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Dáil Éireann debate -
Wednesday, 4 May 2022

Vol. 1021 No. 4

Finance (Covid-19 and Miscellaneous Provisions) Bill 2022: Report and Final Stages

I move amendment No. 1:

In page 15, between lines 21 and 22, to insert the following:

“Amendment of section 46 of Value-Added Tax Consolidation Act 2010

7. Section 46 of the Value-Added Tax Consolidation Act 2010 is amended, in subsection (1) by—

(a) the substitution in paragraph (a) of “at any of the rates specified in paragraphs (b), (c), (ca), (caa), (cb) and (d)” for “at any of the rates specified in paragraphs (b), (c), (ca) and (d)”,

(b) the substitution in paragraph (c) of “subject to paragraphs (ca), (caa) and (cb)” for “subject to paragraphs (ca) and (cb)”, and

(c) the insertion of the following paragraph after paragraph (ca)

“(caa) during the period from 1 May 2022 to 31 October 2022, 9 per cent in relation to goods of a kind specified in paragraph 17(2) and (3) of Schedule 3 on which tax would, but for this paragraph, be chargeable in accordance with paragraph (c);”.”.

The purpose of this amendment is to establish in primary legislation the legal basis for the financial resolution passed on 27 April to provide for a temporary reduction of VAT on gas and electricity. The previous VAT rate for gas and electricity was 13.5%. This had been reduced to 9% from 1 May to 31 October 2022. In terms of revenue impact, this six-month decrease in VAT is estimated to cost €46 million. As discussed on Committee Stage, the Government recognises the impact of the current energy crisis and understands how it has contributed to a rise in the cost of living. While the energy crisis is driven primarily by global factors, the Government has taken the decision to reduce VAT on gas and electricity to alleviate some of that impact, along with introducing a range of other measures.

As previously outlined, Ireland has maintained a historic derogation in respect of the VAT rate on gas and electricity since 1991. This has allowed us to apply a rate of 13.5% but also prevented us from lowering the VAT rate below 12%. However, following lengthy negotiations, amendments to the VAT directive were agreed in December 2021, with final sign off on the amendment text at the ECOFIN meeting last month. The new arrangement came into effect on 6 April last. It allows Ireland to apply a reduced rate of 9% to those products in line with other goods and services to which a reduced rate applies. The Government made a decision to avail of this flexibility from 1 May, the start of the next VAT accounting period for change.

All this ties in with the various cost of living measures that the Government has introduced in recent months. On budget day there were income tax and social welfare packages because this debate arises because of inflation and increasing costs borne by households. Some of the cost of living measures that the Government has introduced to mitigate some of the worst aspects of those costs were announced on budget day and came into effect earlier this year. One or two were brought forward more recently. The income tax and social welfare packages introduced on that day cost €1.07 billion. The energy credit of €200 inclusive of VAT, the 20% reduction in public transport fees and the €125 lump sum on the heat fuel supplement allowance cost €505 million in total. On 10 February, the drug payment scheme threshold was reduced to €80. Only a little earlier, it was well over €120. That is a substantial decrease in the threshold. An increase in the income threshold on the working family payment that was due to come in later in the year was brought forward to April. The the cap on school transport fees has been reduced. Excise duty was reduced on 9 March. That cost in the region of €320 million. On 11 March, a €100 per-week haulier support scheme payment was introduced. That cost €18 million. The VAT reductions on electrify and gas were also introduced around that time. The €100 lump sum fuel allowance payment was brought in, and on 13 April the excise duty reduction was extended and there was a reduction in the public service obligation, PSO, levy. The cost of these measures came to €118 million.

In total, these measures cost approximately €2.1 billion. That is quite a significant sum for the short period involved. No one can reasonably suggest that the Government can completely mitigate all the inflationary pressures within the economy, most of which are caused by factors outside the State.

Some have raised the Government gaining windfall revenues from rising energy prices. That is a fair question which people often ask. Excise on a unit of fuel is the same regardless of the price of fuel. The tax is based on volume. Therefore there is no extra revenue raised from fuel if the price increases. Excise duty is an important revenue stream for the Government and collected €5.8 billion last year. More than €2 billion of that came from fuel taxes. The taxes help to pay for everything from the wages of teachers, nurses and Gardaí to infrastructure like roads, schools and housing and all social protection payments.

The measures announced on 9 March reduced excise on motor fuel by approximately one third, which was extremely significant. The Government has now provided for an extension of this reduction until the next budget in October.

The amendment relates to VAT. There has been an increase in VAT receipts. In 2020, VAT receipts for domestic energy and auto fuel amounted to €755 million. In 2021, the amount involved was €933 million. That represents a 24% increase in the VAT collected on the previous year.

However, we must acknowledge that is not a normal year-to-year comparison when people are looking at these issues, as in 2020 we were very much dealing with the Covid situation and transport and many other things were much reduced at that time. It is very important to note the increase in VAT receipts is still less than the Government expenditure to help households with the cost of living. These include the various packages I have mentioned so far, such as the February package, the March reduction to excise duties and May VAT reduction on gas and electricity. That does not even take account of the measures announced in budget 2022. The idea of a tax windfall is therefore misleading. According to the most recent stability programme update Ireland is still on track to have a €2 billion deficit, so we are in deficit this year. The additional revenue arising from VAT on domestic energy products is still less than either of the measures announced to help with the cost of living or Ireland's projected deficit for the year.

Amendment agreed to.

I move amendment No. 2:

In page 24, between lines 7 and 8, to insert the following:

“Review of operation of wage subsidy schemes

11. (1) The Minister shall, within six months of the passing of this Act, cause to be laid before both Houses of the Oireachtas a report on the payment to employers of amounts under the provisions of section 28 or 28B of the Emergency Measures in the Public Interest (Covid-19) Act 2020 (in this section referred to as the “wage subsidy schemes”).

(2) The report under subsection (1) shall include reports on—

(a) the performance by the Minister of his or her duty under section 28A of the said Act,

(b) any assessment made, data compiled or opinion expressed under or for the purposes of subsection (5) of the said section 28A, and

(c) whether and to what extent employers, which were companies, paid a dividend or made any other distribution out of profits to their members in a year during which they were beneficiaries of either or both of the wage subsidy schemes.”.

The amendment is fairly straightforward. We are looking for a comprehensive report into the operation of the wage subsidy scheme. As we know, the wage subsidy scheme itself was an incredibly significant intervention made in the economy to support jobs and businesses during a very difficult time in our economy and in respect of the significant public health measures that had to be introduced and that disrupted our society and economy. From communications with the Committee of Public Accounts and correspondence it received from, for example, the Revenue Commissioners, the Department of Finance and the Department of Social Protection I am aware the latter is undertaking a formal examination into the operation of the wage subsidy scheme. That in itself is to be welcomed but is not what I am looking for with this amendment.

The Minister of State knows the Minister for Finance has particular responsibility for the management of the scheme under the legislation introduced with the support, to the best of my recollection, of everyone in this House just over two years ago. It is important given the enormous level of transfers the wage subsidy schemes represent - billions of euro were transferred to private enterprise and workers by the State - that there is a proper analysis of the operation of the scheme. The Minister of State and everyone in the House know that when we were developing this legislation, which garnered cross-party consensus and support given the nature of the problems we were facing this time two years ago, we insisted there should be forms of conditions attached to the level of expenditure this scheme would involve from the State. There was to be an unprecedented transfer of wealth from the State to private enterprise and workers and it was reasonable to expect there would be some conditions attached. Those might have been conditions around a requirement for decent work, a no lay-offs policy and, significantly, a prohibition of the payment of dividends and distribution to shareholders where companies were benefitting from the wage subsidy scheme. Unfortunately, those appeals fell on deaf ears.

Figures revealed to me through replies from the Minister for Finance to parliamentary questions last week show only 19 companies that paid dividends out to shareholders returned the full amount of the wage subsidy to the Exchequer. The figures from the reply, based on information from the Revenue Commissioners, suggest at last count about 641 companies that benefitted from the wage subsidy scheme paid out dividends or other forms of distribution to shareholders. That is a paltry amount of money paid back by companies that clearly did not require the support and largesse of the taxpayer at what was a difficult time for the economy. I am not suggesting for a minute those companies did anything illegal. They did not do anything unlawful because this House decided not to impose any restrictions in that regard in respect of the legislation governing the temporary wage subsidy scheme, TWSS, and then the employment wage subsidy scheme, EWSS. At the time the argument with the TWSS was this was money we needed to get into the hands of employers and workers very quickly. That is why no consideration was given to the attachment of any strict conditions, outside the 30% threshold and so on, for companies to qualify for the scheme. However, knowing the performance of the TWSS and having knowledge about how it worked, we had time and should have had the space to impose some kind of conditions to drive better outcomes for the taxpayer and our economy more generally when we were awarding such large sums of money to companies. These were companies that needed it to a very large extent. Most companies needed it. Most companies did not pay out dividends to shareholders but we know from Revenue 641 did and only 19 companies returned the full subsidy amount they received thanks to the taxpayer to the Exchequer.

It is in that context I ask the Minister of State to support the amendment. It is reasonable given the sums of money involved that there be clarity and full probity. Not only should the Department of Social Protection, supported by the Department of Finance and Revenue, undertake a formal examination into the operation of this scheme but there should be a full account of how that money was spent and how successful the scheme was. We know it was successful in achieving its aims and everybody understands and recognises that, but we need a full examination of the operation of the scheme and the care and management of it under the auspices of Revenue and the Department in the guise of the Minister for Finance. We need that undertaken. We need it to be done quickly. The scheme itself is coming to an end and it is in the interests of the taxpayer and of transparency and full accountability that an initiative of this nature is undertaken and a report be provided to this House, laid before both Houses and in time debated in the Chamber.

I acknowledge the amendment put forward by the Deputy. In response to the Covid-19 pandemic the Government introduced a range of supports for businesses including the TWSS and the EWSS. The wage subsidy schemes were emergency support measures introduced and developed in extraordinary times. Both the TWSS and the EWSS are statutory schemes underpinned by legislative provisions in the Emergency Measures in the Public Interest (Covid-19) Act 2020, as enacted the Oireachtas. The wage subsidy schemes have been at the centre of the Government's response to the pandemic with substantial supports amounting to €10.6 billion being provided to date. Of that, €2.8 billion is attributable to the TWSS, €7.8 billion to the EWSS, €6.78 billion to subsidy payments and €1.03 billion to PRSI foregone.

The TWSS was introduced in March 2020 to support viable firms and maintain the relationship between employers and employees. At the outset, it was expected the TWSS would be in place for a period of 12 weeks but it remained in place until 31 October 2020, a period of five months, due to the public health restrictions. The TWSS was replaced by the EWSS with effect from 1 September 2020. The EWSS operates as an economy-wide support with the objective of supporting businesses, encouraging employment and helping maintain the link between employers and employees. The current longevity of the EWSS was never foreseen or anticipated at that time.

I am confident the Minister for Finance satisfactorily fulfils his duties and obligations required of his role and the Department as specifically set out in sections 28A(4) to 28A(6), inclusive. The duties and obligations are to monitor and superintend the scheme, to carry out an assessment of the scheme at least every two months and after such an assessment to determine, following consultation with the Minister for Public Expenditure and Reform and the Minister for Social Protection, whether it is necessary to exercise the powers conferred on the Minister to adjust certain aspects of the scheme.

More broadly, and perhaps this is the issue the Deputy is endeavouring to touch on with his amendment, I am satisfied that the wage subsidy schemes were an efficient use of taxpayers' resources. The employment wage subsidy scheme, EWSS, acted as an appropriate and necessary stimulus to the economy mitigating the effects of the pandemic on the economy.

I am also satisfied that the wage subsidy schemes achieved their objective to support employment and maintain the vital link between employers and employees. Putting this in context, 67,000 employers availed of the temporary wage subsidy scheme, TWSS, in respect of almost 690,000 employees. That is a phenomenal number of employees that were directly supported by this scheme. To date, 52,000 employers availed of EWSS in respect of 733,000 employees. I am also confident that in these unprecedented circumstances the EWSS was appropriately calibrated in terms of supports to business.

The Government adopted a prudent and phased approach to the extensions of any of these schemes. As I said, it was never envisaged at the outset of these schemes how long they would be required. The success of the schemes is clearly evident by how quickly our economy has adapted and recovered following the lifting of public health restrictions.

Furthermore, without the support of EWSS many businesses might not be in existence today. I am satisfied that the EWSS operated as an effective and responsive measure to aid economic recovery during these unprecedented times.

Since the introduction of the scheme, it has been under active consideration and review in terms of its responsiveness, cost and impact which, in turn, inform the policy responses and any amendments to the scheme. As I said, we moved from one scheme to the other because of the various circumstances.

In addition, section 28A(5) of the Emergency Measures in the Public Interest (Covid-19) Act 2020 provides that an assessment shall be carried out at least every two months. While the legislation does not stipulate that a report must be prepared, my Department prepares bimonthly EWSS utilisation papers which capture the key analysis of the scheme. These papers have been completed since the introduction of the scheme and the papers which have been furnished to me are published on the Department's website. The information the Deputy is talking about is available on the Department's website and has helped consideration of the scheme.

In relation to the companies which avail of the wage subsidy scheme which may have paid dividends to their shareholders, I would point out that the eligibility criteria of the wage subsidy scheme, as provided for in the legislation, do not include any conditions in relation to a company making a distribution to its shareholders. Thus, there is no impediment on an employer paying dividends to its shareholders and this is a business decision for an employer to take based on the financial circumstances.

As I have stated on many occasions, the overwhelming majority of companies that have participated in the wage subsidy scheme did so because they genuinely believed they would need support at that point based on the effect of the pandemic on their business. The experience of both Revenue and my Department is that employers participating in the scheme did so in good faith.

As regards the Deputy's amendment for a report on whether and to what extent companies paid a dividend while they availed of the wage subsidy schemes, I am advised that the Revenue recently carried out a short exercise to identify dividend withholding tax returns filed by EWSS claimant companies in respect of distributions in 2021. The dividend withholding tax applies to a wide range of different types of distribution. This includes both intra-group distributions and dividends paid to shareholders, both cash and non-cash distributions, for example, the use of additional shareholding by way of additional shares. The dividend withholding tax, DWT, neither distinguishes between these different forms of distribution nor sets out the accounting period to which the distribution may relate. Therefore, the Revenue advises that it is not possible to determine whether distribution payments relate to profit reserves earned before or during the pandemic. It is important to put that on record. Sometimes dividends might get paid at a later date and some of them may relate to profits that had existed prior to the introduction of the scheme.

As the Deputy said, the Revenue's exercise showed that 641 employers out of a total of 51,900 which had received EWSS filled dividend withholding tax returns advising of some form of distribution during this period. However, it is not possible to determine whether the distributions were cash or non-cash in nature or whether any dividends were paid to shareholders. At the time, the 641 companies had received gross EWSS subsidies of €267.8 million. Nineteen of these employers have returned all subsidies received totalling €27.9 million while 84 have partially repaid EWSS received amounting to €5.8 million.

I understand this information has already been supplied directly to the Deputy. At least we are all speaking from the same factual basis.

For the reasons I have outlined, I am not in a position to accept the Deputy's amendment.

That information was, indeed, provided to me by way of reply to a parliamentary question but that ought not to be the case. That information should be regularly available.

Sadly, the point I am making seems to be lost on the Minister of State. We have spent over €10 billion on an objectively successful wage subsidy scheme. Nobody is saying otherwise. The scheme has been objectively successful in doing what it was initially designed to do. Everybody accepts and understands that. What I am asking is that as the scheme winds down, given the scale of the resources allocated during the lifetime of the TWSS and the successor EWSS, we require a comprehensive, detailed report into the operation of the scheme from the point of view of probity and financial transparency on that significant transfer of resources from the Exchequer to private enterprise and on to workers. That is not too much to ask. It is a reasonable request. That is the kind of assessment we need to inform public policy-making into the future because we do not know when we will require an intervention such as this again.

I remember arguing in another House following the Brexit vote that we would require a form of wage subsidy scheme that was being floated by the Irish Congress of Trade Unions and others in response to the shock that Brexit might present to our economy, and especially specific sectors. I have been making the case, for example, for a German-style wage subsidy scheme with various conditions attached that would be a permanent feature of the labour market to help us to deal with any shocks that may arise in the future and that we cannot anticipate. From a public policy point of view and from a financial transparency and probity point of view, I fundamentally believe that an initiative such as this is required and that it should be laid before both Houses of the Oireachtas and debated here given the scale of the resources that, as I said, were transferred from the Exchequer to private enterprise and on to workers.

I reiterate the legislation provided that an assessment shall be carried out every two months. While the legislation did not stipulate that a report be prepared, the Department prepares bimonthly EWSS utilisation papers which capture all the information the Deputy is seeking. The Minister has reviewed all of these and they are on the Department's website. All the information that was originally suggested as part of the original legislation by way of a report is out there on the Department's website and that is helpful and beneficial.

There is ongoing and active monitoring of EWSS by both the Department and officials, including the publication of the analysis, as I said, and the utilisation papers. I do not consider that a further report is required at this time.

Essentially, the Deputy is asking me to prepare a report on the information that is already on the Department's website. I am saying it is there and everybody should be able to read it without the Department having to produce a report by another name.

Not every two months but on the performance of the old ones.

The information is already on the website and we do not need to produce a report on what is on the website. It is there for everybody to see.

I might also add, insofar as EWSS is concerned, the main purpose of the Bill was to give statutory effect to the enhancements that were agreed by Government that are currently being operated by the Revenue under the care and management provision.

Importantly, the Central Statistics Office has recently issued a publication stating that 84% of enterprises survived at the end of 2021. Looking at the 2020-21 period together, 10% of enterprises are at risk of closing. Approximately 6% appear to have closed. Of those engaged pre-Covid, 94.3% were with an enterprise that has survived. I consider that a phenomenally high success rate. Leaving aside the Ukraine issue, we were experiencing such a strong rebound in the economy following Covid because we kept businesses alive and kept the links with employees.

The scheme was successful overall. The information relating to the operation of the scheme is published on the Department's website on a bimonthly basis. For those reasons, I am not in a position to accept the Deputy's amendment.

Amendment put and declared lost.

Amendments Nos. 3 to 7, inclusive, are related and will be discussed together.

I move amendment No. 3:

In page 24, to delete lines 9 to 56, and in page 25, to delete lines 1 to 16 and substitute the following:

“11. (1) The Finance Act 1999 is amended with effect as on and from 10 March 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

10 March

2022

€474.11

€474.11

€413.51

€413.51

€413.51

€84.84

€118.01

€120.55

€118.27

€54.68

€9.36

1 April 2022

€465.98

€465.98

€405.38

€405.38

€405.38

€84.84

€118.01

€120.55

€118.27

€54.68

€9.36

1 May 2022

€465.98

€465.98

€405.38

€405.38

€405.38

€103.83

€141.12

€138.17

€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

I will deal with amendment No. 3 in the first few moments of my contribution and I will then, as part of the group discussion, deal with the Opposition amendments from Deputy Doherty. Amendment No. 3 provides the necessary legislative basis for the changes approved by the Dáil under the financial resolution of 27 April. This extends and enhances the excise reduction brought forward on Committee Stage of the Bill. The background to this amendment is that the Government brought a financial resolution to the Dáil providing for excise duty decreases on mineral oil taxes with effect from 10 March. This provides for a 20 cent reduction in the excise rate for petrol and a 15 cent reduction in auto diesel, with a proportionate 2 cent reduction in the excise for marked gas or green diesel, as it is commonly known. These measures were VAT-inclusive and are set to last until 31 August 2022. This was estimated to cost €320 million. These reductions were then provided for on Committee Stage of this Bill.

The purpose of these Report Stage amendments is to extend the excise duty decreases until 11 October 2022. When this Bill was originally brought before the Dáil, it was intended that these measures would last until 31 August. This amendment is to extend the duty decreases until budget day on 11 October 2022. We are extending the period during which the reduction will be applied. Those reductions were discussed on Second and Committee Stages. This is the Report Stage amendment.

It also provides for a further reduction in the mineral oil tax rate on marked gas oil, which amounts to a VAT inclusive reduction of 3 cent effective from 1 May until 11 October. This has already been done on a temporary basis by a financial resolution moved last week. The Report Stage amendment is to provide for these changes in this Bill. The excise reduction extension and the further reduction in the rate applied to marked gas oil will cost an estimated €97 million, that is, €80 million for the extension and €17 million for the marked gas oil. We have had many debates in the House in recent weeks about the ongoing energy price crisis and I have said before that it is not possible to offset all of the recent increases by just using the taxation system. However, the Government is committed to doing what it can to provide significant mitigation against recent price fuel increases. The extension of these excise reductions until budget day provides certainty to citizens and strikes a balance between passing on a significant benefit to consumers, managing the tax base and respecting the minimum rates allowable under the energy tax directive from the EU. I commend this amendment to the House.

Deputy Doherty has submitted amendments Nos. 4 to 7, inclusive, which are grouped for discussion with amendment No. 3. I will now deal with those Sinn Féin amendments. The Deputy's amendments propose various further rate reductions from 1 May until budget day. He seeks to reduce mineral oil tax rates on petrol and diesel to the minimum rates as prescribed in the energy tax directive and to further reduce the rate on marked gas oil by 2 cent. The amendment also seeks to remove the carbon component of kerosene, reducing the overall rate of tax to zero. The proposal is to remove the carbon tax component on kerosene, thereby reducing the rate to zero. That is the essence of the amendments.

The proposed mineral oil tax for diesel would not be compliant with the minimum rate set out in the energy tax directive at EU level. The combined effect of the measures the Government has already provided means that the current mineral oil tax rate for diesel, in addition to the diesel rebate scheme, is effectively at the minimum level allowable under the energy tax directive. Any further excise reduction, as the Deputy is proposing, would bring the effective rate below the minimum permissible rate. To apply a mineral oil tax rate of 33 cent per litre would mean the Government would have to scrap the diesel rebate scheme, which is a targeted support for hauliers and public transport operators. The mineral oil tax on kerosene for home heating has a non-carbon component rate of zero. The carbon component is currently €103.83 per 1,000 l. In other words, there is only carbon tax on kerosene. The Deputy proposes removing completely the carbon tax element, thus reducing mineral oil tax to zero.

Similarly, the reductions the Government is providing for the rate of mineral oil tax on marked has oil means that the non-carbon component is now zero until 12 October. As there will only be carbon tax on this fuel, the further reductions on mineral oil tax proposed by the Deputy would also involve reducing the carbon component of this fuel.

Deputies will be aware that the 2020 programme for Government committed to increasing the amount that is charged per tonne of CO2 emissions from fuel to €100 by 2030. The Government has followed through on this commitment by introducing legislation in the Finance Act 2020 to provide for a ten-year trajectory of carbon tax increases to reach €100 per tonne of CO2 by 2030. This measure is a key pillar underpinning the Government's climate action plan to halve emissions by 2030 and reach net zero no later than 2050.

A key further component of the Government's carbon taxation policy is the hypothecation of revenues, an issue the Deputy has raised before. It is important to say that when revenues come in, we know we have a carbon budget and when we get funds from carbon, we are in a position to allocate it to various purposes to assist people in fuel poverty and take various other measures. Without that tax, there would be a difficulty in funding the various other measures about which we are talking. It is important to note that a significant proportion of carbon tax revenue is allocated for expenditure on targeted welfare measures and energy efficiency measures which not only support the most vulnerable households in society but also, in the long term, provide support against fuel price impacts by reducing our reliance on fossil fuels. The fuel allowance does not cover all the fuel needs of those availing of it and it never has. It nonetheless provides a significant reduction on the cost of fuel. People availing of the fuel allowance are receiving more than €1,000. As I mentioned earlier, there have been reductions in the cost of school transport. There is also funding available for the various agri-environment schemes and for the retrofit schemes. All those schemes have to be funded from somewhere and carbon tax is an element of that. It is important that we are consistent. If we want to pay for these schemes and reduce our carbon emissions, we should link those two elements. For those reasons, I cannot accept the Deputy's amendments.

(2) The Finance Act 1999 is further amended with effect as on and from 1 May 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

10 March

2022

€474.11

€474.11

€413.51

€413.51

€413.51

€84.84

€118.01

€120.55

€118.27

€54.68

€9.36

1 April 2022

€465.98

€465.98

€405.38

€405.38

€405.38

€84.84

€118.01

€120.55

€118.27

€54.68

€9.36

1 May 2022

€465.98

€465.98

€405.38

€405.38

€405.38

€103.83

€141.12

€111.14

€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

I want to reflect on sections 5 to 10, inclusive. Given the deadline that was imposed for Deputies to submit amendments, it was not possible for me to capture all that was required but I think it is important to reflect on the extension of the debt warehousing scheme, which will now apply to directors and employees with a material interest in a company who will be allowed to warehouse tax liabilities relating to schedule E income from a company where their income is self-assessed. Previously, if a company availed of debt warehousing for PAYE employers liability, any directors or employees who had a material interest in a company could not claim credit for taxes deducted if those taxes had been warehoused and not paid over to Revenue by the company. This meant these directors and employees would be personally liable for these tax liabilities but it would only apply for income tax warehousing.

Sections 72 and 73 of the finance Bill brought forward by the Government changed that arrangement by allowing individuals who did not qualify for income tax warehousing to warehouse tax liabilities relating to their schedule E income from that company. We now know, and it has been in the media today, that high-wealth individuals who have a net wealth of €20 million or more have through this scheme warehoused €6 million in tax debt, availing of beneficial repayment and interest provision. There are serious questions about how the Dáil and the Government can stand over that arrangement. I call on the Minister of State not to extend this part of this section to those individuals. It should never have been allowed in the first place.

Amendments Nos. 4 to 7, inclusive, are in my name. The purpose of the amendments is to provide further relief and support to hard-pressed households during this cost of living crisis. As I have stated many times, and I will do so again, Sinn Féin recognises that the Government cannot shield everyone from every single price increase.

However, we are fully aware that the Government can and should do more to support workers and families who, without support, cannot withstand the price increases without significant financial hardship.

Amendment No. 4 would reduce the price of petrol by a further 13 cent, including VAT. It is very important to make the point that the Minister of State gave no reason this could not be done. This is simply policy and there is nothing preventing us from doing this. We can do it today if we vote on it and reduce the cost of petrol for motorists. Amendment No. 5 would reduce the cost of diesel by another 9 cent per litre, including VAT. Both amendments are consistent with the requirements of the excise directive. As I have stated on numerous occasions, amendment No. 5 would require the temporary suspension of the diesel rebate scheme but would ensure the benefits of that scheme continue to be enjoyed for those who qualify due to the excise reduction provided by the amendment. The diesel rebate scheme is a way for the Government to reduce excise for a small, limited number of people. It applies to some hauliers and some transport operators, although not all of them. We are proposing to suspend that for the moment and give them the rebate or reduction directly at the pump, while giving all other motorists that rebate as well. There is nothing preventing us from doing that, apart from political ideology. Amendment No. 7 provides a further reduction in the price of green agricultural diesel, which is so important for our agricultural contractors who are not able to avail of the double carbon tax reliefs. That would be a reduction of 3.3 cent per litre VAT inclusive, relative to the price in April of this year.

Crucially, amendment No. 6 addresses the spiralling cost of home heating oil, which is completely out of control. This impacts one out of every three houses across the State. In places like my county of Donegal, it is two out of every three houses. Right down the west coast, 66% of people, or two out of three households, depend on home heating oil as their primary source of heating. In the last period, home heating oil has hit massive prices. It cost €1,700 in March to fill a tank with oil. The price has more than doubled in the space of a year and many households cannot bear this cost. With this amendment, we are proposing to reduce the cost of filling a tank by €118. Many households simply cannot bear these price increases. Not only have they been forgotten by this Government, they have been punished by it. Last week, the Government voted against a similar motion from Sinn Féin that would have removed excise duty on home heating oil and reduced the price from Sunday past. Not only did the Government vote against our motion, it went one step further and jacked up the price of home heating oil, increasing pressure on one out of three households across the State and two out of three households across the west and north west who rely on that source of fuel to heat their homes and their families. Amendment No. 6 is another opportunity for Deputies to do the right thing and reduce the cost of home heating oil. I ask them not to blow it this time. We are putting this amendment forward to give real relief to families in the middle of all this pressure. Hopefully, the Government will have seen sense since last week.

The Minister of State spoke about hypothecation. I pulled him up on this last week. There is no tax in Irish tax law that is hypothecated or ring-fenced. The idea that if we reduce carbon tax we will not be able to fund other measures is nonsense. The tax goes into a central pool. This is an ideological issue. It is a policy issue and policies can differ. There is no legal impediment to funding retrofitting from VAT, income tax or anything else because the money all goes into a central fund. This is about excise duty and carbon tax. I am glad the penny has finally dropped for the Government that there is excise duty on these things. In fairness to those in Fianna Fáil, to give them their dues, they did not take out false, misleading, Trump-style attack ads about this. It was Fine Gael that led the charge on that.

I commend these amendments to the House. They would have a real impact on a lot of people who are struggling with the costs of getting from A to B because of diesel and petrol and, crucially, would help all the households that are trying to keep their homes and families warm.

I acknowledge the amendments put forward by the Deputy in response to the Government amendment. With regard to the issues he raised around the tax warehousing scheme, this scheme is an essential element of the assistance provided by the State with the EWSS and TWSS. The tax debt warehousing scheme has offered valuable and practical liquidity support to businesses. It has assisted businesses with their cash flow during difficult trading periods. The objective of the scheme was to allow firms to recover, thereby helping them guarantee their long-term economic viability and survival. The scheme applied to VAT, PAYE, PRSI, employer debts and certain self-assessed income tax debts, as well as overpayments of both the TWSS and the EWSS. In the provision of the warehousing scheme, we acknowledged that there might be some overpayments of the TWSS and EWSS and there was a facility for warehousing of those payments on a cash flow basis. To qualify for the debt warehousing, businesses must continue to file a tax return even though their liability cannot be paid. This has always been a condition of the scheme. Whether it is VAT returns or PAYE information, employers have to state the amount of tax they should be returning on a weekly or monthly basis. They complete the form but do not have to return the cheque if they are not in a position to do so. Revenue knows exactly how much is being warehoused on a company-by-company basis. It is important to recognise that. People have come to me locally who are running their family hotels and were not able to avail of the various schemes because they were a director and were self-employed on that basis. The Deputy will be aware of this issue. Sometimes there are two or three in the family running a hotel and they have been excluded from these schemes. That is why they are asking for them to be extended. I hope the Deputy is not saying hoteliers who run family businesses should not be included because they might be self-employed and making their own separate tax returns other than through PAYE. I think he understands there was merit in extending the scheme to many people in those situations.

Amendment agreed to.

Amendments Nos. 4 to 7, inclusive, cannot now be moved as they are direct physical alternatives to amendment No. 3.

Amendment No. 3 is in the name of the Minister of State. Amendments Nos. 3 to 7, inclusive, were grouped and amendments Nos. 4 to 7, inclusive, were physical alternatives to No. 3, so now that amendment No. 3 has been accepted, the subsequent amendments cannot be moved.

I was not aware of that when we were debating.

Amendments Nos. 4 to 7, inclusive, not moved.
Bill, as amended, received for final consideration.
Question proposed: "That the Bill do now pass."

Does the Minister of State wish to speak on the Bill?

No. We have had quite a discussion on the contents of this Bill, both during the resolutions last week and again here today. It was also previously discussed on Committee Stage and we had a number of debates last week during Private Members' time dealing with cost-of-living issues, which were very much concentrated on the issues before us. We have had extensive debate so I have nothing further to add to what I have said on the topic in this House in the last week or so.

I was not aware that the amendments could not be moved. I knew they were grouped for debate purposes and given the guillotine the Government placed on the debate I restricted my contribution. If I had known there would not be a vote, which was not explained, I would have contributed further.

My apologies if I did not make it clear but I thought it was-----

It is no reflection on the Leas-Cheann Comhairle. I understand the fact the amendments were directly opposite to each other.

This is a missed opportunity for the Government and, indeed, this House to do the right thing. We have a serious problem right across the board, in every village and every community, where families are hard-pressed as a result of the cost-of-living crisis. The Government has its head in the sand about home heating oil. For the life of me I do not understand how, when the cost of home heating oil has increased by 127%, the response of the Government, collectively, can be to increase that further while hiding behind the fact that it is a carbon tax. The people who are struggling to keep their homes warm do not care what the tax is called. They expect the Government and their representatives to represent them and address their interests in their time of need.

The Government has again refused to support amendments that would have reduced the pressure on ordinary families across the board, not only with home heating oil, but with petrol, diesel and in support of our agricultural community. It is an indictment of this Government, which is very much out of touch with ordinary people. We did not oppose the most important part of this legislation, which was to reduce VAT temporarily from 13.5% to 9%. I put on the record that we called for a VAT reduction about six months ago and for the Government to engage with the Commission. The first formal engagement was this March. Those letters still have not been published. None of that engagement resulted in the changes, because these changes were in draft form as late as last year.

Sometimes, I think I would be better off banging my head against the wall instead of asking the Government to respond to the real needs of ordinary families and workers, but I will do it once again. The Government should reduce excise on home heating oil. It should reduce the cost of petrol, diesel and agricultural diesel. It should stop pushing up prices on necessities for families to keep their homes warm. On Sunday, it allowed the cost to fill a tank with home heating oil to increase by €20, which is nothing short of scandalous.

Question put and agreed to.

The Bill will now be sent to the Seanad. I thank Deputies for their co-operation.

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