Finance Bill 2019 [Certified Money Bill]: Report and Final Stages

Before we commence, I would like to remind Senators that a Senator may speak only once on Report Stage, except the proposer of a recommendation who may reply to the discussion on the recommendation. On Report Stage, each non-Government recommendation must be seconded.

Recommendation No. 1 in the names of Senators Higgins and Ruane is out of order as it involves a potential charge to the Exchequer and does not arise out of committee proceedings. Recommendation No. 2 in the names of Senators Higgins and Ruane is out of order as it does not arise out of committee proceedings.

Recommendations Nos. 1 and 2 not moved.

Can I speak on that recommendation on behalf of Senator Higgins? She was wondering if it would be possible-----

The Senator cannot speak to it because it has been ruled out of order.

Can I request that it be resubmitted?

No. Recommendation No. 3 in the names of Senators Higgins and Ruane is out of order as it involves a potential charge to the Exchequer and does not arise out of committee proceedings. Recommendation No. 4 in the names of Senator Higgins and Ruane is out of order as it is not relevant to the subject matter of the Bill and does not arise out of committee proceedings. Recommendation No. 5 in the names of Senators Higgins and Ruane is out of order as it does not arise out of committee proceedings. Recommendation No. 6 in the names of Senators Higgins and Ruane is out of order as it does not arise out of committee proceedings. Recommendation No. 7 in the names of Senators Higgins and Ruane is out of order as it does not arise out of committee proceedings.

Recommendations Nos. 3 to 7, inclusive, not moved.
Bill reported without recommendation and received for final consideration.
Question proposed: "That the Bill be returned to the Dáil."

The Report Stage recommendations have been ruled out of order and therefore this Chamber is about to end its consideration of the finance Bill. Bearing in mind the political season we are in and the-----

The season of goodwill no doubt.

-----calendar season, it occurs to me there are a few things that ought to be said. First, we should remember what is not in this legislation because this is probably the last finance Bill this Government will introduce. There are some things that I deeply regret are not in this legislation. I have spoken about them before in this House and I am not making party political points but the non-inclusion of these matters should be recognised. One of those is a matter I was dealing with today in the Joint Committee on Communications, Climate Action and Environment, namely, the proposal by the committee that the Revenue Commissioners be given the function of collecting a broadcasting charge instead of what the Government has done in kicking the can down the road with a five-year tender process leading to a delay of between five and seven years in reform of the manner in which public sector broadcasting is financed. It occurs to me the Revenue Commissioners is the obvious body to carry out that function. I do not want to get involved in broadcasting policy except to say that at the moment An Post engages in collecting payment for the television licence from many homes. It is an inefficient system that requires inspectors, research and many other things of that kind to be done. If we had-----

I have been asked to remind the Senator that the question being put is, "That the Bill be returned to the Dáil." This is not the time for a Second Stage debate.

I ask the Senator to conclude as quickly as he can.

I will not be long and I am not engaging in any kind of filibuster. I am just saying-----

On a point of order, Senator McDowell does it with style.

That is not a point of order, as Senator Kieran O'Donnell well knows.

Disappointment is for next year.

It is a pity the Revenue Commissioners have not been given that function and that the non-collection of the licence fee has been kicked down the road.

On a second point, which is one the Minister of State, who is welcome, has heard me make before in this Chamber, the 33% rate of capital gains tax is too high.

The Senator said that last week as well.

The result of it being that high is we have a diminished flow of transactions that are liable to capital gains tax. If we were to reduce the rate of capital gains tax from 33% to 20%, the revenue jump for the Government would be very useful in financing many social expenditure programmes.

My third point is not party political either but should be mentioned today. The universal social charge, which was due for abolition in the term of this Government according to certain parties that I will not name because of the Christmas spirit and charity that is around, is still in place. We should mark that point as well.

Fourth, I acknowledge that this is a minority Government which has to govern with the input of others. Nonetheless, the entry point for the top rate of tax plus the universal social charge for many ordinary workers is far too low. That, too, was supposed to be dealt with in the lifetime of this Government and for various reasons it has not been. In that context, I am saying that if we are-----

We have to pull the Senator up on that one.

-----sending this Bill back to the Dáil, the record should at least show that these matters were mentioned in the House.

I want to make a number of points.

Look what Senator McDowell has started.

I love the revisionism that applies to the Progressive Democrats era. It is great. We should bring back former Deputies Mary Harney, Desmond O'Malley-----

-----Michael McDowell and Tom Parlon. We should bring back the low tax and the light-touch regulation. I am fond of Senator McDowell but when Irish history is written the role of the Progressive Democrats and Fianna Fáil will be-----

We are concluding the 2019 Finance Bill.

I remind my learned colleague and friend that in every one of their budgets, this Government and the previous Government reduced the universal social charge. I remind the Senator to look to the corner of the House to the Fianna Fáil benches.

We have concluded the debate on the Bill.

This a bit of education.

The Bill is couched and framed in the Brexit timetable. When the budget was passed and the finance Bill was being drafted, there was a great deal of uncertainty. I remind Senator McDowell that the reason so many people are still paying the universal social charge is the legacy of the Fianna Fáil and Green Party Government that bankrupted our country and robbed a generation of a future and, prior to that-----

I am indulging Senator Buttimer too much.

Do not forget the Progressive Democrats.

I will come to that. Let me add to that, the policies of the Progressive Democrats, individualisation-----

I am indulging the Senator but the debate has concluded.

I want to make the point that-----

Do it as briefly as possible.

The Green Party is not eligible for partnership after the next election.

We have got that point.

We have been reminded of it.

The important point I want to make, and as I keep saying to people, and I remind Members and those watching and listening to the debate, is that if people buy a car or television, they do not return to the salesperson who sold them a ramshackle, banjaxed vehicle or product in the first place. Rather, they stay with the people who brought our country back to full employment-----

Deputy Buttimer, I have indulged you quite a bit.

I am about to make the point, if the Acting Chairman would let me, that-----

Nearly as much as Senator McDowell.

I was relevant. He is not.

The point I want to make on the Finance Bill is that developing and maintaining a skilled technological workforce is a major priority for Ireland. Last Friday, I happened to be at an event and was fortunate to be able to substitute for the Tánaiste-----

It was not in Cork, by any chance?

It was in Cork North-Central. My point is about research and development. It is through connectivity between business and foreign direct investment, FDI, that we can have innovative solutions to the challenges we face, for example, in food issues, which we found with NutRI last Friday in Cork Institute of Technology. It is important in the context of this Finance Bill, given that we have an economy with full employment, we are the fourth highest placed country in the world in the UN index, and in the context of where we are going, that it is a case of steady as we go.

It is important to recognise the point Senator McDowell made regarding RTÉ. I made the point in the House last Thursday, in the context of councillors' pay and conditions, that it is a very important question that we cannot just gloss over-----

I ask the Senator to conclude.

I will conclude on this, because it is an important point that will affect every citizen. The chief executive-----

It is why I am letting you conclude.

-----or rather the director general of RTÉ made a good point today in terms of the cost of RTÉ being 44 cent per day compared with what we are getting from services like Netflix, Sky or whatever. In the context of the point Senator McDowell made, I made the point in the House last Thursday, and I ask to be let make this point without interruption, because it is an important one, that we have established citizens' assemblies to examine many different issues around gender. I made the point last week that we should also look at the role of local government. The issue of RTÉ and the licence fee collection and the level of licence fee payment should also be part of a citizens' assembly, that we should not kick the can further down the road, and that we should have an honest debate about it. We cannot have it here. Pat Rabbitte attempted it and he was pilloried by sections of the Fourth Estate. We need public sector broadcasting. "Sunday Miscellany" and arts and sports programming are examples that show there is a real need for public service broadcasting. There is an opportunity to expand the remit of the citizens' assembly being established in January to include the role of RTÉ and the amount and collection of the television licence fee.

I want to address Senator McDowell on one point.

If I had a choice between reducing capital taxes or income taxes, I would probably choose to reduce income tax. I am putting that in context. Governments have to make decisions. We have reduced income tax rates.

Capital gains tax will raise more if it is cut.

Once again, it is a decision for Government.

It may be a very valid point, but it is not relevant. Senator O'Donnell has made his point. I want to let the Minister of State conclude.

I thank the Minister of State for allowing us to engage with his officials on the Living City initiative. The take-up in Limerick has been much lower than I would have liked. We need to look at the scheme. It is a Georgian city and it is critical to its development.

Senator O'Donnell articulated that point particularly well last week.

I want to touch on a couple of the issues raised. I will start with the point at which average income earners move on to the higher rate of tax. It has been identified as a significant negative for taxpayers earning an average income in Ireland. We know it is an issue in terms of getting FDI jobs into Ireland. We know people move on to the rate of higher tax too quickly, when they earn €35,300 per annum.

We are an unusual jurisdiction, probably one of very few in the OECD where average industrial earners move on to the higher rate of tax at the average point. It is something we have said we want to deal with and that we want to move the dial. The Taoiseach has said that we need to move towards a system like that in the UK, where the point would be €50,000. The equivalent figure in the UK is £50,000. We will try to get there over time if we are returned to government. It is our objective that people can earn more money, pay less tax and make a determination themselves about how they spend their money.

The receipts for capital gains tax totalled €415 million to the end of November, an increase of €69 million against profile. It is coming in at quite a substantial rate. We do not know whether it will increase unless we cut it. What Senator McDowell said is correct historically, but it may not happen again. Some people believe it will, but others believe it will not. We think 33% is an appropriate rate right now. It was 40% and was reduced to 20%. The rate of 33% is a little higher than the midpoint between those two rates. Right now we believe it is the appropriate and correct amount. We do not have wealth taxes, beyond capital gains tax, capital acquisitions tax and the local property tax. In total, those taxes bring in a little more than €1 billion of the €60 billion we collect and spend throughout the year.

I wish to touch on one final aspect. There was a little bit of a barney last week as a result of some of the commentary in the House. I take offence, on behalf of the hospitality sector, which employs a large number of people throughout the country, at what was said by some of my Sinn Féin colleagues as Members of the Oireachtas. They sullied the name of people who employ many staff around the country. They were wrong to say what they said about the finest of business people throughout the country. The comments should be withdrawn because they were wrong, ignorant and ill-informed. I am very grateful for the employment provided by the hospitality sector.

I thank everyone: my officials from the Department of Finance and Senators who participated in the debate. I want to finish with a quote from Keynes. David McWilliams, when making a point about foreign direct investment in a newspaper at the weekend, quoted him as saying, "It is better to be roughly right than precisely wrong." I believe this Government's policies are broadly accurate. The left is merging and seems to be getting ready to form the next Government, in its mind at least. A lot of kisses are being blown between Sinn Féin, the Green Party, the Labour Party and Fianna Fáil. The current Government has the finances of the country broadly accurate. The emergence of a left alliance that wants to enter the next general election will have policies that will be precisely wrong.

Question put and agreed to.