that with the consistent commentary by IFAC, the Economic and Social Research Institute, ESRI, and the Governor of the Central Bank in speaking about an over-reliance on corporation tax? How do we set in train some kind of mechanism if we see an increase as a result of the increase in the rate? How do we ensure that is used in the most prudent way? The Minister gestured towards that at the end of his contribution. Has any examination taken place of what changes may occur in corporation tax for 2022 in terms of the revenue we might derive from it? We constantly undershoot the runway when it come to predicting corporation tax revenues. Officials from IFAC and others always find it difficult to explain this point. It has been said for the past five years that we must not become reliant on corporation tax and that there is an over-reliance on it for day-to-day spending. However, we are seeing significant year-on-year increases in corporation tax revenue. What is the thinking on any increased revenues that might come in as a result of the increase in the base rate? What is the stance of the Minister and the Government on how they utilise that money in terms of the rainy-day piece and ensuring we do not become-----

Gabhaim buíochas leis an Teachta.

I apologise. I was not watching the clock.

Under socialism, we would want foreign direct investment. I welcome the jobs. I understand how important they are in many areas, including my own constituency, where a number of these multinationals are located. That does not mean they should not pay their fair share of tax. I will give an example from The Irish Times this year, "Google used 'double-Irish' [which was supposed to be gone in 2015, but lasted until 2020] to shift $75.4bn in profits out of Ireland". In 2019, it shifted them to a holding company, Google Ireland Holdings Unlimited Company, which is based in Bermuda, where there is a zero tax rate. It has no employees at all. That money was shifted out of here.

Due to some of us questioning those things, those companies have started to onshore the intellectual property rights to Ireland. That has given us a significant tax boon, although we still let them off on some of the taxes they should pay. This has happened because some of us started to question the sacred cow of these multinationals. When I was on the finance committee in 2013, Deputy Doherty and I proposed a motion asking for Google, Apple and Facebook to come in to the committee. The committee voted against them coming in and, in fact, turned off the cameras when we were discussing whether they should come in.

That is how scared we were of these companies and I do not think we should be. As Deputy Ring rightly pointed out, they are making a lot of profit out of an educated Irish workforce that speaks English within the EU and they will stay here because they are making so much money. It is reasonable, therefore, to ask them to pay their fair share in tax and that is all we ask. The world is asking them to do that and we should be part of the campaign to make them pay their fair share rather than resisting that just call.

The Minister is at it again saying how terrible things would be under Sinn Féin. Many of the companies Deputy Ring mentioned were here since long before the SARP, including Coca-Cola, Allergan's predecessor and Apple. Is he really suggesting that if we get rid of SARP, they will pack up and go? That is nonsense. The taxation proposals we have on individual incomes above €140,000 leaves the effective rate still below what it was in 2014, when many of these companies were here in the first place. The Minister can outline the bogeyman stuff all he wants but he can also have a proper and sensible conversation about the real needs in society, whether it is children waiting for scoliosis operations, parents suffering as a result of the high costs of childcare or the fact that people cannot get a bed in many of our hospitals. Therefore, he needs to examine how he will resource them and have a proper conversation instead of this bogeyman thing.

Can he imagine if I stood up and said we should increase corporation tax by 2.5% on the wealthiest corporations? I could write his script: "Terrible Sinn Féin wanting to create jobs." He negotiated that. He is the first Minister for Finance in more than two decades to negotiate an increase in corporation tax. He is the fella who slaughtered the sacred cow. I do not criticise him for that but let him not come in here with this scaremongering stuff. I am looking for a proper, sensible discussion and a recognition that the change at OECD level on taxation has eroded our competitiveness. We can still maintain that but the biggest issue that faces us in attracting new investment is housing. Do not listen to Sinn Féin. You will have this "Sinn Féin, this that and the other". Listen to what business is saying. Housing is one of our biggest problems in attracting new investment and retaining investment in the country. Infrastructure and education are other issues. These are the areas we need to focus on. We have ridden this horse and ridden it well for a long time and we need to make sure it is maintained. That means investing in the other areas.

I agree with the Minister. Every country in the world wants to get multinational companies in. Let Deputy Doherty not cod himself. Let him not think there are not countries out there with sweetheart deals we do not even know about. Companies come in here getting paid and trying to get some of these multinational companies out of Ireland and into other countries. We have the jobs.

I do not know why the Deputy is talking down the companies that are here, instead of thanking them for coming and creating employment. Let him not think they are not paying their taxes. Look at the revenue the State gets from them every year. It is well done and we want to get as much as we can off them. We should be appreciative of the revenue we get from them. We are appreciative of the jobs that keep people at home in County Mayo and Ireland. Do not be always knocking this country or multinational companies. I am glad to see them here employing people and paying revenue to the State. I am afraid we will tax them out of the country.

Deputies Doherty and Boyd Barrett have given me a warning this evening. When the next election comes, people would want to start looking at those Deputies' policies. By God, we will not have any worry about corporate tax or multinational companies because they will have them run out of the country if they get into government.

The Minister is increasing the taxes for corporations. The Deputy might not have got the memo.

I do not need any lectures from the Deputy. I did not interrupt him.

It might not have reached Mayo yet.

I have had enough lectures from Sinn Féin. All they are good for is lecturing and promising. By God, when the time comes I hope they will be able to deliver. They will not be able to because there will be no one in the country. They will have run out of the country if Sinn Féin gets into government.

Deputy, there is a chairperson here, a Leas-Cheann Comhairle, chairing the debate.

Did Deputy Boyd Barrett say he was responsible for the onshoring of intellectual property into Ireland?

I said we questioned the issue.

And that questioning led to that happening?

There was international questioning. We were part of it.

That is not what the Deputy said in his earlier contribution. I am glad he clarified it, because if he had said it, though he is a Deputy for whom I have an awful lot of respect, it would be ludicrous to claim that any Opposition Deputy played a role in the onshoring of intellectual property into our country. He said something I will home in on. He said they would stay here. That complacency is the first step in losing what we have. Nobody owes our country a living. Many countries all over the world want the foreign direct investment we have. His view that they will stay here is the kind of complacency that could be at the heart of how we lose jobs that matter so much.

Let Deputy Doherty not come in here and tell me what I can and cannot say in this Chamber. Let him not level such a point to me. I am drawing attention to the fact that the policies he is putting forward are a threat to the jobs that have been created in Ireland and have been attracted here. I refer to the policies on personal taxation and data centres. I know how all of them are attractive individually but, in the round, they are a threat to the openness and stability that has played a role in jobs coming into our country, which, in turn, has allowed us to change our country. There is much change that we have yet to make but to have that change, we need jobs. For an economy of our size, we need big employers. The Deputy's policies are a threat to that.

I would not claim credit for major international changes in corporate tax. However, until we arrived in the Dáil, nobody was willing to question these things. I speak no word of a lie when I say I was on the finance committee and we asked for Google, Facebook and Apple to come in to the committee to explain their tax affairs and effective tax rate. Not only did the committee vote against it, members insisted the cameras were turned off while we discussed whether they would be invited in. That happened. Deputies can check the record. We were so fearful of questioning how much tax they paid. Popular anger across the world, among NGOs and so on, involving countries and people, including people in this country, forced some change on this and the world has not fallen apart because the effective rate has been pushed up to 15%. I would like to see it go a bit further.

I will finish on hard-working people. Last year's figures show that 2 million workers in this country in total earned €130 billion between them. They paid €27 billion in tax between them. Corporations earned €203 billion and paid €11 billion in tax. Workers earn far less but pay far more; corporations earn far more and pay far less. Is that fair or just? If they do not pay a just amount of tax, where will we get the money for the universities, infrastructure, water and housing that, in the end, they depend on too? They will not come here if we do not have those services.

Amendment put:
The Dáil divided: Tá, 46; Níl, 67; Staon, 0.

  • Andrews, Chris.
  • Bacik, Ivana.
  • Berry, Cathal.
  • Boyd Barrett, Richard.
  • Brady, John.
  • Browne, Martin.
  • Buckley, Pat.
  • Cairns, Holly.
  • Canney, Seán.
  • Carthy, Matt.
  • Clarke, Sorca.
  • Connolly, Catherine.
  • Cronin, Réada.
  • Crowe, Seán.
  • Cullinane, David.
  • Daly, Pa.
  • Doherty, Pearse.
  • Donnelly, Paul.
  • Ellis, Dessie.
  • Farrell, Mairéad.
  • Funchion, Kathleen.
  • Gould, Thomas.
  • Guirke, Johnny.
  • Kenny, Martin.
  • Kerrane, Claire.
  • Mac Lochlainn, Pádraig.
  • Munster, Imelda.
  • Murphy, Paul.
  • Mythen, Johnny.
  • Nash, Ged.
  • O'Callaghan, Cian.
  • O'Rourke, Darren.
  • Ó Broin, Eoin.
  • Ó Murchú, Ruairí.
  • Ó Ríordáin, Aodhán.
  • Ó Snodaigh, Aengus.
  • Pringle, Thomas.
  • Quinlivan, Maurice.
  • Ryan, Patricia.
  • Shortall, Róisín.
  • Smith, Duncan.
  • Stanley, Brian.
  • Tóibín, Peadar.
  • Tully, Pauline.
  • Ward, Mark.
  • Whitmore, Jennifer.

Níl

  • Browne, James.
  • Burke, Colm.
  • Butler, Mary.
  • Calleary, Dara.
  • Cannon, Ciarán.
  • Carey, Joe.
  • Carroll MacNeill, Jennifer.
  • Chambers, Jack.
  • Collins, Niall.
  • Costello, Patrick.
  • Cowen, Barry.
  • Creed, Michael.
  • Crowe, Cathal.
  • Devlin, Cormac.
  • Dillon, Alan.
  • Donnelly, Stephen.
  • Donohoe, Paschal.
  • Duffy, Francis Noel.
  • Durkan, Bernard J.
  • English, Damien.
  • Farrell, Alan.
  • Flaherty, Joe.
  • Flanagan, Charles.
  • Fleming, Sean.
  • Foley, Norma.
  • Griffin, Brendan.
  • Harris, Simon.
  • Haughey, Seán.
  • Heydon, Martin.
  • Higgins, Emer.
  • Hourigan, Neasa.
  • Humphreys, Heather.
  • Kehoe, Paul.
  • Lahart, John.
  • Lawless, James.
  • Leddin, Brian.
  • Madigan, Josepha.
  • Martin, Catherine.
  • Matthews, Steven.
  • McAuliffe, Paul.
  • McGrath, Michael.
  • McHugh, Joe.
  • Moynihan, Aindrias.
  • Moynihan, Michael.
  • Murnane O'Connor, Jennifer.
  • Naughton, Hildegarde.
  • Noonan, Malcolm.
  • O'Brien, Darragh.
  • O'Brien, Joe.
  • O'Connor, James.
  • O'Dea, Willie.
  • O'Donnell, Kieran.
  • O'Donovan, Patrick.
  • O'Dowd, Fergus.
  • O'Gorman, Roderic.
  • O'Sullivan, Christopher.
  • O'Sullivan, Pádraig.
  • Ó Cathasaigh, Marc.
  • Ó Cuív, Éamon.
  • Phelan, John Paul.
  • Rabbitte, Anne.
  • Richmond, Neale.
  • Ring, Michael.
  • Smith, Brendan.
  • Smyth, Niamh.
  • Stanton, David.
  • Varadkar, Leo.

Staon

Tellers: Tá, Deputies Richard Boyd Barrett and Paul Murphy; Níl, Deputies Jack Chambers and Brendan Griffin.
Amendment declared lost.

For the information of the House, we recommenced discussing this important Bill at 3.21 p.m. and, in the period since, we have dealt with seven amendments. There are 26 amendments remaining that are in order and we must finish at 8.21 p.m.

Amendment No. 18, which is in the name of Deputy Doherty, will be discussed with amendments Nos. 35 and 40.

I move amendment No. 18:

In page 96, between lines 3 and 4, to insert the following:

"Report on the application of capital gains tax to all sales of property by REITs and IREFs

40. The Minister shall, within six months of the passing of this Act, prepare and lay before Dáil Éireann a report on the application of the full rate of capital gains tax of 33 per cent to all disposals of property of the rental business of a REIT, IREF, or group of REIT or IREF.".

I support the Ceann Comhairle's earlier comments. I, too, believe there should not be a guillotine on this Bill. That said, we will try to make as much progress as possible.

Amendments Nos. 18 and 35, which we discussed on Committee Stage, deal with the tax treatment of real estate investment trusts, REITs, and Irish real estate funds, IREFs, and the broader economic impact of these institutional investments on the housing market. I will begin with their tax treatment in the application of capital gains tax, or, more to the point, how that tax does not apply to them. Investment funds in the housing market pay no capital gains tax on their disposal of assets. It is normal practice when property is sold for a profit that this tax is applied at 33%, payable to the Revenue Commissioners within a few months of the property's disposal. This applies to individuals and companies selling properties. It also applies to large developers such as Glenveagh and Cairn Homes, but REITs and IREFs are exempt from it. This exemption is a massive and unjustified benefit for funds, which can keep accumulating money within the fund tax free. That is what is happening, with none of the gains subject to dividend withholding tax unless the money leaves the fund.

I will provide two examples. Last year, Kennedy Wilson sold one of its key Irish properties, Baggot Plaza in Dublin, to a German property investor for €141 million, making a profit of $85 million. All of that gain was exempt from capital gains tax. Kennedy Wilson made clear that the proceeds of the sale, all of them exempt from capital gains tax, would be recycled into new opportunities, a tax advantage not available to any struggling homebuyer, landlord or any other company. Similarly, Irish Residential Properties REIT, IRES, last year sold a 151-apartment portfolio to Orange Capital Partners for €48 million, a sale that, again, was exempt from capital gains tax. If we are to rebalance our housing system, which is completely out of control and failing to deliver affordable homes for purchase or cost rental, then we need to examine and remove these generous tax advantages that have been gifted to funds by the Minister. That will include getting rid of the capital gains tax exemption. These funds pay no corporation tax on their rental profits and no capital gains tax on the disposal of their assets. These are tax advantages that domestic landlords and other companies in this State do not enjoy.

There are Members in this House, many of them in the Minister's party, who are landlords. That is fine and they pay tax on their rental income. Landlords right across the State pay tax on their income from rent, as is right and proper. Many of them complain the tax rate is too high and we heard a contribution yesterday relating to that argument. They all pay tax on their rental income, however, while these funds pay none. One of the funds is the largest landlord in the State. They are recycling their profits to build up more assets and when those assets are disposed of in the future, no capital gains tax will apply.

In May of this year an article in The Irish Times reported that institutional property investors, IREFs, paid an effective tax rate of 17.9% in 2020 based on taxable events in 2019. That taxable event is important. A taxable event is only what is deemed to be taxed. Collecting your rent is not a taxable event, if it is exempt from tax in the tax code, nor is disposing of an asset. The Minister also relayed the figure of 17.9% in a parliamentary reply in June. The figure was again regurgitated on the radio by the Minister of State, Deputy Fleming, who claimed that on any profits being made there is a tax of 20% or 25% depending on the structure and any profits that they make are taxed at that higher rate, double the rate of corporation tax.

That statement just is not true. Those are the facts of it. The figure of 17.9% was relative to the taxable event, meaning distributions to shareholders. It was not relative to rental properties or rental profits. This is because the tax code we are discussing this evening deems that rental profits for these fund structures are not to be taxed. The Minister of State was, therefore, ill-informed, inaccurate, misleading or whatever you want to say.

In 2019, tax paid by IREFs relative to pre-tax profits was 9.1%, less than the 25% paid by any other landlord in the State and less than the 12.5% paid by any other company. That is the point. If you are a landlord, you pay that. If you are a company you pay the 12.5%, but these funds are paying 9.1% relative to their pre-tax profits. I am sure the Minister is going to use his numbers to suggest it is 17.9% in taxable events, but that is all nonsense if you say all of this over here is not a taxable event even though it is a taxable event for all the other landlords and the other companies which are not IREFs and REITs. Furthermore, as I said, they are exempt from capital gains tax entirely.

We disagree with the Minister on this policy issue. I am sure he will tell us that Sinn Féin’s policies would be terrible for everybody, that he is doing this for the young ones who want to try and get on the property market and all the rest, and that is why they have to allow all these structures to go tax free on the €2,000 euro rents they are charging in this city. We believe that the tax advantages enjoyed by these funds is pricing struggling home buyers out of the market and driving up rents. They have a competitive advantage. We also know these funds, in the vast majority of cases, are buying up properties subject to forward purchase agreements and not forward funding agreements, despite the commentary. There has been commentary from the Minister’s Department about its report on institutional investment, which has warned about the potential to develop pricing power within the market. I argue that this amendment should be supported. It is calling for a report on how we deal with this over the period ahead.

I have a lot of sympathy with what the Deputy said about rebalancing this. It is important for the Minister to outline the economic context that initiated this process. Entities such as the Ireland Strategic Investment Fund, ISIF, and indigenous pension funds such as An Post that invested in some these organisations. I am of the view that so much momentum has now been gained, particularly in the apartment construction sphere and in the city and county of Dublin, I would like to hear the Minister's views on what the Government has been doing to slowly begin to wind these down. The consequences are quite profound.

I have been a public representative for 22 years and I have seen for the first time a development of 200 units in my constituency - all houses as opposed to apartments - where, unlike in the traditional model where a builder would build ten houses, sell those ten, the sale of which would finance the next ten, which they would sell to finance the next ten, the developers were able to keep the wooden hoarding around the perimeter of the site until every single house was completed. Not one house was sold until the entire development was completed. No small builder could afford to do that. There was a time when that was needed and I get that, because it represented the only building activity an in a country that was recovering from an appalling crash. However, market influences in the form of these developers have started to overwhelm the entire construction piece, especially in the residential space.

The Minister, Deputy O'Brien, has introduced measures to deal with it, but it is important for the debate here that the Minister set the context in which these measures have to be wound down and are being wound down, and the context in which they were introduced. It is too easy to say in 2021, and people will not have the memory going back ten years, that the Minister is doing this as though the measures were only introduced in the last week or two weeks. The measures were introduced at a particular time to generate and stimulate activity. Do I like them? No. Do I favour them? No. Do I want to see the end of them? Absolutely. I have seen too many in my constituency. The Deputy has not suffered the consequences of strategic housing developments, SHDs, in Donegal. He has in that some of his constituents are the parents of children who are trying to live, rent and buy in Dublin, and they will see the consequences of SHDs and the real estate investment trusts, REITs, where there is an overwhelming supply of build to rent. Again, the Minister, Deputy O’Brien, is bringing in measures to deal with that.

It is important, however, to explain the context that it was at a time when there was zero economic activity and zero construction activity. The State did look around to see who would start building here. Will we look back and be proud of everything that happened in that regard? I do not think we will, but they created jobs and activity at a time when, as a result of the crash, there was no activity and there was no money in the country to generate activity. The people who have been left out of this are the small builders, and they need to be facilitated.

One of the things that has come across, even in a county like Dublin, which has four local authorities, each of which has different situations and different contexts, is that while we have these SHDs in my own constituency, the latest for which permission has been granted being a 13-storey residential apartment complex in Citywest, we are still waiting to get anything like that kind of height and density in the city. The city can take these developments because it has the transport infrastructure. People theoretically could live close to where they work, whereas in parts of my constituency, these developments are being shoehorned in on top of settled residential areas where the amenities and the transport piece simply cannot cope.

I would like to see the end of these tax provisions. It is simply wrong now that these would continue in the context we are in where building activity has come back to and is approaching pre-crash levels. One group should not be advantaged over another. However, I believe we are travelling in that direction. That is the piece I would like to hear the Minister outline, but also a little on the context in which these arose. They did not arise, to use the Latin term, ex nihilo, out of nothing. There was a need for them. That need has passed and is passing quickly. They ought to be replaced. The Minister’s comments on this would be welcome.

I would like to use this as an opportunity to welcome the historic investment we have in the delivery of much-needed social and affordable homes in this budget. Young people, as we all know, feel locked out of the housing market. I do not want to live in a city or in a country where home ownership is something to which my generation cannot aspire.

That is why I am glad that budget 2022 will help people in that situation. It allocates significant investment to local authorities to deliver affordable homes on public land.

It provides funding for the first ever national cost-rental scheme, which means long-term, secure, affordable leases for those who wish to rent. It provides for the shared equity scheme for new build homes, which will unlock planning permissions on sites that are currently lying idle and will help people who would not otherwise be able to afford to buy. It also continues the help-to-buy scheme, which has helped 20,000 people who needed that support to purchase a house. That is something Sinn Féin opposed. Listening to the debate, one would be forgiven for thinking that Sinn Féin voted against the Government's Affordable Housing Bill. It did not; it voted for it. Sinn Féin also opposed the Land Development Agency, LDA, the body that will deliver public homes on public land. It did not even attempt to shape that legislation with amendments. Its opposition to the shared equity scheme stands in total contradiction to its overseeing of a similar shared equity scheme in Northern Ireland. Its opposition to the help-to-buy scheme is totally at odds with this-----

This is irrelevant. We are talking about a tax issue.

-----as is its opposition to Housing for All.

This is a strategic intervention.

Budget 2022 will help provide for many families up and down this country in so many ways, but in particular on housing.

I thank the Deputy. On Report Stage. it is important that we confine ourselves to the precise subject matter of the amendment being discussed.

Amendment No. 40 relates to the tax treatment of institutional investors and corporate landlords and their impact on the housing sector, affordability and rents. I did not hear all of Deputy Lahart's contribution but the thrust of it seemed to suggest that there was a time when we needed these investors and that they brought some beneficial impact to the housing sector but that maybe we need to tighten up a bit. I disagree with that narrative. I think it was a terrible mistake to invite them in, for which we are paying a terrible price. That was done in 2012 or 2013, when there were a lot of meetings - 65, I think - between the Department of Finance and these investor funds, where they no doubt became acquainted with the tax breaks that were available if they invested in the Irish property sector. They moved in at scale and bought up NAMA's portfolio, which was the biggest property portfolio in the world at the time and was in public hands. NAMA had cash sales of approximately €40 billion but the actual value of that portfolio is nearly double that now.

The State had in its hands the biggest property portfolio in the world. Even in the depths of a severe financial crisis, we could have solved the housing crisis, which predated the crash in 2012. It has always been present in my area and it has always been a disaster. It is heartbreaking having to deal with it day in, day out. We could have solved it with sites such as Cherrywood, which is being built out now by one of those investor funds, although it flipped quite a bit of it. Johnny Ronan has gotten his hands back on it, courtesy of the Dún Laoghaire-Rathdown County Council selling off some of the site. It is unbelievable stuff. I met with Hines staff who said they could not deliver the apartments there for anything less than €400,000. Someone would need in excess of €100,000, maybe €120,000, to buy one of those apartments. Average house prices in my area are now €560,000. It is just mind-boggling. A person would need an income of €150,000 or €160,000 to get a mortgage from a bank for a house of that price. These investors have contributed to all of this. The rents in my area are now in excess of €2,200 a month. Someone would need net after tax income of €26,000 just to pay the average rental price. I do not know how anybody could describe this situation as anything other than a disaster. It is resulting in the social cleansing of places like Dún Laoghaire, because working people are clearly never going to be able to afford those prices so they are just being driven out.

Hines sat on that huge portfolio for quite a long time, which I am sure was about waiting to get the prices up and flipping some of it on. Even though €15 million of funding from the local infrastructure housing activation fund, LIHAF, went into Cherrywood, we still do not know how much affordable housing we are going to get for that. When the LIHAF was originally brought in, we were told that at least 40% of any development it funded would be affordable housing. Within a few weeks, that commitment disappeared from the conditionality around LIHAF and now we are getting next to nothing. We still do not know. Years on, we have no idea how much affordable housing we are going to get and what price that housing will be.

Similarly, Shanganagh Castle, which was a public site, has now been taken over by the LDA. We have been campaigning for nearly 15 years to get public and affordable housing built directly on that site. There is still not a sod turned and we still do not know how much the affordable housing is going to cost. It will be at a discount to the market but the market is at €560,000. Even a 25% discount would be worse than useless in addressing the housing crisis in our area.

All these investment funds build very little. There is some building going on now but only where they have deals to lease the housing back to the local authority at extortionate prices. Even then, after 25 years of those lease arrangements, those entities could pull out and the tenants could then be left high and dry. We know the likelihood of that happening on an individual level because we have seen it with HAP. People are socially housed under the HAP scheme with landlords who are getting extortionate money from the taxpayer, and week in, week out, landlords pull out of these arrangements. They decide it is more beneficial not to be in such arrangements, or they decide to sell their asset that has accumulated in value, or they just opt out of a HAP deal because they think they can get higher rent elsewhere. They do it for whatever reason.

I have brought up the St. Helen's Court residents around 50 times at this point. That complex was bought out by Apollo Global Management, a big American-based investment fund, which tried to increase the rent by 60%. It then tried to mass evict the residents but could not get away with that, so it flipped it on to another vulture fund, which tried again to mass evict them. It has slowly whittled down the tenants, who just could not bear the stress and anxiety of it all, and has now succeeded in legally mass evicting them. The tenants still have nowhere to go so they are still physically there but every day they wonder when they are going to be evicted. They have now gotten letters from that vulture fund saying it is taking them to court. It is going to sue them for costs unless they get out but they have nowhere to go because they cannot afford rents of €2,200. They were paying €1,000, which is hefty enough rent and they are willing to pay a bit more but they cannot afford the rents in our area. Where are they going to go? That is what these entities have done to the housing sector. In addition, they pay very little tax on the enormous increased value of their assets, which we gave them for the most part, or on the huge rental revenues they generate for themselves.

We have visited this subject many times in the past number of years and we have analysed into infinity the problem that faces people in regard to housing. This affects first-time buyers, and all buyers, for that matter. This happened in the aftermath of a crash where property prices tumbled and properties were available for virtually nothing in comparison to what they cost beforehand. There are two concepts at play here. First, I have strongly questioned the reliance on rentals for many years. I should not say this but I know the Ceann Comhairle and I have similar views on this matter.

Owning their own homes and living in them as they see fit gives people greater security than landlords telling them that their leases are up and their rents are increasing. If we continue in the latter vein, they will never be able to buy a house. That is a fact.

Deputy Doherty has proposed a capital gains tax to hammer the people who have the money. That is not a wise route to take at the current time. We need the people who have the money to build for purchase. Banks and other lending institutions either did not have money to lend or would not lend it. They still have not and a large void remains. House building has started in full swing, though, and is increasing rapidly. Do we slow it down and, if we do, what will happen? I am not sure that it would be a good idea.

An all-party committee sat in, I believe, 2014 and debated this matter for weeks and weeks, although the issue then was different from it is now. There was a need at the time for a major investor to provide money to the State or to someone working on behalf of the State in order to build the houses that people needed. Unfortunately, people advertised on radio and television. A guy went on "Morning Ireland" to say he was for renting because it was much cheaper and he did not have to invest in bricks, mortars and so on. Wrong. That was false information and bad advice because that approach did not make a permanent positive impact on the housing market that was to people's benefit.

I am not certain it is a good idea to tax people to the extent it makes them want to go elsewhere. I do not believe it would work. It could backfire and we could find ourselves in a further recessionary situation as result of a multiplicity of factors that could happen, although I hope they do not.

We must decide how to utilise the funding that is in the hands of the people who are the subject matter of this amendment to the best advantage of the people we need to look after, namely, people on local authority housing lists and people who are paying considerable rents. I said from the beginning that I had never been in favour of the rental sector, and I am still not because it controls the lives of the people living in those houses.

I ask the Minister to consider doing something he and I have discussed previously. We need to find ways and means of encouraging the people who have the money to build houses to build them for the people we want them built for and to do so on a contractual basis. Nowadays, people talk as if local authorities would employ plumbers, plasterers, bricklayers and so on. It does not work like that anymore. There are specialists in that regard now, and they are doing the job to an extent never before known.

One should comment on the question of quality. Donegal and other parts of the country have been affected by construction quality issues due to mica and so on. During the Celtic tiger, I watched trucks bringing building products into various sites every morning and, in my innocence, thought we would have really good-quality housing. What a load of nonsense. I could not believe what had happened. With all the advantages the system had to help people build good-quality products, for example, precasting and concrete floors to tie buildings together, nothing happened. In fact, the paint had not dried on the walls when the flaws began to show up. That was not a good idea.

I encourage the Minister to examine ways of utilising the funds in question to build the houses we want built for our citizens. If funding is not available from the banks, my next question needs to be answered. Is it more efficient to tax the major investors to the extent that they might leave or to employ them directly in funding the construction sector to build the number of houses that are needed?

There is a market for one- and two-bedroom houses and apartments, but it is only a temporary market in the life of the householder. People still like the security of a house. In their innocence, they even like having a small garden where they can play with a dog or whatever the case may be.

I will pick up on a point made by Deputy Lahart. We have investors who have proposed developments in the middle of existing housing estates. The new developments are virtually being superimposed on top of the existing houses as if from a helicopter above. That is bad planning and should not be allowed. It is treating the current residents as if they were second class citizens who have to move over because the "real" men and women have arrived and space needs to be made for them, and to hell with the current residents and their one- or two-storey houses.

We need to learn from the mistakes of the past and put into operation the ways and means of achieving what we need to achieve for the people who need delivery.

To deliver for the housing needs our country has now as well as for the housing needs that will grow into the future, we require the savings of other parts of the world to be invested in building homes in Ireland. That is because, given the size of our economy, the banks we have left, the youth of our population and the homes we will need, we will need savings from elsewhere in order to fund the construction of those homes. Those savings have a choice about where to go. They are not savings we should have any expectation will be used to build homes on our island, but they can have a role in ensuring more homes are available to rent and buy.

Why do I say this? Consider the projection of housing supply upon which Housing for All is based. For example, Housing for All states that, of the 34,600 homes that we will need to be built in our country by 2025, 18,200 for private rental use or private purchase will need to be delivered by the private sector. If we want to see that kind of growth in the amount of private capital that is invested in our country to yield homes that can be purchased or rented, we need to consider how savings from elsewhere can be funnelled into Ireland. This is what is at the heart of the debate on REITs and IREFs.

I understand how contentious this topic is and the strong views that Deputies have about it, but the debate on these funds and the role they play in Ireland has to be viewed in the context of the role the State is playing in the delivery of homes and the work that is being done through our local authorities and approved housing bodies in supplying homes for social use, public use and, critically, rental use. Look at the scale of what is now under way. By the second quarter of this year, 2,433 homes had been built by the Government through local authorities. Those homes have been built by a Government that knows the State has to play a role in directly building homes for those who need them. On top of that, approximately 1,200 homes were delivered through leasing arrangements and approved housing bodies to bring the total number of homes that became available for social use in the first six months of this year to 3,636.

This is relevant to our debate. I am not contending, nor is the Government saying, that there is a role for REITs and IREFs in meeting all of our country's housing needs. Rather, we are simply saying there is a role for savings in other parts of the world in delivering more homes in our country, be they pension funds in Europe or savings elsewhere, just as our savings and pensions are used and invested elsewhere by those who manage them.

Another contention is then made about how these REITs in particular are taxed. Various views and facts are put forward regarding where tax is paid on incomes. Tax is paid on a REIT when the income is distributed to the person who is investing in it. An Irish resident investor will pay the tax at 25%, and an institutional investor is liable for tax at 12.5%. That is where the tax is paid here in Ireland. At its point of distribution, it is also subject to a dividend withholding tax of 25%. If it then goes to an Irish investor, tax is paid at either 25% or 12.5%. Non-resident investors will pay tax in a way their jurisdiction deems they should pay tax on income that is distributed from an investment fund like a REIT. What is sometimes correctly said, is that a way of reducing the tax is through the various tax treaties we have with jurisdictions all over the world. That is the case. However, when those treaties are taken into account, the average rate of tax paid on income that is distributed from REITs to investors in other jurisdictions is around 15%. That is complex. It is not as simple a contention as saying a REIT does not pay tax and thereby creating the impression that no tax is associated with how income is distributed from a REIT to people who invest in it, but tax is paid. That is where the tax is paid.

It is the case, through treaties that we have with other jurisdictions, that the tax can be reduced, but that is not the same as saying no tax is paid when an investment is returned to somebody who is investing in it from abroad. There is a role and reason for these kinds of funds. This goes back to the point I made about how we are going to meet the housing need in a country of our size and scale, with the scale of the banking sector we have, with banks leaving, and the growing housing need. We are going to meet it primarily through the State building more homes directly for those who need them the most. Second, we are trying to grow and continuing to support a construction sector that is able to build homes affordably for those who want to purchase them. There is a role for savings and investments from other parts of the world in ensuring the housing need is met. Given the lengthy debate on these issues that took place on Committee Stage, I know these issues are well aired, but I will go back to what I said many times earlier in the discussion of the Finance Bill, I do not believe a report is the appropriate way to yield further information on this topic.

Deputy Durkan's comment was that I am putting forward the idea of capital gains tax and hammering those who have the money. I am not putting forward the idea of capital gains tax. Capital gains tax applies to everybody else, it just does not apply to IREFs or REITs. What I am saying is that everybody else has to pay capital gains tax, but there is an exemption for these two funds. Deputy Durkan knows that. That is not right.

Deputy Doherty has a particular viewpoint

That is not right. I will give an example. If a handful of us set up a company and we purchased a number of rental properties and we have a rental income of €10 million per annum, then the company will have to pay corporation tax on the income. If we dispose of some of those properties, we will have to pay capital gains tax at the upper limit. If the company then wants to give us dividends from the profit it is making, we will pay a dividend withholding tax of 25% and because we are resident in Ireland we will pay tax at the marginal rate. That is the tax structure in terms of an Irish company. If we do the same thing through an IREF, we pay no corporation tax on the rental income, no capital gains tax when we sell any of the assets and we do not have to make disbursements to the shareholders. REITs do, up to 85%, but IREFs do not. An IREF would continue to recycle the money, building up the asset base until eventually we would sell it off. That is what can happen here. There is no capital gains tax when we sell the whole lot off. These structures are wrong.

I appreciate everybody's views. Deputy Higgins thinks the Minister is doing a splendid job and Fine Gael in government for the past ten years has done great on housing. It is fantastic. The fact that most of the Minister's constituents are priced out of the market probably does not bother him. The fact is younger people cannot even think of owning a home. The fact that people in his constituency are charged close to €2,000 obviously does not bother him because all he wants to do is attack Sinn Féin. We think a completely different policy needs to be followed. Whatever the rights and wrongs of it – I think it was wrong – the experiment of allowing the institutional investors to go tax free has failed. That means they have an advantage that not only can push up prices for people in this city but can also set a new floor for the rest of the State.

Where would we get the money if we did not have these investors to build the houses we need? Credit unions have said repeatedly they have the money, which are savings as well, but in a not-for-profit institution, where they have the interests of our communities and the social objective of housing people at heart. That is one source of money.

I refer to what we discussed earlier about household wealth in this country. Of the €936 billion net household wealth, more than €400 billion of it is financial assets, the savings of people here. Where is that money? It is in the banks, the banks we bailed out. There are lots of savings here. One of the things credit unions informed me, which I did not even know, is that they want to make decisions about what they put their money into, but they often have to put it into commercial banks, who may invest it in all sorts of things they have no interest in. They would like to be able to invest it in building social housing for the people in their communities at affordable levels. There is money to build houses.

If we bring these people in, their concern is how much money they can make, and they will only build if they can make a lot of money for themselves. That means charging high rents and high prices for property and trying to minimise the tax they pay, which the Government facilitates. It has not worked and there are alternatives. I reject the Minister's suggestion there are not alternatives.

I never said that.

There is an implication that we could not do it without them. When this country was effectively a Third World country, we were able to build public housing. It can and should be done.

We are building public housing. The most dangerous concept in politics is that there is no alternative. I would never suggest that. We are building public housing and social housing. That is happening at scale. I was with the Taoiseach earlier today in St. Mary's Mansions on Sean McDermott Street. I saw a wonderful project delivered by Dublin City Council and Clúid. Let us look at what is happening in Dominic Street at the moment. Let us look at the brilliant, wonderful accommodation in Sean Foster Place in my constituency. They are apartments being built by the city council. What we are doing is funded by an economy that is recovering. I assure Deputy Boyd Barrett that those homes are being built.

I accept Deputy Doherty's description of IREFs, but the next part of it is that when the income is distributed from the IREF, it is taxed at that point. That is where the taxation occurs. In making the case for the role of IREFs, the Deputy must acknowledge where the tax is paid. If one is an Irish-resident investor, it is at 41%.

That is the extra tax that is charged on IREFs. A non-resident investor is then subject to a 20% withholding tax payment when the income is distributed. That is what has happened.

I am so struck with the Deputy who has used the comment about me attacking Sinn Féin on a number of occasions here in the debate. The Deputy should not think that he is going to come here and put forward a case for change and not have his arguments tested. He tests me on my record as he is entitled to do, but I ask the Deputy please not to think that I am going to allow the case for change to be made and not scrutinise that case and not challenge him on it with the vigour with which he tests me. That is what both of us are here to do.

While I am very fond of my two colleagues who are very likeable guys, although I do not like them to the extent that I want to go over and hug them or anything like that, I want to point out that they are misguided, and that is the unfortunate thing. They mean well and want to do the right thing, as we all do, but they are misguided in looking at the issue from one aspect and one point of view only, which is to achieve taxation in the case of People Before Profit. The ultimate answer to that party is that people will have to work for nothing in the future, and if we are going to employ people, we will have to say that all who want to work for nothing should join us and we will give them plenty of work. That is the way it would work, but it does not work. It is unrealistic. I fully appreciate the points are being made in an earnest effort to help out, but if you are still misguided, you are still misguided. I mean no disrespect at all to the Deputies, of whom I am very fond of. I agree with many things they say from time to time, but I do not agree with them now.

There is much to be gained and we need to do this now. We need to utilise the people who have the money and who can borrow it on the markets for almost nothing, which we should not forget, and encourage them to point that money in our direction, not to make a killing on it, but to provide the funds we require to do the building that we need, which is even greater than has been assessed at the present time.

I remember mentioning at that all-party housing committee a few years ago that a person would need more than €100,000 a year to buy a house. I said that all those years ago because of the way things were looking, because that is what had happened before. We did not get ahead of it at that time.

I am afraid the Deputy’s time is up.

I know; it was up a long time ago, a Leas-Cheann Comhairle. We have to have a bit of levity in this House from time to time as well and I apologise for overstepping my time.

Deputy Higgins can pick up the levity.

I just want to say to Deputy Doherty that I sit on the Oireachtas Committee on Housing, Local Government, and Heritage. Day-in and day-out and week-in and week-out I am working cross-party with some of his colleagues to try to ensure the housing crisis is resolved, and I very much do not like him coming in here telling me that I do not care as I do not think that is a fair thing to say.

It is going to cost €10 billion a year to deliver 35,000 homes, which is a minimum figure. We need different funding streams to meet that level of required investment. Yes, we could look at credit unions as part of it and the Minister was with me when I visited Palmerstown credit union in my constituency recently-----

-----where they put forward some ideas as to how savings and cash flow could be utilised to help invest in things like approved housing bodies. It is unrealistic to say their savings, even if the Central Bank rules allowed it, would resolve this issue. It is a complex and multifaceted issue and problem and that is why we need a variety of funding streams to deliver a variety of homes, be those apartments, houses, rental or owner-occupier. There is no one solution, which is why Housing for All is so multifaceted and why we need all of this level of investment to go into delivering those different funding streams that are required.

To respond to the Minister, policy should be scrutinised and I have no problem in him scrutinising my policies. I welcome the fact when we get down to the detail of it and have to put details on the record. Deputy Durkan thinks we are misguided and all of the rest of it, and I like him too, on a personal level. There is no harm in this but his party members are supporting a party that has repeatedly brought forward a policy again that has priced out people in their constituencies. That is the reality of it. When you keep on doing the same thing over and over, you need to think this is wrong and is not working.

I will give examples here. The Minister talked about funds being taxed when the dividend is paid. He is correct in that. After an IREF, has accumulated all of that tax-free rental income, has sold off the assets, having been exempt from capital gains tax, CGT, which no other company is, and these funds cash out, and it is only international investments that are in IREFs, they pay about 15% because of the double taxation treaty. The point I am making is that any Irish company would have to pay real-time tax on the rental profits, CGT on any disposals, and the tax on any dividends that were paid out either that year or when they cash out. The reason this is really important is, because of the tax structure of these funds, they are pushing up property prices.

Baggot Street, for example, is not housing; it is commercial property. That is €85 million tax-free. That could be well spent in my constituency or in any one of the other Members’ constituencies. This is wrong for taxation.

The former Minister, Michael Noonan, made an argument that he wanted to see house prices rise. He made no bones about it and he argued in 2014 for house prices to rise in 2014. That was about bringing these funds in and pushing house prices up. It is a failed strategy and our people are suffering as a consequence of it. That is why this policy needs to end and why the same taxation that is applied to every other company, landlord and individual who has rental income or who disposes of an asset should apply to these multibillion euro investment firms which do not fund the construction of any house or apartment. They purchase them after they have been built, away from the hands of people who want to have their own homes. Instead, we have this situation, as Deputy Lahart has said, of private rental instead of home ownership.

Amendment put:
The Dáil divided: Tá, 47; Níl, 64; Staon, 0.

  • Andrews, Chris.
  • Bacik, Ivana.
  • Berry, Cathal.
  • Boyd Barrett, Richard.
  • Brady, John.
  • Browne, Martin.
  • Buckley, Pat.
  • Cairns, Holly.
  • Canney, Seán.
  • Carthy, Matt.
  • Clarke, Sorca.
  • Cronin, Réada.
  • Crowe, Seán.
  • Cullinane, David.
  • Daly, Pa.
  • Doherty, Pearse.
  • Donnelly, Paul.
  • Ellis, Dessie.
  • Farrell, Mairéad.
  • Funchion, Kathleen.
  • Gannon, Gary.
  • Gould, Thomas.
  • Guirke, Johnny.
  • Kenny, Martin.
  • Kerrane, Claire.
  • Mac Lochlainn, Pádraig.
  • McNamara, Michael.
  • Munster, Imelda.
  • Murphy, Catherine.
  • Murphy, Paul.
  • Mythen, Johnny.
  • Nash, Ged.
  • O'Callaghan, Cian.
  • O'Rourke, Darren.
  • Ó Broin, Eoin.
  • Ó Murchú, Ruairí.
  • Ó Snodaigh, Aengus.
  • Pringle, Thomas.
  • Quinlivan, Maurice.
  • Ryan, Patricia.
  • Shanahan, Matt.
  • Shortall, Róisín.
  • Smith, Duncan.
  • Stanley, Brian.
  • Tóibín, Peadar.
  • Tully, Pauline.
  • Ward, Mark.

Níl

  • Browne, James.
  • Burke, Colm.
  • Butler, Mary.
  • Calleary, Dara.
  • Cannon, Ciarán.
  • Carey, Joe.
  • Carroll MacNeill, Jennifer.
  • Chambers, Jack.
  • Collins, Niall.
  • Costello, Patrick.
  • Cowen, Barry.
  • Creed, Michael.
  • Crowe, Cathal.
  • Devlin, Cormac.
  • Dillon, Alan.
  • Donnelly, Stephen.
  • Donohoe, Paschal.
  • Duffy, Francis Noel.
  • Durkan, Bernard J.
  • English, Damien.
  • Farrell, Alan.
  • Flaherty, Joe.
  • Flanagan, Charles.
  • Fleming, Sean.
  • Foley, Norma.
  • Griffin, Brendan.
  • Harris, Simon.
  • Haughey, Seán.
  • Heydon, Martin.
  • Higgins, Emer.
  • Hourigan, Neasa.
  • Humphreys, Heather.
  • Kehoe, Paul.
  • Lahart, John.
  • Lawless, James.
  • Leddin, Brian.
  • Madigan, Josepha.
  • Martin, Catherine.
  • Matthews, Steven.
  • McAuliffe, Paul.
  • McGrath, Michael.
  • McHugh, Joe.
  • Moynihan, Aindrias.
  • Moynihan, Michael.
  • Murnane O'Connor, Jennifer.
  • Noonan, Malcolm.
  • O'Brien, Darragh.
  • O'Brien, Joe.
  • O'Connor, James.
  • O'Dea, Willie.
  • O'Donnell, Kieran.
  • O'Donovan, Patrick.
  • O'Dowd, Fergus.
  • O'Gorman, Roderic.
  • O'Sullivan, Christopher.
  • O'Sullivan, Pádraig.
  • Ó Cathasaigh, Marc.
  • Phelan, John Paul.
  • Rabbitte, Anne.
  • Ring, Michael.
  • Smith, Brendan.
  • Smyth, Niamh.
  • Stanton, David.
  • Varadkar, Leo.

Staon

Tellers: Tá, Deputies Pádraig Mac Lochlainn and Aengus Ó Snodaigh; Níl, Deputies Jack Chambers and Brendan Griffin.
Amendment declared lost.

Amendments Nos. 19 and 20 are related and may be discussed together.

I move amendment No. 19:

In page 96, between lines 3 and 4, to insert the following:

“Report on the introduction of a higher rate of capital gains tax on high-income individuals

40. The Minister shall, within six months of the passing of this Act, prepare and lay before Dáil Éireann a report on the introduction of a 40 per cent rate of capital gains tax on the disposal of assets made by high-income individuals, including income generated by gains.

As we are running out of time, I will not speak on amendments Nos. 19 and 20 but will move them and push them to a vote.

Amendment put and declared lost.

I move amendment No. 20:

In page 96, between lines 3 and 4, to insert the following:

“Report on the treatment of capital gains tax with respect to worker-owned cooperatives

40.The Minister shall, within six months of the passing of this Act, prepare and lay before Dáil Éireann a report on the treatment of capital gains tax in instances where a company or shares of a company are purchased by a worker-owned cooperative, and options to amend the capital gains tax regime to promote worker-owned cooperatives and employee ownership.”.

Amendment put and declared lost.

I move amendment No. 21:

In page 97, between lines 2 and 3, to insert the following:

“Amendment of Schedule 2 to Finance Act 1999 (mineral oil tax)

42.The Finance Act 1999 is amended with effect as on and from 1 April 2022 by the substitution of the following Schedule for Schedule 2:

“SCHEDULE 2

RATES OF MINERAL OIL TAX

With effect as on and from:

Light Oil:

Rates per 1,000 litres

Heavy Oil:

Rates per 1,000 litres

Liquefied Petroleum Gas:

Rates per 1,000 litres

Vehicle gas:

Rate per megawatt hour at gross calorific value

Petrol

Aviation gasoline

Used as a propellant

Used for air navigation

Used for private pleasure navigation

Kerosene used other than as a propellant

Fuel oil

Other heavy oil

Used as a propellant

Other liquefied petroleum gas

1 April 2022

€628.58

€628.58

€527.33

€527.33

€527.33

€84.84

€118.01

€138.17

€118.27

€54.68

€9.36

1 May 2022

€628.58

€628.58

€527.33

€527.33

€527.33

€103.83

€141.12

€158.50

€130.52

€66.93

€9.36

12 October

2022

€654.07

€654.07

€555.53

€555.53

€555.53

€103.83

€141.12

€158.50

€130.52

€66.93

€9.36

1 May 2023

€654.07

€654.07

€555.53

€555.53

€555.53

€122.83

€164.23

€178.83

€142.76

€79.17

€9.36

11 October

2023

€671.43

€671.43

€575.61

€575.61

€575.61

€122.83

€164.23

€178.83

€142.76

€79.17

€9.36

1 May 2024

€671.43

€671.43

€575.61

€575.61

€575.61

€141.82

€187.34

€199.17

€155.01

€91.42

€10.13

9 October 2024

€688.78

€688.78

€595.68

€595.68

€595.68

€141.82

€187.34

€199.17

€155.01

€91.42

€10.13

1 May 2025

€688.78

€688.78

€595.68

€595.68

€595.68

€160.81

€210.45

€219.50

€167.25

€103.66

€11.48

8 October 2025

€706.14

€706.14

€615.76

€615.76

€615.76

€160.81

€210.45

€219.50

€167.25

€103.66

€11.48

1 May 2026

€706.14

€706.14

€615.76

€615.76

€615.76

€179.81

€233.57

€239.83

€179.49

€115.90

€12.84

14 October

2026

€723.49

€723.49

€635.83

€635.83

€635.83

€179.81

€233.57

€239.83

€179.49

€115.90

€12.84

1 May 2027

€723.49

€723.49

€635.83

€635.83

€635.83

€198.80

€256.68

€260.16

€191.74

€128.15

€14.20

13 October

2027

€740.85

€740.85

€655.90

€655.90

€655.90

€198.80

€256.68

€260.16

€191.74

€128.15

€14.20

1 May 2028

€740.85

€740.85

€655.90

€655.90

€655.90

€217.80

€279.79

€280.49

€203.98

€140.39

€15.56

11 October

2028

€758.21

€758.21

€675.98

€675.98

€675.98

€217.80

€279.79

€280.49

€203.98

€140.39

€15.56

1 May 2029

€758.21

€758.21

€675.98

€675.98

€675.98

€236.79

€302.90

€300.83

€216.23

€152.64

€16.91

10 October

2029

€773.25

€773.25

€693.38

€693.38

€693.38

€236.79

€302.90

€300.83

€216.23

€152.64

€16.91

1 May 2030

€773.25

€773.25

€693.38

€693.38

€693.38

€253.25

€322.93

€318.45

€226.84

€163.25

€18.09

".".

This amendment provides for a reduction, on a temporary basis, of mineral oil tax to partially offset the expected increase in fuel costs as a result of the proposed increase in the biofuel obligation for transport fuels by the Minister for Transport. The reduction of 1 cent will be matched by a reduction in the National Oil Reserve Agency, NORA, levy and together will offset the estimated impact of the biofuel increase on the retail price of auto fuels. The reduction will take place from 1 April and will run until budget day.

What is interesting about this Report Stage amendment, unknown to myself, is that the Government's increase on biofuel from 11% to 13% will mean that there will be an increase in the price of petrol and diesel at the pumps. That is expected to take place from 1 January 2022. Many families out there are seeing the price of petrol and diesel increasing. Regardless of the amounts involved, part of the increase is the result of the decision to increase the carbon tax in the budget. Petrol and diesel prices have been going through the roof over the last number of months. We are now informed that the biofuel obligation measure being brought forward by the Minister for Transport will increase the price by a further 2 cent from 1 January. Has this been decided and published? In what way will this move by the Minister for Transport take place?

I acknowledge that the effect of this amendment will be to offset the increases incurred by those individuals who are purchasing petrol and diesel but this will not take effect until 1 April. What happens in January, February and March, when the Minister for Transport increases the price of diesel and petrol by 2 cent? The Minister for Finance is not going to offset that until April and in the meantime, people will be paying even higher prices at the pumps.

I have a number of questions and concerns in relation to the provisions of this amendment, particularly as it relates to the price of fuel at the pump. Commuters and those involved in transport are seeing the price of petrol and diesel increasing at the forecourt every day. They are looking to the Government for some relief but they do not see it. Here we have a proposal to offset but as Deputy Doherty said, Sinn Féin had proposals in relation to carbon tax which the Government ignored. While carbon tax is not a huge element of the price increase, it is part of the increase that families are having to live with.

The argument made by the Government about the carbon tax is that it is ring-fenced for mitigation but the NORA levy is also ring-fenced for climate projects. In that context, what are the implications of this move for the ring-fenced element of the NORA levy which is supposed to be, on foot of the Climate Action and Low Carbon Development (Amendment) Bill, a concession, and one of very few, on behalf of the Minister to the Opposition? What are the implications for those projects that are waiting for funding, including biodiversity and climate projects? Will they be impacted negatively by this measure and the reduction in the NORA levy?

The reason I am bringing forward this measure is to contribute to offsetting the impact on the price at the pump that could be caused by the implementation of this biofuel obligation. It is being implemented from 1 April because I am informed by the Minister for Transport that it will take a number of months for the change in the biofuel obligation to pass through into the price at the pump. Deputy Doherty asked at what point the decision was made. It was made last week at Cabinet.

I understand a public statement was made on this towards the end of last week by the Minister for Transport when he confirmed that this move was being made. It is happening to make further efforts to deliver our commitments under the climate action plan. According to the advice I have received from the Minister for Transport, it is a really important part of how we can reduce the environmental harm that can be caused by the use of fuel which we want to minimise. That is why this change is being made.

I am not in a position to confirm its impact on projects that come from the National Oil Reserve Agency fund, which I understand is being used for environmental projects. It is a decision for the Minister for Transport, if it has any effect at all. If the Deputy is concerned with that, I know that Sinn Féin policy is not to go ahead with the carbon tax increase. We are using those carbon tax increases to also fund projects that we believe are important for our environment and ecology. That is where this measure stands.

The Minister spoke about a press release going out at the end of last week after the Cabinet decision to bring forward this measure which in the Minister's view will increase the cost of diesel and petrol by another 2 cent from around 1 January onwards. Most people will not know this and will be asking what the hell is going on here. They are crippled with the cost of petrol and diesel. There is a view, definitely in the Green Party and maybe elsewhere, that we need to continually increase and increase the price of petrol and diesel and part of the pain is warranted. However, you cannot have those types of sudden spikes and then the Government adding another 2% on it. The Government is offsetting it and I recognise that but there is no guarantee that suppliers are not going to apply this charge to the pumps on 1 January or 1 February. The offset does not come in until 1 April. Why is the Minister not simply bringing it in on 1 January? This new 2% is only an estimate. Can the Minister give clarity as to whether it might be higher? Where are the estimates that it will increase the price of petrol by 2 cent per litre coming from? That is another euro on the fill of a car. If the increase is taking place on 1 January why do we not bring forward the offsetting measure until then? It is only lasting until October despite the other Minister saying it will last forever. One hand does not know what the other hand is doing. What guarantees does the pricing increases in the pumps will not be reflected and will not be a burden on homeowners and motorists until 1 April? Where does the estimate arrive from? Could it be more than the 2 cent suggested?

One hand knows exactly what the other hand is doing which is why we are bringing forward this measure. If the change in biofuel was happening and it was not accompanied by the offset that I am putting in place, Sinn Féin would be critical of that. We are putting in place the offset and the Deputy is still critical of it. This is a measure that has the potential to and will affect the price of fuel. I am doing it to try to protect hard-pressed car owners from the effect this change would have on the price at the pump and the Deputy is still critical of me doing it.

Three months later.

If there was ever an example of how, regardless of what you do, Sinn Féin will just have the same response, it is Deputy Doherty's response here. The reason we are doing it from 1 April is that according to the Department of Transport, the reserves that are now in place will need time to pass through the fuel system. The change in the biofuel obligation, while it will happen from 1 January, will not be felt until later in the year. That is why I am doing it. If I was doing it on 1 January, the Deputy would probably come into the House to say that I am putting a discount in place: who is going to benefit? It is probably the petrol or oil companies or the garages. He would probably make a charge like that. This is me working with the Minister for Transport to respond to an issue that we accept is there. If we were not putting it in place, the Deputy would be critical of us. We are and he still is.

Amendment agreed to.
Amendments No. 22 to 25, inclusive, not moved.

Amendments Nos. 26, 34 and 41 are related and will be discussed together.

I move amendment no. 26:

In page 122, after line 35, to insert the following:

“Report on the VAT treatment of domestic energy bills

56. The Minister shall, within one month of the passing of this Act, prepare and lay before Dáil Éireann a report on the VAT treatment of domestic energy bills and options regarding the effective removal of VAT on domestic energy bills either through reduction or rebate, in the context of rising energy prices and their impact on low and middle-income households.”.

There is no doubt that winter is here. Low and middle income households face an energy crisis in the coming months. There have been over 35 price hikes around energy supply since the start of the year. In the 12 months to October, energy prices rose by 25%. The price of electricity rose by 16% and gas by 23%. The cost of home heating oil, the main fuel source for heating 37% of homes, rose by a staggering 71%. These prices are expected to rise further. These households need a helping hand and they definitely need it now.

Across Europe, we see Governments are responding. We see that they are helping households through a range of measures but the Government here has done nothing beyond a very modest increase in fuel allowance that is out of reach for the majority of workers and families. In Spain, although electricity bills are cheaper than here - indeed, they are cheaper than Ireland in every country in Europe - VAT was slashed by 11% until the end of the year. Okay, Spain had a higher VAT rate but the bill for the householder was cheaper than here. Nevertheless, the Spanish Government reduced a cheaper bill than those here. In the Czech Republic VAT on gas and electricity has been reduced to zero until the end of this year, despite the fact that when that legislation was introduced, it was not in compliance with the EU VAT directive, and it went into negotiations with the European Commission. In Italy, President Mario Draghi launched a package of €3.4 billion to protect households from the energy crisis in October, November and December. That included slashing VAT on gas by 17%, reducing gas charges at a cost of €480 million, cancelling electricity charges at a cost of €800 million and providing a discount on the price of electricity and gas for low-income households at a cost of €450 million. In the absence of this intervention Mario Draghi warned that "in the absence of government intervention, in the next quarter the price of electricity could increase by around 40%, and that of gas by 30%". He took action to stop that. The Italian Government has allocated €1.9 billion, 0.1% of GDP, to continue these measures into 2022. If a similar package of a similar scale was rolled out here for comparison, it would amount to €800 million in 2021 and €460 million in 2022. However, in contrast with these Governments, this Government has done nothing. We in Sinn Féin are calling on the Government to wake up to where families are at, that they are feeling the pinch and the cold and that the Government here needs to act just as Governments are acting across Europe, especially in the context that we have the highest energy prices. The Minister will say that we have a lower rate of VAT but that does not matter to the householder. We have higher energy costs than other countries in Europe. Householders in other countries in Europe have cheaper bills and those Governments are acting. They are protecting consumers and householders but the Minister is refusing.

My party has repeatedly called on the Government to stretch every sinew to provide real and immediate relief for low and middle income households which struggle with lighting and heating their homes this winter. On 13 October the Commission published its toolbox for action and support to tackle rising energy prices. That includes member states, under the energy tax directive, temporarily exempting or applying a reduced rate on electricity, gas and home heating fuels for vulnerable households. We have said that the Government should work with the Commission to zero-rate VAT on household energy bills for a time limited period during the winter months.

This should be done through either an immediate VAT exemption or a VAT rebate, using the agility and innovation displayed by Revenue during the pandemic. The cost of zero-rating VAT for domestic gas, electricity and home heating oil for a three-month period would be €119 million. It would reduce household bills by 12% and thus give immediate relief to people. This could be funded by higher than expected VAT receipts. We see they are higher than expected by in the region of €1 billion in the first 11 months of this year. Instead, the Minister has ruled out this prospect. He has talked about how it cannot happen and how it would be cumbersome to have a VAT rebate. We recognise zero-rating is complex and that is why the Government would have to do what the Czech Government has done but it is not even willing to do that. There are other ways to do it. The VAT rebate is one such example allowed for in terms of the toolbox. However, the Minister has provided no evidence he has engaged with the Commission or looked at alternatives, so we have some. The Government should expand eligibility for the fuel allowance and include households currently locked out due to the rigid qualifying criteria. The Government should extend the fuel allowance season. The Government, if it rules out providing relief to households through removing VAT for the winter months, could introduce a rebate or discount scheme requiring licensed providers of gas, electricity and home heating oil to apply significant discounts to household bills with the value of those discounts being reimbursed by the State.

To date, the Government has not responded to any of the challenges households are facing right now and in the coming weeks so we are asking the Minister to wake up. We are asking him to respond. We are asking him to look at what his colleagues are doing despite households in those countries having cheaper energy bills than households in this State. I am asking the Minister to commit to considering the proposals I have put forward to him and reporting back to the Dáil as soon as possible. We need a financial package of scale to support low- and middle-income households in the face of rising energy costs and we need it now. There are solutions that are implemented in different parts of Europe. One example is that discount scheme whereby the State reimburses the providers for giving homeowners a reduction. That is happening in other areas. We can do it. The Minister put forward that it was a flawed process and a flawed idea. He took our idea and then butchered it in terms of supporting the domestic tourism sector by allowing people to get a rebate on their bills if they went out for a meal. I tell the Minister it is the possible to do this. He is shaking his head and that is fine but there are people sitting at home who are cold because the price of home heating oil has gone up by 71% and they just cannot afford to heat their home the way they used to. That is the reality. The Minister does not have the luxury of just sitting there and shaking his head. He is the Minister of Finance for everybody. He needs to respond to these people and he is refusing to do so.

There are some positive signs. We have been at this now for weeks with the Government. There are some positive signs. An article in the Business Post says the Government is looking at this and that it is considering bringing forward a package. There are some leaks coming from parliamentary party meetings and all that. Is there going to be any response or is Government going to do what Government does, take its time, have a couple of chats about this and then it will be summer and everything will be sorted? The Government will the weather sorted the problem out for people. However, people need answers now. They need solutions and they need the Minister for Finance to wake up to what they are going through right now, right here and respond.

I put in an amendment on the particular point I am going to address but unfortunately I, like many others, was restricting my movements during Committee Stage of this Bill and was not able to attend from outside the precincts. Therefore we were not able to put this amendment on today's paper but it relates to the amendment being discussed at the moment as it concerns VAT on fuel. This is a real point. I genuinely want to bring it to the Minister's attention for consideration because it is an important issue. It is a beneficial issue for society and it is really critical for a section of society that is very important.

Right now across Ireland we have small bus companies. These are the bus companies that pick kids up from school and drop them back. This includes children with disabilities who are being picked up and brought to special schools. These are bus companies that are bringing patients to and from hospitals, and so on. As the Minister knows, the nature of their business is they tender for these contracts. They tender on the understanding of a certain price of fuel and they are locked into those prices for the duration of those contracts. Most of those companies have had the fuel component of their enterprise radically increase over the last while. Bus companies are in a strange position in that they are VAT-exempt, so to speak. They do not pass VAT on. They do not charge customers VAT. Instead they pay VAT for the materials they consume in the delivery of their enterprises. Thus, they are paying VAT on fuel and paying it on every single thing they do but they are not getting VAT back and it is a big difficulty for them.

I gather there are some systems involving rebates etc. but my understanding is the amount of time and cost it takes to get an accountant to do the work on all that means it is not worth it for many businesses to chase down that rebate. I suggest these bus companies be zero-rated for tax. In other words, they would not be passing that VAT on to the consumer because obviously these bus companies are a tool in the Government's project to increase the level of public transport around the country and get people out of their cars to reduce the amount of CO2 being emitted. We do not want to pass on any extra costs to the consumer. We want them to be able to get the cheapest possible public transport available. We also need to allow these businesses to be able to get back VAT they are paying. The whole idea of VAT is that it is a value added tax but it is not operating as such in the bus sector. Instead it is operating as a block tax. Perhaps while the Minister is addressing these particular amendments he might give us his views, and hopefully his interest, in resolving this difficulty as well.

As I did not have the chance to deal with it on Committee Stage I will deal with the latter point raised by Deputy Tóibín before I deal with Deputy Doherty's amendment.

The VAT rating for goods and services is subject to EU VAT law that our law must comply with. In general, the VAT directive provides that all goods and services are liable to VAT at the standard rate, currently 23% in Ireland, unless they fall within categories of goods and services specified in the directive in respect of which member states may apply a lower rate or exemption from VAT. The rate of VAT on fuel and materials consumed by bus companies for the running of buses cannot therefore be reduced. The directive does allow Ireland to continue to apply a historic VAT exemption to the transport of passengers and their accompanying baggage. This means the transport undertaking does not register for VAT, does not charge VAT on the supply of its services and has no VAT recovery entitlement on costs where such costs are used for the exempt supply of passenger transport. Ireland may continue the VAT exemption on the supply of domestic passenger transport as governed by Article 371 of the VAT directive. However, it cannot change the conditions under which the exemption was granted. In accordance with the directive, a reduced rate of VAT could be introduced to the supply of passenger transport in place of the exemption that currently applies. This would give the transport operator deductibility in relation to VAT on its business inputs but would involve charging passengers VAT on their fares. Under the directive, it is not possible to apply the zero rate in Ireland to these services as they were not zero-rated in the past.

I am aware the UK continues to apply the zero rate of VAT to the supply of passenger transport, with the exception of a taxi service that is standard-rated. Suppliers established in the UK have an entitlement to deductibility on the costs relating to the supply of these services where the place of supply is the UK. However, this is also an historic standstill provision and cannot be availed of by Ireland.

The Deputy's amendment would therefore have been in breach of the EU VAT directive. That is the reason the particular issue he raised cannot be met. I would be happy to give him a further note on the matter if it would be of help to those who raised it with him.

I did shake my head while Deputy Doherty was speaking. The reference that caused me to do so was the one to my stay and spend initiative. When I heard him say I "butchered it", I just thought there he goes again, because it was a good idea. It did not work.

The reason it did not work, however, was that health restrictions were changed a few weeks later to not allow travel throughout the country. That was one of the reasons it did not work. I said "There you go again, Deputy" because he just cannot see the positive in anything. What about all the measures we brought in that made an impact, or the ones that worked, such as the 9% VAT rate, EWSS and the changes made to tax liabilities? We brought those measures in and they worked. I fully accept the save and spend scheme did not work in the way I hoped, but that was not because I butchered some brilliant Sinn Féin idea. It did not work because of changes in the health restrictions that came after it was introduced. I accept the execution of the scheme might have been a little complicated, but I did not butcher anything that came from Sinn Féin.

I can think of few issues on which Sinn Féin has lower credibility than the cost of living, which was raised by the Deputy. I say that because it is opposed to any changes to personal taxation. The Deputy has repeatedly said that.

For a low- or middle-income earner worried about the cost of living, Sinn Féin's policy is that it does not want to see any changes to personal taxation. That is what it is has stated repeatedly. It does not want to see any changes in how we can change our tax code to support people at a time when prices are going up and inflation is rising.

The Minister voted against rent relief last night.

Okay. I will acknowledge the point on rent relief.

Exempting more people from USC.

Where was this commitment to changing taxes in the Sinn Féin budget statement?

We put it forward every year.

Sinn Féin stated that it does not support any significant changes to personal taxation. That is its policy and that is what it has stated. At a point when prices are going up and inflation is also beginning to rise which, as the Deputy knows because he understands these things well, means that our tax code benefits as a result due to its potential non-indexation, he is against using any of those benefits to help those affected by rising inflation. He is against it. He voted against changes that we made to the standard rate of income tax to help, in particular, people who are on middle incomes and paying the higher rate of income tax. He is against that policy. At a time when the cost of living is going up, he is against any changes to personal taxation to help those on low- and middle-incomes to cope with it. That is the Sinn Féin approach. I completely disagree with the Deputy and I believe he is wrong. I do not believe in, nor have I ever implemented, tax cuts that I was concerned might be unaffordable in the future. I do believe that at a time when inflation and prices are going up, targeted and affordable changes, which I have implemented in this budget and will implement in budgets that are coming up, can make a difference. Sinn Féin is against that.

The issue of VAT on domestic energy bills has been raised by the Deputy. We discussed it on Committee Stage and I will begin my response to it. The particular issue that was raised related to the reduction of the VAT rate below 12% on a temporary basis. If we did that, the issue we would then face, and my officials advised me of this, would be that we would not be able to retain the derogation we currently hold that allows us to apply a reduced rate of VAT in other parts of our tax code. This means that the VAT rate on electricity, gas, oil and fuel would increase to 23% when the temporary relief expired. I do not want to be in that position, which is why I am not looking to implement that policy. I will address the other VAT policy matters if time allows.

It is telling that the Minister took 16 seconds to address the core issue. He is elected like the rest of us and entitled to say whatever he wants in the Chamber under the guidance of the Leas-Cheann Comhairle, but I get annoyed when he does not address the issue. His script is "Attack Sinn Féin." It is the big bad wolf theory to divert attention from the actual substance. That is why I am saying "wake up" because there is whole different reality out there where people are not interested in this tit for tat between the Minister and me. They are interested in what will happen with their energy bills, how they will heat their houses and, if they have to heat their houses, what will happen to the rest of their disposable incomes. That is what they are interested in. The Minister is bringing forward personal taxation measures that leave the vast majority of taxpayers out. They do not benefit-----

-----because they do not have a tax liability at that rate. Am I wrong?

The Deputy is wrong.

I am absolutely not wrong. The Minister will not give an accurate figure for the number of taxpayers who will not benefit from his marginal tax rate measure because it does not exist. We have loads of ideas regarding personal taxation. We have argued about those who are paying higher levels of tax. We also believe more people should be exempt from USC and that tax credits should be afforded to 300,000 families who are paying sky-high rents because of the Government's policies.

We are talking today about how we do what other countries are doing to reduce energy bills for families. That is an example. Why do we not do as other countries have done, and suggested, and provide that type of rebate to the energy companies on the basis that they cut energy prices? That is an idea. I have given the Minister loads of other ideas. He has not addressed one of them.

I have no script with me. I am saying to the Deputy that the idea that he can stand in this Chamber, put forward ideas for change and not expect them to be tested will not happen.

I am testing them and I see the Deputy's reaction. He has voted against changes that would help. He talked about disposable income. The changes I am making to the standard rate cut-off point do help with disposable income for those who are on middle incomes. We made the change to tax credits precisely so more people would benefit from the overall changes that we are making to tax policy. That is why we have done that.

On what we have done and the changes we have made, the Deputy is well aware of the measures this Government has put in place to try to support those affected by the rising costs of energy and fuel. These include changes we have made to the qualifying child payment, the living alone allowance, the fuel allowance and the working family payment, which are happening. The Deputy spoke of the reality out there of people who are watching this debate. I accept the last thing on their minds at present is the exchange between him and me on the details of our differing views. I say to those people that the reason we have made changes to carbon taxation is to use that revenue to co-fund the changes we are making to social welfare. For those who are working and on middle incomes who, in some cases, see their wages going up but also see the benefits of rising wages being offset by prices that, for many, are going up quicker, that is why we are making the changes we are to the personal tax code. That is why they are happening and they are changes Sinn Féin has voted against.

It is interesting that when the Minister was disputing the figures he did not put them on the record because the impact of his taxation measures excludes the vast majority of taxpayers in this State. That is the reality of it.

No. The Deputy is wrong.

There are ways in which we can do this. The Minister could have looked at many of the proposals we put forward that would deal with the cost of living for those people, for example, who need additional social welfare supports and renters who need additional supports. He could have reduced childcare fees by two thirds over two years, as we suggested. He could have helped middle-income families with the cost of sending their children to education by reducing their tax by €500 this year, which would help with increases in the cost of living they experienced. He could have done all of that so the Minister should not talk to or lecture me about not having the right to talk about people and the cost of living. The public will make that decision in due course.

I ask the Minister, because he is again diverting, about the cost of living crisis in respect of energy.

He does not seem to get it, so he leaks out stuff that he is reacting, because everybody is talking about it. He does not want to give us credit for anything. That is fine. I do not care, to tell the truth. The Minister butchered that scheme. It was not just us who told him so. The people in the hospitality sector told us he had made the scheme unworkable. That is the problem, but that is neither here nor there.

The issue is what we will do here and now. The Minister needs to wake up to the reality of where people are at. There has been a 71% increase in home heating oil, which is the way 37% of the population heat their homes. There have been massive increases in energy prices and in gas and electricity prices, and the Minister has nothing to offer them: nothing; nada; zilch. That is not good enough. His counterparts throughout Europe, where homeowners have lower energy costs than here, are responding. We have given the Minister umpteen solutions and he has not responded to one of them, and that is not good enough. He needs to get his act together and come forward with a package that responds to the here and now of where people are at. The Minister needs to wake up to the realities of where people are at.

Amendment put:
The Dáil divided: Tá, 46; Níl, 65; Staon, 0.

  • Andrews, Chris.
  • Bacik, Ivana.
  • Berry, Cathal.
  • Boyd Barrett, Richard.
  • Browne, Martin.
  • Buckley, Pat.
  • Cairns, Holly.
  • Canney, Seán.
  • Carthy, Matt.
  • Clarke, Sorca.
  • Cronin, Réada.
  • Crowe, Seán.
  • Cullinane, David.
  • Daly, Pa.
  • Doherty, Pearse.
  • Donnelly, Paul.
  • Ellis, Dessie.
  • Farrell, Mairéad.
  • Funchion, Kathleen.
  • Gannon, Gary.
  • Gould, Thomas.
  • Guirke, Johnny.
  • Kenny, Gino.
  • Kenny, Martin.
  • Kerrane, Claire.
  • Mac Lochlainn, Pádraig.
  • Munster, Imelda.
  • Murphy, Catherine.
  • Murphy, Paul.
  • Mythen, Johnny.
  • Nash, Ged.
  • O'Callaghan, Cian.
  • O'Rourke, Darren.
  • Ó Broin, Eoin.
  • Ó Murchú, Ruairí.
  • Ó Snodaigh, Aengus.
  • Pringle, Thomas.
  • Quinlivan, Maurice.
  • Ryan, Patricia.
  • Shanahan, Matt.
  • Shortall, Róisín.
  • Smith, Duncan.
  • Stanley, Brian.
  • Tóibín, Peadar.
  • Tully, Pauline.
  • Ward, Mark.

Níl

  • Browne, James.
  • Burke, Colm.
  • Butler, Mary.
  • Calleary, Dara.
  • Cannon, Ciarán.
  • Carey, Joe.
  • Carroll MacNeill, Jennifer.
  • Chambers, Jack.
  • Collins, Niall.
  • Costello, Patrick.
  • Cowen, Barry.
  • Creed, Michael.
  • Crowe, Cathal.
  • Devlin, Cormac.
  • Dillon, Alan.
  • Donnelly, Stephen.
  • Donohoe, Paschal.
  • Duffy, Francis Noel.
  • Durkan, Bernard J.
  • English, Damien.
  • Farrell, Alan.
  • Flaherty, Joe.
  • Flanagan, Charles.
  • Fleming, Sean.
  • Foley, Norma.
  • Griffin, Brendan.
  • Harris, Simon.
  • Haughey, Seán.
  • Heydon, Martin.
  • Higgins, Emer.
  • Hourigan, Neasa.
  • Humphreys, Heather.
  • Kehoe, Paul.
  • Lahart, John.
  • Lawless, James.
  • Leddin, Brian.
  • Madigan, Josepha.
  • Martin, Catherine.
  • Matthews, Steven.
  • McAuliffe, Paul.
  • McGrath, Michael.
  • McHugh, Joe.
  • Moynihan, Aindrias.
  • Moynihan, Michael.
  • Murnane O'Connor, Jennifer.
  • Noonan, Malcolm.
  • O'Brien, Joe.
  • O'Callaghan, Jim.
  • O'Connor, James.
  • O'Dea, Willie.
  • O'Donnell, Kieran.
  • O'Donovan, Patrick.
  • O'Dowd, Fergus.
  • O'Gorman, Roderic.
  • O'Sullivan, Christopher.
  • O'Sullivan, Pádraig.
  • Ó Cathasaigh, Marc.
  • Ó Cuív, Éamon.
  • Phelan, John Paul.
  • Rabbitte, Anne.
  • Ring, Michael.
  • Smith, Brendan.
  • Smyth, Niamh.
  • Stanton, David.
  • Varadkar, Leo.

Staon

Tellers: Tá, Deputies Pádraig Mac Lochlainn and Aengus Ó Snodaigh; Níl, Deputies Jack Chambers and Brendan Griffin.
Amendment declared lost.
Amendments Nos. 27 to 36, inclusive, not moved.

I move amendment No. 37:

37. In page 136, between lines 9 and 10, to insert the following:

“PART 6

REPORTS

Report on the introduction of levies with respect to the funding of defective block and fire safety redress schemes

66. The Minister shall, within six months of the passing of this Act, prepare and lay before Dáil Éireann a report on the introduction of levies against certain financial institutions, construction companies and insurance undertakings to part-fund redress schemes with respect to properties affected by defective blocks, fire safety and other such defects.”.

This amendment deals with the defective block redress scheme. The scheme brought forward by the Government has been rejected outright by the homeowners in Donegal and other affected counties because of the sliding scale agreed by the Cabinet. It has to go and the Minister has to move on this quickly. The Minister's party leader is sitting beside him and I hope this does not fall on deaf ears. These families have gone through huge turmoil over the last period. There is a huge personal and mental health issue here and the Cabinet can do the right thing by getting rid of the sliding scale and making sure the proper amount estimated by the Strategic Banking Corporation of Ireland, SBCI, is made available to demolish and rebuild these homes.

The amendment talks about the contribution by the financial sector. I have put questions to the Minister regarding this issue. I have spoken to a number of CEOs of the banks about the contribution I believe they should make. I understand the Minister has not had any engagement with any financial institution. That was the situation two weeks ago, despite this going on for months. Will the Minister outline to the Dáil the engagement he has had with the CEOs of each of the banks on a financial contribution? Does he intend that the financial institutions will make a contribution to the redress scheme?

It is precisely because the Government and all those who represent those affected by the mica issue understand the anxiety and trauma that so many families have faced that the Government has worked hard to bring forward a comprehensive and strong response of over €2 billion to support families facing the nightmare of a home turning into a crumbling building.

It is because the Government recognised what needed to be done to improve on a scheme, which it hoped would work but did not yield what families were looking for, that it considered what could be done and has acted. We have brought forward a scheme that we are urging those who are affected by this issue to consider and reflect upon. It is a commitment of more than €2 billion in order that we can respond in regard to homes. Those who have been affected the worst will be dealt with first, putting in place plans, building on what is already there to support the cost for those who have to move out and to ensure that for homes that need to be rebuilt, a plan is in place to support that rebuilding. That is what the Government has done.

I want to use this opportunity to ask those affected to reflect on the plan and to ask the Deputy to reflect on the plan and the detail that we have brought forward. We asked for ideas from the Opposition in regard to this issue. The Minister, Deputy Darragh O'Brien, wrote to Sinn Féin but it never responded. Sinn Féin never offered any views and it never brought forward any ideas. The Minister, Deputy Darragh O'Brien, the Minister, Deputy McConalogue, Deputy McHugh and those who are representing communities that have been affected the most by this issue, had to sit down and methodically come forward with a proposal that looked to balance the huge cost involved in this with meeting the needs of homeowners who have seen their dreams turned into nightmares. That is what the Government has done in terms of the plan it has brought forward. We acknowledge the measure that is there, which is a measure that we are bringing forward looking to contain costs where we can in going forward with a plan that will involve an investment of over €100 million per annum in those communities that need help.

What the Government has decided to do, and I believe is the right decision, is to bring forth in next year's Finance Bill a measure that ensures the construction sector makes a contribution to the cost that is involved in this measure. The Government has brought forward a comprehensive package in response to this issue. I have engaged with those who have been affected by this over a number of years. We want to act. We want to bring forward legislation and to put in place the work that needs to happen on the ground by agencies to respond to this issue and to ensure it is dealt with as quickly as possible because those who are affected by this have had a long time to wait.

While this measure is not a Finance Bill measure, Deputy Doherty, as is his right, and as he has done at other points, has brought forward the issue of how a contribution can be made. We brought forward and will implement a contribution levy in next year's Finance Bill. In regard to this year's budget, the decision the Government made last week is about how we can respond with over €2 billion to meet the needs of these homeowners in regard to an issue which we accept has gone on for too long and has caused anguish to so many. There is a plan. We urge those affected to consider it. The Government stands ready to act to legislate as soon as possible to make a difference to those who need it the most.

These families have lived with this nightmare for so long. As I said earlier to the Minister, forget about me and what you think about Sinn Féin.

These families have reflected. They have reflected on the fact that you are asking them to find €65,000 for an average house. They cannot do it. Deputy McHugh has stated that he will not stand over the legislation. It needs to change.

It needs to change.

The time permitted for this debate having expired, I am required to put the following question in accordance with an order of the Dáil of 13 November 2021: "That the amendments set down by the Minister for Finance and not disposed of are hereby made to the Bill; Fourth Stage is hereby completed; and the Bill is hereby passed." Is that agreed?

It is not agreed.

Question put:
The Dáil divided: Tá, 68; Níl, 42; Staon, 0.

  • Berry, Cathal.
  • Browne, James.
  • Burke, Colm.
  • Butler, Mary.
  • Calleary, Dara.
  • Canney, Seán.
  • Cannon, Ciarán.
  • Carey, Joe.
  • Carroll MacNeill, Jennifer.
  • Chambers, Jack.
  • Collins, Niall.
  • Costello, Patrick.
  • Cowen, Barry.
  • Creed, Michael.
  • Crowe, Cathal.
  • Devlin, Cormac.
  • Dillon, Alan.
  • Donnelly, Stephen.
  • Donohoe, Paschal.
  • Duffy, Francis Noel.
  • Durkan, Bernard J.
  • English, Damien.
  • Farrell, Alan.
  • Flaherty, Joe.
  • Flanagan, Charles.
  • Fleming, Sean.
  • Foley, Norma.
  • Griffin, Brendan.
  • Harris, Simon.
  • Haughey, Seán.
  • Heydon, Martin.
  • Higgins, Emer.
  • Hourigan, Neasa.
  • Humphreys, Heather.
  • Kehoe, Paul.
  • Lahart, John.
  • Lawless, James.
  • Leddin, Brian.
  • Madigan, Josepha.
  • Martin, Catherine.
  • Matthews, Steven.
  • McAuliffe, Paul.
  • McGrath, Michael.
  • McHugh, Joe.
  • Moynihan, Aindrias.
  • Moynihan, Michael.
  • Noonan, Malcolm.
  • O'Brien, Darragh.
  • O'Brien, Joe.
  • O'Callaghan, Jim.
  • O'Connor, James.
  • O'Dea, Willie.
  • O'Donnell, Kieran.
  • O'Donovan, Patrick.
  • O'Dowd, Fergus.
  • O'Gorman, Roderic.
  • O'Sullivan, Christopher.
  • O'Sullivan, Pádraig.
  • Ó Cathasaigh, Marc.
  • Ó Cuív, Éamon.
  • Phelan, John Paul.
  • Rabbitte, Anne.
  • Ring, Michael.
  • Shanahan, Matt.
  • Smith, Brendan.
  • Smyth, Niamh.
  • Stanton, David.
  • Varadkar, Leo.

Níl

  • Andrews, Chris.
  • Bacik, Ivana.
  • Boyd Barrett, Richard.
  • Browne, Martin.
  • Buckley, Pat.
  • Cairns, Holly.
  • Carthy, Matt.
  • Clarke, Sorca.
  • Cronin, Réada.
  • Crowe, Seán.
  • Cullinane, David.
  • Daly, Pa.
  • Doherty, Pearse.
  • Donnelly, Paul.
  • Ellis, Dessie.
  • Farrell, Mairéad.
  • Funchion, Kathleen.
  • Gannon, Gary.
  • Guirke, Johnny.
  • Kenny, Gino.
  • Kenny, Martin.
  • Kerrane, Claire.
  • Mac Lochlainn, Pádraig.
  • Munster, Imelda.
  • Murphy, Catherine.
  • Murphy, Paul.
  • Mythen, Johnny.
  • Nash, Ged.
  • O'Callaghan, Cian.
  • O'Rourke, Darren.
  • Ó Broin, Eoin.
  • Ó Murchú, Ruairí.
  • Ó Snodaigh, Aengus.
  • Pringle, Thomas.
  • Quinlivan, Maurice.
  • Ryan, Patricia.
  • Shortall, Róisín.
  • Smith, Duncan.
  • Stanley, Brian.
  • Tóibín, Peadar.
  • Tully, Pauline.
  • Ward, Mark.

Staon

Tellers: Tá, Deputies Jack Chambers and Brendan Griffin; Níl, Deputies Pádraig Mac Lochlainn and Aengus Ó Snodaigh.
Question declared carried.

This Bill, which is certified to be a money Bill in accordance with Article 22.2.1° of the Constitution, will be sent to the Seanad.

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