I move: "That the Bill be now read a Second Time".
The Bill provides a legislative basis for a number of changes to the main Covid supports that have been announced by the Government and are being implemented by the Revenue Commissioners at the moment on an administrative basis. I am using the opportunity of the Bill to include a number of other financial items that require legislative solutions. One of these is to ensure the pandemic special recognition payment of €1,000 to be paid for or on behalf of the Minister for Health will be tax free. I will return to this and other items in a moment.
It is my hope and expectation that this will be the last Bill I will bring forward with the phrase "Covid-19" in the Title. When the pandemic struck two years ago, we quickly brought in emergency legislation, namely, the Emergency Measures in the Public Interest (Covid-19) Act 2020 to provide various supports for businesses, including the temporary wage subsidy scheme, TWSS. The Government allowed a significant increase in public debt to absorb the fallout from the pandemic. The prudent management of the public finances in the years preceding the pandemic allowed this. However, as we look beyond the pandemic, even with the latest significant challenge we face with regard to the war in Ukraine, we need to again be careful with the public finances and begin to put the debt ratio on a downward path, and, therefore, the necessary supports that we put in place are coming to an end. The ending of these supports has been well flagged and I have kept my promise that there would be no cliff edge to the withdrawal of supports.
The labour force survey has shown the economy has rebounded quickly as businesses reopened. Employment increased by almost 225,000 in 2021 and the total number employed is very close to the target of 2.5 million people at work that was set out in the economic recovery plan last year. The Exchequer figures last week were also positive. They showed that tax receipts continue to record strong growth in the opening months of this year. Although the annual comparisons are flattering due to a number of factors, the underlying trends are a good signal of the continued momentum in the domestic economy.
As we hopefully leave the great challenge of Covid behind us, there are now other exceptionally serious developments to be faced, most notably the awful situation and horrendous war in Ukraine. The discussion of the Bill is not the time to speak about that or the response of the Government to the emerging situation there. However, it does show that while recent trends have been positive, we cannot be complacent. For example, we are already seeing, and responding to, the effects higher prices are having in the economy and households.
Part of the restoration of public finances will involve the removal of supports for businesses as they reopen and no longer need them. and the Bill includes a number of final adjustments to these supports. The TWSS was introduced on 26 March 2020. It was replaced by the employment wage subsidy scheme, EWSS, on 1 September 2020. The EWSS was provided for in the Financial Provisions (Covid-19) (No. 2) Act 2020. It provided an economy-wide support and has been extended and amended on a number of occasions. The Finance Act 2020 introduced the enhanced rates of subsidy with effect from 20 October 2020 to 31 January 2021. The enhanced rates were extended to 31 March 2021 by ministerial order. There was a further extension of EWSS with the enhanced rates of subsidy to 30 June 2021, by way of ministerial order. Then, as part of the Government’s economic recovery plan, the EWSS was extended to 31 December 2021 by the Finance (Covid-19 and Miscellaneous Provisions) Act 2021. Those arrangements were subsequently enhanced as part of an announcement on 9 December 2021.
Section 2 provides for further enhancements in response to the evolving public health situation. First, the scheme was reopened for certain businesses that would not otherwise be eligible as announced on 21 December 2021. Second, enhanced support would be provided to businesses that were directly impacted by the public health regulations introduced in late December 2021, with a delay in the step-down arrangements for such firms that will continue to receive support until 31 May. As Members will be aware, the EWSS has played a central role in supporting businesses, encouraging employment and helping to maintain the link between employers and employees. It has now helped 719,900 employees.
The Covid restrictions support scheme, CRSS, was introduced by the Finance Act 2020. Section 4 gives a legislative basis for the final change announced in response to the public health restrictions in December last. It provides for an increase in the turnover reduction criteria from no more than 25% of 2019 turnover to no more than 40%. It was also made available to newer businesses during the period 13 October to 26 July. In addition, certain charities and sporting bodies that carry on similar trading activities to businesses became eligible to apply for CRSS in the most recent period of restrictions, that is, from December 2021 to January 2022.
Tax debt warehousing was introduced in 2020 by the Financial Provisions (Covid-19) (No. 2) Act 2020. As announced in January last year, the Government has agreed that the period when tax liabilities arising can be warehoused will be extended to 30 April 2022 for all businesses eligible for Covid-19 support schemes. This will allow businesses that have been most impacted additional time to recover before their tax liabilities have to be paid. Their period of zero interest will, therefore, commence from 1 May 2022 until 30 April 2023, with interest at the reduced rate of 3% payable thereafter until the debt is paid down. This extension is provided for in sections 5 to 10, inclusive.
Section 11 relates to the Government decision of 21 January to waive the excise duty associated with court fees in respect of applications for special exemption orders until 30 April.
As I stated, there are a number of additional matters I am using the Bill to deal with.
The Government has agreed to give a recognition payment of €1,000 tax free to eligible front-line health and ambulance workers. An equivalent payment will be provided for relevant staff in private sector nursing homes and hospices that were affected by Covid-19. The payment recognises the dedication and commitment of these staff during this extraordinary period and ensures the payment will not be subject to income tax, universal social charge, USC, or PRSI.
With regard to stamp duty, Deputies will recall in 2021, as part of the Government’s response to the bulk-purchasing of residential properties by commercial institutional investors, a higher 10% rate of stamp duty on multiple purchases of residential properties was introduced. Section 12 makes a further amendment to address a further social and affordable housing issue in the context of the 10% stamp duty charge, namely, cost rental. In summary, it is proposed to make provision for a partial repayment scheme for properties designated as cost-rental dwellings by the Minister for Housing, Local Government and Heritage under Part 3 of the Affordable Housing Act 2021 within six months of their acquisition. What this means in practical terms is that qualifying taxpayers will get a refund of the difference between the 10% rate and the normal stamp duty rate which in most instances will be 1%. The beneficiaries of this amendment will be those involved in the delivery of cost-rental homes at scale and includes approved housing bodies, such as the Land Development Agency and local authorities.
With regard to the tax treatment of payments made under the proposed voluntary Brexit whitefish fleet decommissioning scheme, the Minister for Agriculture, Food and the Marine received the final report of the seafood task force, focused on navigating change, last October. In line with the recommendations of the report the Minister has proposed compensating fishers to voluntarily decommission fishing vessels in order to rebalance and maintain sustainability of the Irish fishing fleet in light of transfers of quota shares to the UK under the EU-UK Trade and Cooperation Agreement that has a significant negative impact on the fishing opportunities available to the Irish fleet. Section 13 will provide for the tax treatment of payments made under the scheme.
Finally, section 14 makes provision for the funding of the Central Bank central mechanism for information on safe-deposit boxes and bank and payment account and in the operation of the register of beneficial ownership of certain financial vehicles, which are required as part of the transposition of EU anti-money laundering directives.
This Bill provides a legislative basis for the changes to various support schemes for businesses that were announced in December and January last as well as a number of matters I have outlined. It underlines the responsiveness of the Government to the needs of businesses for supports while remaining cognisant of the need to prudently manage and restore the public finances.
I am also announcing a temporary reduction in the excise rates for auto fuels. The Government recognises the impact felt by so many of the current fuel price increases. While these trends are driven primarily by global factors, I have taken the decision to alleviate some of the impacts through the domestic taxation of fuel. Effective from midnight tonight, there will be a reduction of 20 cent in the excise rate for petrol and 15 cent on auto diesel, with a proportionate 2 cent reduction for the excise on marked gas oil or green diesel. These measures are VAT inclusive and will last until 1 September. I will bring a Financial Resolution before the House later this evening to give immediate effect to these changes. These reductions are in addition to the extensive cost-of-living supports already announced this year, specifically the €200 energy credit, public transport fare reductions, fuel allowance increases, an enhanced drug payment scheme and bringing forward the working family payment.
I commend the Bill to the House.