Financial Provisions (Covid-19) (No. 2) Bill 2020: Second Stage

Question proposed: "That the Bill be now read a Second Time."

I call on the Minister of State to speak and congratulate him formally.

I thank the Acting Chairman.

I am pleased to have the opportunity to introduce Financial Provisions (Covid-19) No. 2 Bill 2020 to the House this afternoon. The Bill provides the legislative basis to introduce the tax measures the Government announced as part of the €7.2 billion July jobs stimulus last week.

The plan is the next stage in our response to the Covid-19 crisis and will help businesses get back on their feet, ensuring as many people as possible can return to work in accordance with public health and Government advice. The plan contains a suite of tax, loan and expenditure measures designed to directly support business at all levels of the economy that have been negatively impacted by Covid-19. The plan is the first step in this Government's mission to reignite and renew the economy following the impact of Covid-19. It aims to build on the recovery to date and the measures previously announced with a further €4.3 billion of spending on supports that will have an immediate impact on businesses, employment and economic activity. The overall value of the package, including tax changes and the opening of the €2 billion Covid-19 credit guarantee scheme is €7.2 billion.

Today's debate is focused on the tax measures of the plan that will have a net cost approaching €1 billion.

The total value of the tax package is €1.4 billion, but the amendments to corporate tax losses will be cost-neutral to the Exchequer as they are an acceleration of the ability of companies to avail of a relief that exists in the corporation tax code.

Importantly though, this measure will release up to €450 million of liquidity in the current year to companies currently facing significant cash flow difficulties at a point when they most need it. In addition, the employment wage subsidy scheme, EWSS, will cost an estimated €2.25 billion, guaranteeing substantial State support for employee wages through to March 2021.

The Bill only runs to 13 sections so I will briefly go through them individually. Section 1 is the standard definitions section common to Bills of this nature.

Section 2 makes changes to the temporary wage subsidy scheme, TWSS to include individuals who return to work after maternity and other types of leave, those on apprentice and training courses as well as changes to the subsidy amounts payable that the Minister announced on 15 April last. All of these, and other necessary adjustments to the TWSS, were previously announced and have been administered to date by Revenue on the basis of their care and management provisions.

The section also provides for the EWSS, which will replace the TWSS. It is being introduced as an enterprise support that gives a subsidy to qualifying employers on the basis of the numbers of paid employees on the employer's payroll. The scheme is an economy-wide support and is open to all sectors. The primary qualifying criteria is that the employer must be able to demonstrate that in the majority of cases he or she is operating at no more than 70% in either the turnover of the employer's business or the customer orders received by the employer by reference to the period from July to December 2020 compared with the same period in 2019.

In this regard, given the importance of childcare to the reopening of the economy and also recognising the unique circumstances where the turnover of such businesses would be greater than 70% but the cost base considerably higher, the Government has decided that the key eligibility criteria would be waived for this important sector. The level of subsidy the employer will receive is per paid employee. For every employee paid more than €203 gross per week, the level of subsidy is €203. For every employee paid between €151.50 and €202.99 gross per week, the subsidy is €151.50. A nil subsidy is payable for employees paid less than €151.50 or more than €1,462 gross per week – the latter amount consistent with the eligibility ceiling which exists in the current TWSS. The scheme will be in place until 31 March next year. It is estimated that it will cost €2.25 billion, €1.35 billion in 2020 inclusive of seasonal workers and €0.9 billion in 2021 up to the end of March.

Sections 3 to 5 together, inclusive, a legislative basis for the tax "debt warehousing” scheme announced by the previous Government on 2 May 2020, which is currently being operated by the Revenue Commissioners on an administrative basis. No interest will be charged on the tax debts for the initial Covid-19 restricted trading period or 12 months thereafter. Interest will be charged at the reduced rate of 3% per annum after that. Businesses will also be required to comply with requirements in relation to tax returns for the duration and pay other liabilities such as VAT in full and on time. Otherwise, the normal 10% per annum interest will apply.

Section 6 will add a new interest provision in chapter 5 of Part 47 of the Taxes Consolidation Act 1997, to reduce the interest rate applying to agreed repayments of all tax debt to 3% per annum rather than 8%, 10% or 11.75%, depending on the tax head, where agreement has been reached between the taxpayer and Revenue prior to 30 September 2020. The measure will assist taxpayers in difficulty with their tax returns. I advise them all to check with their accounts and tax advisers in that regard. The purpose of this section is to provide support to taxpayers experiencing difficulty with tax liabilities by reducing the interest rate applying to agreed repayments of all tax debt where agreement has been reached prior to 30 September 2020.

Section 7 provides for the stay and spend incentive, which will incentivise taxpayers to support registered or accredited providers of accommodation or food during the off sseason, thus providing support to a particularly vulnerable sector that will continue to be constrained by public health limitations. The incentive will provide for a refund through income tax of 20% of the vouched cost subject to a minimum spend of €25, that is, a maximum tax credit of €125 per person or €250 for a jointly assessed couple. This innovative measure will be a valuable off season form of support for the hospitality sector. I look forward to hearing the inputs from Senators on this issue and to a healthy debate through the various Stages of the Bill's passage through the House. The incentive provides relief on accommodation and food, including soft drinks, but not including alcohol. Businesses must be registered or accredited as appropriate and have tax clearance if registered for VAT. Businesses will register with Revenue to participate. This scheme will cost up to an estimated €270 million in total. It will run from 1 October 2020 to 30 April 2021, including over the Christmas period and the St. Patrick's Day period next year also. It is designed to unlock money people may have saved over recent months and encourage spending in the sector and local economy. I expect the sector to use its creativity and talent to market and ensure the best use of this opportunity for their businesses and customers. In doing so, I believe there will be wider benefits for the economy that go beyond the hospitality sector.

It is important to recall that the stay and spend incentive should not be viewed in isolation from the other, very significant measures announced as part of the plan. The extension of the wage subsidy scheme until the end of March next year and its extension to new or seasonal staff with effect from 1 July this year, the VAT change; the rates' waiver; the reopening grants and the range of other supports will buffer businesses and the economy as we move through the remainder of 2020 and into next year.

Section 8 amends the help-to-buy scheme to stimulate demand from first-time buyers for new houses in the housing market, to encourage house completions and to assist first-time buyers to accumulate a deposit for a new home. The support available to first-time buyers will be increased to the lesser of €30,000, an increase from the current level of €20,000; 10%, which is an increase from the current 5%, of the purchase price of a new home or self-build property; or the amount of income tax and DIRT paid in the four years before the purchase or self-build. The additional relief will be effective immediately and will apply to applicants who sign a contract for the purchase of a new house or make the first drawdown of the mortgage in the case of a self-build in the period 23 July to December 2020. This scheme is in operation as we speak, but we want to put it on a legislative basis. Receipt of the additional relief is not dependent on the completion being before 31 December. It will expire on 31 December 2020. All other parameters of the scheme will remain the same.

Section 9 provides for increases in the allowable expenditure under the cycle-to-work scheme in respect of e-bikes and bicycles. The allowable expenditure will be increased from €1,000 to €1,500 in respect of e-bikes and €1,250 in respect of regular bicycles. The scheme currently allows the purchase of a new bicycle every five years and this will be amended to every four years.

Section 10 provides for a new once-off income tax relief measure that will benefit self-employed individuals who were profitable in 2019 but, as a result of the Covid-19 pandemic, are loss-making in 2020, providing a much needed cash flow boost in the current year. An additional option for farmers in this context to step out of income averaging for the 2020 tax year is also being introduced, and should be welcomed. The estimated cost of this once-off proposal is €150 million in 2020.

Section 11 provides provide cash flow support to previously profitable companies that are experiencing losses as a result of public health measures. It allows companies to estimate their current year losses and to make an early claim to carry back 50% of that loss for offset against taxable profits of the prior year. This will generate an immediate tax refund of some or all of the corporation tax paid in the previous year. Under normal rules, this carry back would not take place until up to nine months after the end of the loss-making year, when tax returns are normally due for filing. As it is based on projections of the expected losses for the full accounting year, the carry back is limited to 50% of the estimated loss. The balance of the loss will be available for carry back in due course under normal rules, when accounts have been prepared by the companies at their year-end. The measure has no net cost in the medium term as it is an acceleration of a relief that exists in the corporation tax code. However, it will release €450 million of valuable liquidity in the current year to companies currently facing significant cash flow difficulties at a time when they need it most in the weeks and months ahead.

Section 12 provides that the standard rate of VAT will be decreased on a temporary basis from 23% to 21% for the period 1 September 2020 to 28 February 2021. It is estimated that this decrease will cost some €440 million in total - €160 million this year and €280 million next year.

The reduction is part of a number of stimulus measures to aid economic recovery in the short term and help ensure sustainable growth for the future. It cuts across a wide range of economic activity from the retail sector, the motor industry, as well as the hospitality sector and, as such, there is a broad range of types of businesses and traders who will benefit from this VAT reduction. A decrease in the 13.5% VAT rate, such as that provided for in the Jobs Initiative 2011, would have been more limited in its impact. This is a more broadly based measure. In the context of the prevailing public health advice and the restrictions necessitated by the social distancing rules and the shortage of overseas visitors, a reduction in the standard rate is the appropriate policy response on this occasion.

Section 13 is the final section and is another standard section relating the Short Title. There is no commencement provision and the Bill will become effective on enactment and signature by the President.

This is a relatively short Bill but it is a crucial element of the next phase of the Government's response to the Covid-19 crisis. It sets out the fiscal measures that will enable the economy to recover and emerge from the period when the economy was shut down.

The people have shown remarkable resilience throughout the crisis and now businesses are reopening and taking employees back onto their books but those businesses continue to need our support. The measures in this Bill will assist in that process and supplement the other measures the Government has taken to support businesses. It introduces new support measures and adapts existing ones to meet the needs of our people and our economy as we continue to make progress in restricting the impact of the disease, reopen our country and help businesses recover and begin to prosper again. They are far-reaching measures involving Exchequer support but necessary for the crisis we are addressing. I commend the Bill to the House.

I welcome the Minister of State to the House. I was wondering how I would address this Bill so I will speak from my personal experience as somebody who is in business and currently going through this process. The tourism sector has faced many challenges over a number of decades. The big one we all remember was in 1969 when the Troubles in the North started. They had a seismic impact on the overseas market in Ireland because it more or less shut down overnight. It took us nearly 20 years, until the Good Friday Agreement, to move on from that.

The other crisis that had a brief impact was the foot and mouth disease in 2001. In between, we had several recessions and other issues to deal with but this is the first time ever in our family's lifetime in business that an issue has shut us down. Covid-19 has brought our business, and the entire tourism sector, almost to a standstill for four months. It has nothing to do with the economic situation or anything like that. We could go back to the 1970s when VAT was introduced. My father was paying nearly 22% or 23% in overdraft rates and it was almost impossible to do business. However, I believe we have learned from the troubles we faced in the past that we need to react to crises when they arise. I have to give credit where credit is due. The Government stood up with regard to supporting businesses affected by Covid-19. Without the assistance we have received from the Government to date, we would not have been in a position to stay in business and we would definitely not have been in a position to reopen our doors a little over a month ago.

A key pillar in all of that support was the TWSS. Senator D'Arcy, who was here with me last week, said that we need to drop the "T". The Minister of State may have had inside information that the rest of us did not have but the "T" is gone and it is now the EWSS. That has to be welcomed because that is the foundation allowing businesses across Ireland reopen their doors. To have it as a guarantee for the next six months is a great incentive for us to keep going and it gives us hope that we can get beyond the current situation. I will address that on Committee Stage. I have a specific issue about the scheme but, overall, it is the key measure that has allowed us open our doors and it has to be welcomed by all Members.

I also welcome other tax measures in the Bill. I am looking forward to seeing how the stay and spend measure will work. I welcome that it is targeted at the off season because we all know that once the children return to school the tourism industry will suffer drastically as we have nothing to fill that void that was the international market. This is targeted from 1 October and I hope it will generate over and above spending that would not have happened at the time.

Equally, I hope that the Revenue has this famous "app" available, which I am interested in, and that we will not be hanging around waiting for its development because that is the direction we are going in. It will be great to see how incentive schemes like that one can work through modern technology because that will open the door to us targeting specific credits into the future.

I refer to the creative thinking around the corporation tax losses, which is no cost to the State but allows a company that operated at a profit but will not operate at a profit this year to offset those losses against last year's profits. As the Minister of State said, that is a direct cash injection into the business and it has to be welcomed.

The upgrade of the restart grant to €25,000 is a help. The waiving of commercial rates for another three months is welcome also.

These are very welcome measures that address the short-term problem but for the October economic statement we need to address some of the medium and long-term impacts being faced by the tourism sector.

The reduction in VAT is welcome. My own sector is disappointed that the tourism sector was not included in that. Senator D'Arcy might have a different viewpoint from me on that. I do not believe the sector is viewing the VAT reduction on this occasion as a stimulus package. We are looking at it as a survival method that allows us increase our margin to the bottom line. It is probably a measure that will be needed when the EWSS is withdrawn and the extra money in respect of the restart grant is no longer available.

We need to look honestly at what is happening across Europe. Some 28 countries in Europe have a lower VAT rate than Ireland. Our neighbour, the UK, dropped its rate to 5%. That was our largest overseas market in the tourism sector. It has now experienced two hits. When Brexit was announced, sterling dropped by 15%. That made the UK market 15% more attractive than Ireland and we offer a very similar product. It has now dropped the VAT rate by 8.5%. We need to address that moving forward. I am aware Sinn Féin has a motion on that later, and I will probably speak on the issue again.

The industry needs to unite now across all sectors, not just pubs, hotels and restaurants. The tourism industry goes way beyond that and has a major impact.

We need to come together and make the case to the Minister in respect of the October statement. We must emphasise how important that VAT reduction is for the sustainability, viability and competitiveness of our industry in the future. The €10,000 increase in the help-to-buy scheme is welcome. It is to be hoped it will re-energise the construction market until Christmas.

I have addressed most of my issues at this stage so I will leave it at that. I will come back in when I have the opportunity on Committee Stage.

I thank the Minister of State for coming in. Today we are discussing a stimulus of between €7 billion and €7.5 billion. It is important for people to understand that each stimulus is subject to a timetable. It will either work or not, within that timetable. If it does not work, that means the money has run out and that we have not got back to a degree of normality.

On the last occasion I spoke here, I spoke about what was happening across the Atlantic, in the US. I spoke about the funding with which that jurisdiction was underpinning itself. Some $9 trillion is already committed and another $3 trillion may potentially be committed. To put that into context, this is more than 50% of its GDP. That is the scale of stimulus the US is committing. If, however, one looks at its position and why it is talking about additional stimulus, it is because it is still shedding jobs. The money that has been put in and the credit that has been made available has been used and it has still not had an impact on employment. The success of a stimulus is measured by whether it gets people back to work.

What has happened? The money has been used, the stimulus has been spent and still businesses need to cut costs. As Senator Casey will know, the biggest expense for most businesses is employees. That is what is happening. We have to be really careful and understand. The first portion of the stimulus was announced by the previous Administration. The follow-on announced by this Administration is very welcome. The Minister, Deputy Foley, announced funding for reopening of schools which, at €375 million, is a small amount of money compared with this. There will also be a third aspect, budget 2021. It is only ten or 12 weeks away. That will be the stimulus for 2021.

In response to Senator Casey, while it does have to go, the employment wage subsidy scheme will have to be extended beyond the dates currently committed to in budget 2021 because I do not see us getting out the door with regard to the pandemic and the virus without a safe vaccination programme being rolled out. As I have said on each occasion I have spoken, the virus will determine how long the stimulus will have to continue. There is no way around that.

We also have to be careful. I was hugely disappointed to hear Opposition parties calling this package miserly. That is incorrect language to use about the largest expenditure of funds in any one tranche by this State. To put it in the context of our European partners, we will have the second highest spend per capita in Europe. I say to the Sinn Féin Senators that this is not miserly. Sinn Féin is of the philosophy that it should knock and beat up everything to encourage as much bad publicity as possible. That is the wrong thing to do at a time of national emergency. It shows that Sinn Féin is not concerned with doing the right thing for Ireland, its people or its economy. Its Senators should reflect upon that.

There are also challenges with regard to the markets. People have said that the markets are solid and robust. Unfortunately, the markets are always robust until they are not. People can see what happens when they are not. Sentiment has an impact and a great deal of value can be wiped out over days or weeks, let alone months. The challenge facing the markets will depend on the virus and whether we listen to our experts, as we have done. The manipulations of populists will not manipulate the virus. The virus will continue to move. If we listen to the experts, as we have, we will get on top of this, as we have. The jurisdictions over the water on each side of us, both Britain and the US, have not done as well as we have. We have listened to our experts and we are on top of it.

I do not want to go through each aspect of the package and each amount committed but I welcome the taxation measures, to the value of €1 billion. I also welcome the rates waiver, which is essential. The cash flow of businesses has been greatly impacted. I speak to hoteliers in my county and some of their rates bills are €500,000 or €600,000 a year. That is not payable and will not be payable. The speeding up of capital works is very welcome.

I will raise a point on the credit guarantee scheme. It relates to the Strategic Banking Corporation of Ireland and investors participating in a business. Affairs analyses are being requested of investors in businesses. That will not wash. People will not give a detailed statement of all of their affairs just because they invest a sum of money in a business. I ask the Minister of State for clarity on that point. Will he ask his officials for a clear statement as to whether that is the case? It will not fly to ask investors for a statement of affairs listing everything they own.

The 2% reduction in the VAT rate. I do not want to be at odds with anyone else but there is a question as to how to best use this €440 million for the Irish economy. We may not fully agree but I believe reducing the 23% VAT rate to 21% is the right approach as every sector will benefit. I am easy as to how individual businesses choose to deal with the reduction. They may need to put that 2% back into their businesses. They may not pass on the 2% cut because the cash flow challenges are enormous.

I will also raise an aspect of the employment wage subsidy scheme, which will be crucial. Is the owner of a business allowed to claim the subsidy and to benefit from that money? In my experience of the owners of businesses, particularly the various types of SMEs, they tend to forego their salaries to keep their businesses going. It would be a mistake not to allow the owners of businesses to get the benefit of this scheme. I am also told that family members of owners are not allowed to claim the subsidy. It is important to have clarity on that matter because such a restriction would be a mistake.

My time is nearly up. We are looking at a €30 billion deficit for 2020. To put that into context, it is approximately equivalent to the total net amount given to the banking sector during the last crisis. That is the deficit for one year. I know we cannot say where we will be next year but we have to start thinking about it now. The deficit will be €30 billion or more this year. We need an indication of the sort of deficit we will run in 2021. If these schemes are not extended and if we do not continue to put capital into businesses to protect jobs, it will be irrelevant. I will finish where I started. There is a schedule for each stimulus measure. We have to continue with them because, if we do not, we may go from a recession to a depression. Nobody wants that.

It is nice to see the Cathaoirleach Gníomhach in the Chair. The Minister of State is very welcome.

I will have to start by responding to my colleague, Senator D’Arcy. There is no problem with back-and-forth with the Senator but I ask him to try at least to be factual. There are many aspects of this Bill that we are on record as supporting. To characterise us-----

The Senator’s party leader said last night that it was miserly.

I will explain that, because I agree with her. The Senator however, needs to stick to his facts. To say that we rejected every aspect of this Bill, which he did-----

I did not, Senator.

Excuse me, Senator, I did not say that.

You did and you were very clear. I know that it has been a bad week for Fine Gael and indeed Fianna Fáil.

I did not say that.

I am saying that it has been a bad week for Fine Gael.

The Senator can check the record of what I said earlier.

Can we allow Senator Gavan to speak, please?

I know that the Cathaoirleach will give me some extra time, for which I thank him. On this Bill, we welcome the warehousing of tax liabilities, the reduction of interest rates applying to tax debt, and corporate tax loss relief in these circumstances, but I will highlight a few concerns we have around the Bill.

The temporary VAT rate reduction from 23% to 21% is of course supported by us. More needs to be done. Echoing some of the comments of Senator Casey, the issue of a VAT reduction for hospitality and tourism should have been addressed at this time. The stay-and-spend initiative or tax credit will exclude one third of earners in the State. As the Minister of State will know, we proposed a voucher scheme on this. I will have more to say on this as I go through this speech.

The enhancement of the help-to-buy scheme and the increase of the quantum of claims is a measure that we will oppose on the grounds that it will drive up house prices and exclude the majority of first-time buyers. Again, I will expand on that particular point later.

On the introduction of the employment wage subsidy scheme which will replace the temporary wage subsidy scheme from 1 September, with both schemes running parallel from the 31 July to 31 August, we are saying that the temporary wage subsidy scheme needs to be extended further because we know that the new scheme is not worth as much. I will give a concrete example of this. Ballyliffen Golf Club up in the Inishowen Peninsula is a community-led club. It employs 25 to 40 people and brings a significant amount of tourism into that area. The club has said that because it is a sports business, it will only be eligible for a €4,000 grant under the restart grant scheme despite paying more than €10,000 in rates. As the Minister of State will be aware, we have advocated larger grants.

The wage subsidy scheme is ending at the end of August and we are arguing that it should be extended to the end of October for the highly impacted sectors like hospitality and tourism. This golf club has made it clear to us that the end of the wage subsidy scheme will make its business unviable. This is a very concrete example of where this particular Bill does not go far enough. This does not make any sense. We have all been speaking to people in the hospitality sector and know how bad things are. Reducing these subsidies this early is a mistake. I make no apologies for saying that.

We are also concerned about the subsidy for workers earning less than €151 per week, namely, the fact that there is not one. We have submitted an amendment on this which, unfortunately, has been ruled out of order and which proposed the continuing of the 85% subsidy for these low-paid workers. We are concerned that this would provide a perverse incentive for employers to increase hours artificially to avail of the €151 payments to cover all wage costs.

I will spend a number of minutes discussing the stay-and-spend initiative. The purpose of this scheme is to incentivise taxpayers to support registered accredited providers of accommodation or food or both during the off-season. There are several flaws in this initiative. The Government basically adopted Sinn Féin policy and then made it as regressive as possible. There is a pattern there, as we know from what has happened with the airports over recent days. The Minister of State said that 2.8 million people will be able to avail of the stay-and-spend initiative. I ask him to address this point in his response because he is wrong in this claim. According to the Department of Finance’s own ready reckoner for budget 2021, 715,600 people are taxpayer units who pay neither income tax nor USC. Some 29% of taxpayer units then will be ineligible for the stay-and-spend tax rebate. Considering individuals who are not taxpayers, which also includes couples, and the increased level of unemployment resulting from Covid-19, this figure is actually likely to be higher. The rebate will be received in 2021 for 2020 claims and in 2022 for 2021 claims, providing a reduced incentive for claimants. The rebate will only be available for spending from October, which will miss the summer months. There are a whole series of issues there where the Government could have made the scheme much more effective and we need to hear why the Government is choosing to exclude so many people in this way. It would have been much better to go with a voucher scheme

I also want to address section 8 on the enhanced help-to-buy scheme. We will be opposing this section on the following grounds. No impact assessment has been conducted on the effect of this policy change on house prices, as confirmed by Department officials. This is policy on the hoof and a cash cow for investors. Lorcan Sirr, senior lecturer in housing policy at Technological University Dublin, questioned the timing of the move. He said: "The timing of this, which will stimulate demand when supply is being reduced, will likely lead to rising prices for the homes that do come on the market." Instead of reducing house prices, this will cement the pricing behaviours of developers who have no incentive to reduce house prices. It seems like the old relationship between Fianna Fáil, in particular, and developers is alive and well.

In 2019 the Parliamentary Budget Office published a stinging report on the help-to-buy scheme. The report found that the scheme had been disproportionately availed of by higher income earners. It has been largely out of reach for the vast majority of first-time buyers. The majority of help-to-buy purchases have been above the average price. Given the mortgage lending rules, this means that the scheme has largely benefited high-income earners rather than low and middle-income earners. Only 13% of sales through the scheme were for properties costing less than €225,000. That is not an affordable housing scheme. Furthermore, over 40% who use the scheme already had a 10% deposit and did not need it, while it failed to help the majority people trying to get on the property ladder. These changes to the help-to buy-scheme, which will cost €18 million, are likely to increase property prices and damage the majority of first-time buyers who will not be eligible for this scheme. This is all being conducted without the carrying out of an impact assessment. This is just poor.

I have spoken briefly about the reduction in VAT which we welcome, but we know that it is just not going to be enough for the hospitality sector. The argument that Senator D’Arcy seems to be making is that this is something that could be addressed in the upcoming budget. That is too late because it should have been addressed now.

A further point on VAT, where the Minister of State will see an amendment from us, is that we are calling for a report on the impact of the VAT cuts on issues like the sale of motor cars and the cuts to fuels and heavy oils. It is surprising to see a Green Party signing up to these type of cuts to VAT. I always thought that this party was against the use of these fuels, yet it seems to have signed up to this without at the very least asking for a report on what the impact will be. The good news is that we have an amendment here which we hope all the Members will support and which simply asks for a report on this in five months to see what the actual impact will be of the reduction of those rates.

Basically, we are going to support this Bill but will oppose section 8. In the context of the crisis that our country is facing, particularly in the hospitality sector and small and in medium-sized businesses, I agree with my party leader that the Bill is miserly and is clearly not enough. We will find in the months to come that much more will be needed to be done that could have been done today.

I welcome the Minister of State to the House and the opportunity to speak on this important Bill for the financial or July stimulus package which, as we all know, seeks to address the enormous challenge that is confronting our society and economy at present. We all appreciate the enormous scale of that challenge, and those of us on the Opposition benches speak in the spirit of being constructive from Opposition in seeking to ensure that we will be able to get through the crisis as a country.

Having said that, and notwithstanding that I will be welcoming aspects of this Bill and appreciate, as my colleague Deputy Nash has stated in the Dáil, the necessity for many of the measures in it, it is, as far as we are concerned, a missed opportunity. It could have gone much further and could and should have been used to build a far more solid basis for a recovery in our view. I will elaborate a little on that point. Deputy Nash summed up this point in the Dáil that the fundamental problem we have with some of the aspects of it is that it gives cash without conditions to those least in need. Conditions could and should have been put on some of the measures to ensure that we had built a better basis for a recovery.

I was taken with an article by Dr. Shana Cohen from the Think-tank for Action on Social Change, TASC, in which she stated that we should have built a stimulus package under the slogan "Build Back Better" to ensure public services are adequately funded into the future. In that same spirit, in the run-up to the announcement of this package, we in the Labour Party put forward an alternative proposal for a stimulus package that would have invested not €7 billion but €10 billion in recovery. It would have gone further in ensuring better access to public services and would have met our five tests, which the Government stimulus does not meet. Those tests are as follows: first, the stimulus must be big enough to counteract the negative impact of Covid-19 and Brexit on jobs, businesses and household finances; second, it must be directed at the creation of good-quality jobs, especially for younger workers, as we are all conscious of the particular hit that has been taken by younger generations; third, the goal must be to create a new economic model, based on life-long learning, caring and sustainability; fourth, stimulus measures must reduce economic inequality; and fifth, it must strengthen public services, including a single-tier public health system, a safe return to school in late August or early September, which we hope to see, and major investment in public housing and public childcare.

I will focus on childcare in particular as a measure of how this stimulus package could have done better. I will be constructive, and I welcome, as did Deputy Nash, a number of the measures in this Bill. Many of us appreciate the extension of the temporary wage subsidy scheme, TWSS, and its replacement with the new employment wage subsidy scheme, EWSS, to ensure businesses will be sustainable. I welcome that the turnover rule has been waived for childcare providers, which the Minister of State mentioned in his speech. We welcome the announcement of a major training and upskilling programme, although it falls short of our call to treble investment in skills. We also welcome the cut in the standard rate of VAT and provision for investment in town centres and cycling infrastructure.

As I have said, this Bill could and should have gone much further to ensure a robust basis for the recovery we want to see, with investment in public services, in particular. I will focus on childcare as an illustration of how the Government could have done better and ensured we would build back better. As the Labour Party spokesperson on children and childcare, I have already been contacted by a number of parents about widespread issues. They are concerned about increases in fees, being charged a deposit to hold a place for children who have not yet even taken up a place in childcare, and crèches that have closed. Parents are very anxious and distressed about trying to find childcare provision in the autumn when it is hoped we will see a more widespread return to work. The provision of adequate childcare is a crucial and defining test for this Government. Unfortunately, over recent weeks it has floundered around and tampered with the margins of childcare. Very welcome funding is being provided, but no attempt is being made to address the basic problem with the system of childcare, which is that it is based on a private provider, laissez-faire model and that central government has failed over decades to take any responsibility for childcare provision on a universal basis.

In the dim and distant past of January when we were facing into the general election in a very different climate, the Labour Party manifesto called for a move to a universal public childcare system. We recognised that there are 300,000 children of preschool age in this country, two thirds of whom, prior to the pandemic, were in some form of childcare, though it was all largely done on an ad hoc basis. I pay tribute to the former Minister for Children and Youth Affairs, Katherine Zappone, who sought to introduce a more streamlined system. From talking to experts in the area and front-line providers, and as a parent and former user of childcare services, the problem remains that we do not have joined-up thinking across the Government and we do not have the sort of investment we need to change the model of childcare. I raised queries with the new Minister, Deputy O'Gorman, about cost of childcare, deposits, and crèche closures and his response was that services are requested to avoid charging or increasing fees and deposits. There is no sense of the Government taking responsibility for the provision of childcare, which we need to ensure that parents can get back to work properly and that children have access to the services they need.

Staff in the sector should also be adequately paid and have decent conditions. SIPTU recently produced research based on a survey of childcare workers showing just how precarious and low-paid the sector is for those who work within it. I am conscious that the Department of Children and Youth Affairs has announced funding, which it claims totals about €300 million, for the various measures being put in place to support childcare providers in reopening, but that is simply not good enough. I recognise that providers are struggling and are doing their best to ensure there is a service available for parents, but parents, staff in the sector and, most important, children are being let down by the failure to emphasise childcare and to review and revise this area radically. I will continue to press that point.

I will raise a number of other points on this Bill, though I am aware we will be addressing them more on Committee Stage and we have tabled some amendments on these matters. A specific issue has been raised with us regarding section 2, which amends Part 7 of the Emergency Measures in the Public Interest (Covid-19) Act 2020. A new subsection, 28B, is provided for in respect of the new EWSS. A number of directors of small arts companies have raised concerns with me as they had been eligible under the TWSS but the new provision will exclude proprietary directors. This is going to be a major change and will have a serious impact on individuals. Can this issue be addressed?

Section 9 increases the subsidy for bicycles. As a lifelong cyclist on the cycle to work scheme, which I support, I have been pressing for many years for a bike to school scheme with similar subsidies for children. We need to ensure that children have access to bikes and are encouraged to cycle. It should be a big part of a radical review of the way in which we run public services and our society. That is a missed opportunity in this Bill. We welcome the stimulus but it does not go far enough.

I thank the Minister of State for giving us his time today, which I am sure is very precious with all that is going on. I welcome the employment wage subsidy being extended to March 2021. That is important. The stay and spend incentive is brilliant overall and it is very positive that people can get 20% back on their spending, even if they spend only €25.

The cycle to work initiative has already proved fruitful over recent years. It is important that the grant has been raised but I want to say two things on it. First, it is important that we include farmers in the scheme because they have not been included up to now and I have had several phone calls from farmers who could use a cargo bike, regular bike or electric bike to go to their work around the land and care for cattle, carry food and so on. It would be nice if the Government could include farmers in that scheme. Second, while it is important that we have raised the amount of money one can get on the scheme, it should not be seen as a target. One can get a very good bike for €300 or €400. Some people seem to think that because the grant is there for €1,000 or €1,500, they have to spend it all. That is not the case. It is an upper limit, not a target. We will be working on the bike to school scheme with the Department, which is trying its best and has to prioritise. One cannot get everything in in the first go, but that is something I have been working on for a while and I wanted to let Senator Bacik know that.

The new enhanced and accelerated income tax relief for losses incurred by the self-employed is also important. We have many big companies, but in rural Ireland it is all self-employed people. It is massive for them to see we are supporting them and it also applies to farmers, which is a good thing for many rural areas. The Government is under a lot of pressure. We can all pick holes, but considering the pressure the Government is under and that this is an emergency, this is a good Bill and I strongly support it. It is easy to pick holes in things but we are all doing our best. My colleague, Senator Gavan, should not worry about the Green Party. I will take care of it and he can just worry about Sinn Féin.

I raised a couple of points on this matter when the Minister came before the House a couple of weeks ago. I want to keep my points brief as I have only about five and a half minutes. The first point I wish to raise concerns the help to buy scheme. I can talk about this because it affects my generation. I am 29 years of age. I cannot speak for Senator Gavan, but so many of my friends and people of my age bracket have benefited massively from the help to buy scheme since 2017. I remember when the help to buy scheme was introduced in 2017, when I worked as a member of staff in this House. The same things were said then; that it would drive up prices, freeze people out of the market and be of no use in the first place. In the past three years there has been no empirical data whatsoever to suggest that was true. Now that we are increasing the value of the scheme by €10,000 to €30,000, it will help even more people of my generation to get on the property ladder for the first time. In the past three years it has provided this assistance to 19,000 people.

By way of constructive criticism of the scheme, I would like to see flexibility around the 70%. As I left Dundalk this morning and drove to this House to speak in this debate, I spoke with a friend of mine, a man named Peter. Peter and his wife fall through the legislative cracks in the help to buy scheme. I bring up this constructively because I think we can look into this in the future. Peter and his wife are looking to buy a new build in Blackrock, just outside Dundalk in County Louth. At the moment that three-bed end-of-terrace house costs €225,000. They are on a single income because Peter's wife has been sick for the past 18 months. She is a qualified secondary school teacher but she suffers from vestibular migraines causing dizziness and vertigo. She will not be able to go back to work for the time being. Peter is in permanent employment in Dundalk. They were approved for a mortgage of €152,000.

The rules of the help to buy scheme state that the loan-to-value ratio of the mortgage must be higher than 70%. In this case that figure is 65%, so Peter and his wife are unable to qualify. I fully understand that the 70% minimum is there to stop people who can afford to buy a house outright from partaking in the scheme. I absolutely accept that. However, the case I have raised shows we could allow more flexibility around the 70% rule. Peter and his wife are not able to buy their house outright. As he said to me in the car this morning, he does not expect things to change at this time. He asked me to convey to the House that if we ever look at this again, the scheme should be slightly more flexible towards individuals who come close to the 70%. Deloitte recently highlighted a case which went to the Tax Appeals Commission. The loan-to-value ratio in that case was found to be 69.89% and relief was denied. This is intended as constructive criticism. I wish to point out some of the cracks in the legislation through which people can fall.

I would also like to discuss a topic I raised with the Minister two or three weeks ago when she came to the House to discuss the temporary Covid-19 wage subsidy scheme. I raised the case of a family who switched accountants at the beginning of the year and were not on the pay as you earn, PAYE, system on 29 February. They were paid their whole wage on the tenth week. They were in employment throughout the pandemic, but the legislation was quite clear and they were not able to qualify. They will be able to qualify for the scheme now because we have removed some of the restrictions to make it easier. While that is very welcome news for that family business, it is marginally unfair that they were unable to claim the payment previously and there is no way for them to claim compensation at a later stage.

In my last 60 seconds I would like to raise employer's pay-related social insurance, PRSI, contributions. A rate of 0.5% will continue to apply to employers who are eligible for the subsidy. As I am sure the Minister will agree, that represents a considerable saving for the employer, in addition to the subsidy paid for each employee. That amounts to 11.05% on a full wage.

I will conclude by saying that my colleague, Senator D'Arcy, is absolutely correct. This is the most generous scheme of subsidies since the foundation of the State. It cannot be sniffed at. I respect constructive criticism. In my six years in local politics and in this House I have been willing to work with everyone on both sides of the House. However, I do not accept opposition for opposition's sake. Unfortunately in my very brief time in this House and on the national stage, it has seemed that such opposition is the norm and not the exception.

Senator Keogan missed her slot. I will give her the eight minutes to which she is entitled and then call on Senator Dooley.

I will just need a minute. I am certainly not here to tear down the Financial Provisions (Covid-19) (No. 2) Bill 2020. I welcome the measures the Government has taken and I wish only to add something constructive that perhaps should have been included. Section 8 amends the help to buy scheme, but it applies to only new homes. I would like that to apply to second-hand homes. That is my only criticism of this Bill. The Government has failed to address this. People might want to buy a second-hand home rather than a new one.

I thank the Minister for coming to the House to discuss this unprecedented set of measures which none of us would have expected to be necessary. At a time like this it is right and appropriate for the State to invest taxpayers' money to shore up our economy and to keep our people safe during the pandemic.

The Minister will be aware that the tourism sector is the sector most affected by the pandemic crisis. This is clear to all. We normally welcome 11 million tourists in a year. This year we will see virtually none. There are several facilities in my constituency that fall under the auspices of the Shannon Group, namely, Bunratty Castle and Folk Park and King John's Castle. The Shannon Group now proposes to close these attractions at the end of August. It is seeking some money from the State to keep them open. I hope the Minister's Department can find the money to ensure these businesses remain open during the winter period, albeit with fewer tourists visiting. We must try to drive some domestic tourism to the region. That market is there. The fact that people will not be leaving the State in the summer period means they will take shorter breaks throughout the autumn.

Some of the microenterprises in the tourism sector also need support. We must ensure that bed and breakfasts are not excluded from the Covid-19 restart grant just because they are not registered with Bord Fáilte. That is really important and I hope the Minister can resolve that for us.

I also refer to pony treks, jarveys and carriage rides. I am thinking of a particular business run by Mr. Sean Kilkenny in and around the grounds of Dromoland Castle. He receives the temporary Covid-19 payment of €350, which goes some way to assist him and his family but certainly does not cover the cost of feeding 40 horses through the winter. Because the business is paying rent and not rates, it previously did not qualify for the Covid-19 restart grant. It is important that the Government is flexible, as my colleague said about other areas. These businesses need flexibility to ensure they remain in operation through the winter period and are ready to take advantage when American tourists come back to the market.

We must also invest in infrastructure. One piece of infrastructure is being supported and purchased by the local authority in my constituency, namely, Holy Island or Inis Cealtra. It is a fantastic monastic settlement which will be a very considerable part of the local tourist trail. This is a tourist attraction that can be built upon. It is really important that facilities like that get the support of the Government and get the investment necessary to turn them into world-class tourist attractions. Work can be done during this period when tourism is at a low ebb so the industry is ready to take advantage when international travel starts again.

The Government should also invest very considerably in the basic infrastructure of our villages and towns. In the constituency I know best, County Clare, there are four villages that have absolutely no Irish Water assets but suffer from a sewerage problem. In many cases untreated sewage is flushed into rivers or the sea.

The villages in question are Broadford, Cooraclare, Doolin and Carrigaholt. We need the Government to use this time to invest in shovel-ready projects. The projects in at least two of those villages are shovel-ready.

I hope the Minister of State, through his Department and the Department of Public Expenditure and Reform, will ensure that recognition is given to the importance of keeping people in employment, particularly in the construction sector, at this difficult time, while also getting real value for our money. As the Minister of State well knows, the State can borrow money on the markets at a negative interest rate. Investment in the basic infrastructure of villages and towns will generate significant returns. It will help to facilitate people who wish to move back to such villages and towns from cities. As a result of the significantly increased uptake of remote working opportunities, many people wish to get out of cities and return to rural areas. There is an opportunity to address and rectify the imbalance in development. Doing so would allow people to move from the east coast to the west and that would benefit all areas, including the schools and communities of rural villages and towns. It would also relieve some of the enormous pressure on the east coast, and Dublin in particular, where the continual population growth in recent years has put significant pressure on the water, sewerage and road infrastructure. I appeal to the Minister of State, who I know has a very good understanding of rural and urban Ireland, to give consideration to projects that can help to relieve the pressure on those large urban areas.

I thank the Minister for coming to the Chamber and outlining the Bill. I am very supportive of it and, of course, the July jobs stimulus which offers a range of supports including the €2 billion credit guarantee scheme which was discussed previously in the House, as well as €5.4 billion in direct expenditure, taxation measures and grants. The Bill is mainly focused on tax liabilities and tax measures, but it also provides for the employment wage subsidy scheme which follows on from the temporary wage subsidy scheme that has become the foundation stone of business supports according to employers. It gives direct financial support to companies to help them to pay wages and to keep the business going. It provides stability and reassurance to workers and families that they will be able to pay their bills and keep their lives going as normally as possible unless, it seems, the person is with a particular bank and trying to draw down mortgage approval. The people in danger of getting stuck in this situation may be prevented from buying their first home, moving out of their parents' house or rental accommodation, or moving into more suitable accommodation that may have a garden or space for a home office. Many families are currently considering such a move. The people affected may be prevented from getting on with their lives until April 2021. Members are aware of the knock-on potential that would have in respect of housing supply, construction and jobs. Freezing so many people out of the market would effectively freeze housing supply.

I received a worrying email from a couple who are constituents of mine. Their base salaries are €71,000 and €84,000 and they were approved in principle for mortgage. They have substantial equity from the sale of their home. Only one of their salaries is supported by the TWSS. They have been in their current jobs for two and three years, respectively, and have never missed a mortgage repayment. They both received pay rises in the past six months. The company turnover has taken a hit but it is stable and there have not been any redundancies or pay cuts. They received an email from their bank on 14 July. It stated that their approval in principle was provided on the basis that at the time the couple draw down the mortgage, no applicant would be relying on Government subsidy income or temporary income support related to Covid-19. I know the Department of the Minister of State has received assurances that such practices are not taking place, but they are happening. They are affecting this couple and other families, including people whose full loan offers have been withdrawn. Senators are aware of the stress and consequences that come with such decisions. I ask the Minister of State to take another look at that situation because it is not good for the couple to whom I referred or for anyone else.

I will speak briefly as my colleagues have made the relevant and important points I was going to raise. Senator Currie raised very important points and I wish to acknowledge that the situation to which she referred is an issue for some people.

I have received good reactions to the July stimulus initiative, including from small businesses. People need the support and help it will provide. I am sure the Minister of State has noticed in his constituency that small businesses are resolute about surviving and getting out of the current situation. They have great fight and enthusiasm and other Irish qualities.

The next couple of months will be of great importance. If one walks the streets of Dublin, one will see how quiet they are compared with the city streets in most summers. That is also the case in rural areas. Tourists and others will not be coming to these places. I looked up some facts regarding my county and the wider rural areas of counties Roscommon, Leitrim and Galway. In 2018, tourism was worth approximately €30 million to the area. That is a phenomenal amount. The figure does not include Galway city but, rather, just the rural areas. In recent years, the phenomenon of tourism in those counties has been extremely important in the context of employment. This is the time to put more money into promoting outdoor facilities such as hill walking, parks, boating on the River Shannon, Lough Erne or elsewhere. All such outdoor attractions should be promoted more and receive more funding because it is crucial that small businesses in the sector can avail of as much custom as possible in the coming months. It is to be hoped that people who visit an area to hill walk or visit an attraction such as Lough Key in County Roscommon, Arigna Mining Experience, Sliabh Bawn or Strokestown Park House will stay in a hotel in the area or go to a restaurant there. We must redouble our efforts in the next eight to ten weeks to ensure every possible support is provided to attract much-needed business to those areas.

I welcome the Minister of State and the Bill, which gives effect to many of the measures published in the July stimulus initiative. The stimulus involves a €7.4 billion investment in our economy and society and is vital to our efforts to combat the unprecedented pervasive impact of Covid-19. It is only possible because the previous Government's management of the economy means the State is seen as worthy of lending by investors. It is important to make that point because not everyone appreciates it. If we had pursued some of the things that were urged on previous Governments, we would not be able to avail of this money from Europe and elsewhere.

The stimulus is about protecting existing jobs, creating new jobs and supporting businesses, organisations, people and communities across the country. For example, the restart grant continues to help businesses to reopen and to adapt to the new public health necessities. I am very encouraged by the uptake of the grant in counties Galway and Mayo, where some €8.87 million and €4.76 million, respectively, have been allocated in direct payments to businesses.

There are several strategically important initiatives which will be introduced or expanded by the legislation, including the TWSS. The scheme continues to be crucial in protecting jobs and keeping people in work, although not necessarily physically in the workplace. As with all measures and programmes introduced quickly, there have been a small number of issues with the TWSS. I am pleased that section 2 of the Bill will address those issues. For example, a scheme will be available to workers who had been absent due to illness, maternity, apprenticeships or training courses, which is welcome. The Bill introduces the successor to the TWSS, that is, the employment wage subsidy scheme which will come into effect in September. The new scheme will provide a flat rate subsidy of €203 per week to employers for each team member and will be open to all businesses that have experienced a drop in turnover of at least 30%.

Crucially for several sectors such as tourism and hospitality, the new scheme will include seasonal staff. I cannot stress how important this is for thousands of businesses in the west of Ireland. The shock to the economy that Covid-19 represents could, without action, cause lasting damage and detrimentally impact some workers who may leave the workforce permanently. We have a duty to do all that is possible to avoid this.

One concern that has been raised with me regarding the employment wage subsidy scheme is the reference period for determining eligibility for the scheme. The impact on turnover is calculated by comparing July to December 2020 with July to December 2019 as per section 2 of the Bill, which amends section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020. I appreciate the need for a reference period so the scheme can be properly introduced but the omission of the first half of 2020 would appear odd. Some businesses, particularly in tourism and hospitality, have contacted me and expressed concerns that they will not be able to access the wage subsidy scheme as a result. I would be grateful if the Minister of State could clarify this and explain the rationale for the reference period that has been chosen.

Section 7 will have a positive impact on communities. It introduces the stay and spend initiative, a €270 million boost to encourage and incentivise domestic tourism, which of course is our largest indigenous industry employing more than 260,000 people, almost three quarters of whom are employed outside Dublin. The stay and spend initiative will stimulate demand. Contrary to some reports, it will be available to all taxpayers to offset against USC or income tax, whichever is relevant. The one concern I have about this initiative is the timeframe of 1 October to 30 April. I suppose that is to stimulate demand in the off-peak period. There are some tourism businesses that will close for the winter period. Unless they can be guaranteed that there will be sufficient footfall, it may not be worthwhile in those cases. I certainly hope it will be. We need to make sure there is a marketing campaign for staycations and winter breaks. There are opportunities with some of the remote working hubs to have a combination of work and short breaks in many areas, particularly in the west and on the Wild Atlantic Way.

The provision of a reduced VAT rate from 23% to 21% at an estimated cost of €440 million is a measure I hope will benefit everybody. It will ensure that many businesses will survive and it will provide savings for customers if it is passed on. I am always slightly concerned by VAT reductions because we do not know if they will be passed on. I appreciate that it is an important lifeline for businesses that are struggling and have bills to pay. The measure has great potential notwithstanding the large cost. I refer to the initiative in 2011 made by the Government that came in at the height of the financial crisis when we had high levels of unemployment. That Government put in place initiatives to ensure we stimulated the hospitality and tourism sector, which did create jobs. I wish the Minister of State well in his role.

I welcome the opportunity to say a few words about the Financial Provisions (Covid-19) (No. 2) Bill 2020, which gives effect to the July stimulus package which we were all anxiously awaiting. In the main, we are happy with the 50 provisions that were put in place. This stimulus package is, of course, another step in the State response to the global pandemic emergency. It is most welcome that the State is investing in key projects and supporting workers and businesses on a historic scale. We look back over the past few months and assess where we have come from since 12 March, when the original announcement was made about schools closing. Many businesses took their own decisions before it was incumbent on them to close. It has had a significant impact on society and the health of our nation.

As legislators, we have to respond in appropriate ways. We have seen the impact on our health system and education with our schools closing. We have to acknowledge the difficult time this has been for workers in the health sector, those who have been bereaved during the Covid crisis and, of course, for business owners who have lost so much over the past few months. Some people are understandably concerned by the figures we have now and the increasing number of cases being reported on a daily basis. We cannot become unnerved by these figures. We have to promote confidence in terms of how we reopen our schools, businesses and economy. We have to ensure people are making the necessary arrangements from a health impact perspective. We have to be able to support the businesses we have. We know the struggle against Covid-19 will continue for some time. The economic fallout from the virus will likely long outlast the impacts of the virus itself. It is not just Ireland that has been hit but countries right across the world. That is why it is so important we have clear and effective legislation to support businesses and people throughout this turbulent time. We need to ensure the future financial viability of many businesses in Ireland is absolutely supported and that this does not pose a real threat to our long-term economic health. Small businesses around the country play highly significant roles in our economy, employing approximately 1 million people before the pandemic. Their impact on the success of our country is most important. We have to do everything we can. Some of the changes that have happened within our society will be reversed while some will not. The nature of work itself has changed and has proven to be more flexible and adaptable than we would have thought in terms of people working from home and maybe having a better work-life balance. Developing a flexible and innovative economy is really important.

I wish to say a few words about the nature of business within my own county of Kildare. We have a really strong record of small local business and our local enterprise office has been incredibly active. The agricultural and equine industry is also very important to Kildare. We have three racecourses and normally would have quite a number of events around them. It has been particularly difficult for event-driven industries. We need to do as much as we can with them. There are measures in this stimulus plan that will help support them and our local communities. Sports clubs that are rateable will be able to avail of €4,000 grants. That is really important. The investment we are going to have in outdoor recreation spaces will be important. Particularly in a town the size of Newbridge that has only one small playground, I look forward to seeing measures that will ensure we have playgrounds in place. We have learned many lessons and one of them is that having safe spaces of which people and families can avail close to where they live and work is critically important. I welcome the Bill and look forward to its implementation.

I welcome the Minister of State and congratulate him on his appointment. I wish to compliment the Government on the comprehensive range of financial proposals in the Bill. They are extremely welcome for all sectors, workers and businesses. I concur with Senator O'Loughlin's comment on the local enterprise offices. I compliment my own local enterprise office in Longford, where a lot of work is being done to support businesses through these difficult times. I will concentrate on a couple of elements of the stimulus. Section 8, which was mentioned by Senator Keogan, provides for increased relief in the help-to-buy scheme, up to €30,000 or 10% of the purchase price.

The reality in my county is that no houses have been built for sale in recent years. I completely agree with the comments made by previous speakers that the scheme should be available for any second-hand home purchases.

I ask that the Department of Public Expenditure and Reform look at this and all of the affordable schemes which are being discussed and which form part of the programme for Government. Previously, when we went to the Department looking for affordable housing schemes we were informed that we did not meet the criteria or fit with the ratio that obtained. The reality is that we do not have new houses for sale that people can avail of under a help-to-buy or an affordable housing scheme. I asked that we look at counties in a different way. It is not all in Dublin, Galway and the cities. We have a different situation on the ground and I ask that this be examined.

Tourism, as previous speakers indicated, was the first area to be hit as a result of the pandemic and will probably be the last to recover. I am the tourism spokesman for my party and I have a couple of queries. I fully welcome the schemes, one of which is the stay-and-spend tax scheme. The explanatory memorandum states:

Firstly, the provision of holiday accommodation, including accommodation in hotels, guest houses, B&Bs, self-catering accommodation, caravan and camping parks, and holiday camps. The property must be registered with Fáilte Ireland to qualify.

Unfortunately, any business that is not registered with Fáilte Ireland will not be eligible to participate. This was also the position in the case of the restart grant whereby accommodation providers that are not registered are not eligible to apply for that grant. I fully believe that providers should be registered with Fáilte Ireland. The company introduced its Welcome Standard in recent years to incentivise new providers to join and there is a wide range of supports available, but we need to look at the fact that we are knocking out a large number of businesses that would not be eligible to apply.

I also support the calls that to look at a reduction in VAT for the hospitality sector. We only need to look back to 2011 when this rebuilt the entire sector to the point it had reached prior to the onset of Covid-19. It is a multimillion euro industry, with huge numbers of people coming to the country. I ask also that this matter be examined. I again fully welcome and support this stimulus package and will be supporting the Bill.

I welcome the Minister of State back to the House. This is very important legislation. It is also important to note some of the remarks made by Senators Keogan and Carrigy - I will echo them - on the help to-buy-scheme and the concerns being expressed to the effect that second-hand houses or older houses are not included in the scheme. People who want to buy are coming to us and, as Senator Carrigy stated, there are no new houses available for them in particular places.

The one thing that we can accept with certainty is that there is a gargantuan challenge across the world that is being met. This, in turn, gives rise to a new challenge to our mindset, our attitudes and our thinking. If we are looking to reopen our economy, then we must consider how we will do things differently. I commend Cork Chamber of Commerce on their report this week on the sustainable Cork programme and the way in which Cork has changed and been challenged.

This Bill relates to the spending of €2.7 billion on an action plan for our country. If we can develop an action plan similar to the Action Plan for Jobs, then we will do a great deal of positive work. The important thing now is that we reimagine and recalibrate our economy and our society. I reiterate the point I made this morning - I know that many Senators will be tired of me saying this but I am the transport spokesperson for our party and am a Member from Cork - about Cork Airport. I do so in the context of the remarks made by Mr. Ray Gray of the DAA at the Special Committee on Covid-19 Response. Mr. Gray spoke about the need for a different funding approach in respect of Cork Airport. As the Minister of State is aware, the airport does not receive state aid or financial support, unlike other regional airports, because it has a self-funding model. That model has been impacted severely. Mr. Gray also stated that Cork Airport faces particular challenges. Can the Minister of State, together with his ministerial colleagues in the Departments of Finance and Public Expenditure and Reform, look at a way to ensure that Cork Airport will receive state aid through the regional airport capital funding programme, to which it must now be given access? We must be innovative in incentivising route development out of Cork and look at other models of business.

This week, Cork City Council produced its Re-imagining Cork City programme, which involves the creation of 14 pedestrianised streets to allow for al fresco dining. The weather may not be particularly welcoming in the context of such dining, but is it not extraordinary that it took a pandemic for us to change our attitude to street furniture in cities across the country? We have recalibrated our city and other towns and cities as well, which is wonderful. Some €2 million is being spent on cycling infrastructure to make our city centre people-friendly. I hope we can take that model and replicate it across the country in large towns. I was in west Cork last weekend and the open market in Schull was fantastic. I saw see people dining on the streets in Clonakilty and Baltimore, to name just two places.

A number of people have raised with me the issue of the employment wage subsidy scheme, EWSS, which, as Minister of State is aware, will replace the temporary wage subsidy scheme, TWSS, in September. I am not sure if the Minister of State will be clarifying this point or if such clarification is needed but, rightly or wrongly, I have been told that it would have an impact on proprietary directors who are also employees in their own businesses and are trying to obtain support under the TWSS currently. We are all conscious of the family-friendly businesses that are owned and provide jobs in a variety of different areas. If that is not correct, can the Minister of State the position when replying?

I congratulate all of those involved in developing the stimulus plan. We have already spoken about a number of issues. This is something that we need to drive on with and implement. We must ensure that there is no roadblock to or red tape in the context of the delivery of funds. As the Minister of State indicated, the people of Ireland have shown great resilience. We have introduced new measures and I commend the Government on these. Let us just get the job done now.

I thank the Cathaoirleach Gníomhach and I welcome the contributions from 14 Senators on Second Stage. I will make some general comments and we can then discuss the Bill on a section-by-section basis on Committee Stage.

A number of issues were raised. I welcome the generally positive tone and support for this legislation. Some people have highlighted issues that could be but are not included and some that could not be included in a Bill such as this. Other particular measures were mentioned that people are not satisfied with.

There was a question as to whether investors have to provide statements of affairs under the loan guarantee scheme. I do not have an answer to that here today because it is not connected with this legislation at all but it is something that I have taken note of and will check separately.

The question was asked as to whether we should have done more on VAT within the tourism sector, where the 13.5% rate was reduced to 9% previously but has now gone back up. This is an all-economy approach, we are not doing it sector by sector. We needed to get something done as soon as possible and every sector can avail of any aspect of this, not just under this legislation. There are other elements within the July stimulus package that are available to tourism and various other sectors and there is not therefore a provision specific to that sector. Legislation normally covers the economy across the board.

An issue was mentioned in connection with the help-to-buy scheme, which I understand. We will discuss this on Committee Stage, together with the question of whether the TWSS should run a little longer and have a greater overlap with the new scheme that is coming into place. There is also the issue of people earning less than €150 per week and the fact that a third of taxpayers will not be able to avail of that scheme. There is another good way of looking at the matter, which is that there are so many people on low wages that are not within the tax net. I see that as a positive rather than that they are being penalised in not being taxed, or that their employers may not be getting the subsidy. The other half of that equation is they are not paying tax in the first place.

People noted their opposition to various sections of the Bill. It was stated that what is proposed might have been a €10 billion instead of a €1 billion plan, and that a Brexit fund should have been as well. We are dealing strictly with Covid-19 here. Before the year is out, we will have plenty of Brexit issues and will be making various arrangements in that regard with legislation relating to Brexit.

This Bill relates specifically to Covid-19. Many issues were mentioned such as health, schools and childcare. There are measures specifically to deal with the childcare sector, which have been welcomed, because we all hope that sector is up and running and that there is not a reduction in income in the second half of this year compared to last year. That is the reason special measures are contained in the Bill but the broader childcare issue that was raised is a much bigger one and is best directed to the separate Minister who is working on that.

Speakers complained that an impact assessment was not carried out on some aspects of the Bill. Others said we should have included a lot more measures without any impact assessment being carried out. It is difficult to get the balance right. I accept that no impact assessment has been carried out on the help-to-buy scheme. If we went down that road we would not be able to make the improvements we are making because we would be preparing reports for a long period. Sometimes we have to move on legislation where there is an urgent need, such as due to the Covid crisis.

Reference has been made to proprietary directors. They are not eligible. That is the simple fact. They are not considered normal employees because, as with self-employed people they are both employer and employee. They have a different relationship. If a business is up and running, they are running a business and they are in a different category from the employees they take on. If the business has not opened then, as with the category of self-employed people, they could come in under the Covid payment. The logic behind the measure is that proprietary directors are in a very different position from what we would call regular employers.

I was taken by the bike-to-school scheme that was mentioned by Senator Bacik. I like it. To be honest, it is the first time I have heard it. It is good to hear such an idea. We all know that children need more exercise. That would be a good thing but the Senator will appreciate it is not in this Bill.

Perhaps it will be in the budget.

Senator Bacik can make the case here on Committee Stage. Reference was also made to farmers and the cycle-to-work scheme.

That is a stretch.

They are not specifically included in that. I think the reason is that the self-employed are not included. The reason generally is that the cycle-to-work scheme is administered through the employer, through the PAYE system, so it is really suitable for people who have an employer and can work through the PAYE system. The self-employed are not in that category. I do not suggest it will happen, but the difficulties regarding self-employed people operating a scheme like this would be immense because they make tax returns perhaps only once a year and there is a practical, logical reason it is only for employees on PAYE, as that is very easy to administer.

That said, if a farmer could prove that a bicycle is wholly and completely necessary for the carrying out of his business, like the tractor, for example, for carrying a bale of hay on the handlebars or whatever he chooses to do on it, and he does not use it for personal use, perhaps a case could be made for it to be included under the vehicles and some element of a tax allowance might be provided. I say that in jest. I hope people do not take it too seriously. It would have to be wholly, necessarily and exclusively used in the course of a business. I have answered that question as best I can at this stage.

Regarding the help-to-buy scheme, the 70% rule is a very difficult one and there have been rulings set in legislation that can be appealed and people can seek reviews but the legislation does state 70% of the value of the loan to the cost of the building. When one sets a figure in legislation the people who interpret the legislation do not have any scope. It can be very difficult for people who are 1% or 2% short of the 70%.

Regarding the employment wage subsidy scheme, the employer can get a PRSI subsidy as well as the support from the tax office so it is a generous scheme, as has been mentioned.

A couple of speakers referred to the fact that the help-to-buy scheme is only for new homes. My understanding of this scheme is that its aim is to add to the supply. Buying a second-hand house does not bring an additional house into the system. If somebody builds a new house that is an additional house that is available. As Members are aware, since 2010 or thereabouts there has been very little house building and the problem is that there has been a shortage of supply. This scheme was introduced to encourage the supply of new houses rather than to assist people to move from an existing house to another one that already exists. It is aimed at increasing the housing supply. I take on board the points that have been made, which can be raised again in the context of the budget. The design of the scheme is to get people, such as block layers, plumbers, carpenters, those installing new fitted kitchens and everything that goes with a new house, back to work. It is not just about people buying a house, it is about those who get employment during the course of the construction of the house and it adds extra houses to the market. That is the purpose of the scheme.

Another issue raised related to the banks and mortgages in regard to Covid-19. The Government's position is very clear on that. We have asked the banks to be fair and reasonable but we cannot direct a bank on whom to give a mortgage to and whom to refuse. I accept that difficult cases have been mentioned. I will ask the senior Minister, Deputy Donohoe, to raise this issue. The Department will meet the banks and we will ask them to take a fair and reasonable approach. We do not want them to walk out of the mortgage market at the first sign of difficulty. I hope the banks will take a pragmatic and fair response and that they will not be as strict as they were in some of the correspondence they issued earlier. If the stimulus package has the desired effect and we get greater stability in the economy the banks might have more confidence in lending to people.

On whether the VAT reduction from 23% to 21% will be passed on, we want it to be passed on and we hope it will be but we cannot guarantee that will happen. I would be foolish to suggest otherwise. If one shop or café does it, I hope the next one will do it, but it is up to businesses to make the call. Because they are struggling financially due to loss of business and they are having to reinvest, they might want to use the benefit of the VAT reduction to keep the business going. That is an important element. There are two options. The benefit can be absorbed in terms of the extra costs that are incurred over Covid-19 to keep the business alive or if a business is strong enough it can pass it on to customers by way of a price reduction. The people who can judge it best are those who are closer to the ground. There is no mechanism to guarantee the benefit will be passed on. If that does not happen, we hope it will help to keep a business alive, which is the main thing we need to do.

Compliments were paid to the local employment offices, LEOs, throughout the country. We all recognise the work they do. Many contributions also referred to the tourism sector and the VAT rate, which I mentioned already, in terms of being registered with Fáilte Ireland. I take the point that it adds a restriction and it does not include some people but everybody would be more comfortable, especially after Covid-19, if they knew they were going to a place that was registered with Fáilte Ireland. People are nervous about leaving their houses and staying elsewhere and sleeping in beds when they do not know who slept in the bed the night before. People will have more confidence in the quality of accommodation when they go away if they know it is registered with Fáilte Ireland. I know other places are not included but, on balance, especially on this issue, we have to give confidence to consumers that they are going to a bed and breakfast or hotel that is registered with Fáilte Ireland if people are availing of this scheme.

Reference was made to Cork Airport.

I know the Senator will raise that with my ministerial colleagues. All I can do on that particular point is pass on the views that have been expressed.

I am not very used to the format here, but I have tried to respond generally to the comments that were made. I know that on Committee Stage there will be a far more detailed discussion on some of the sections and recommendations.

The Minister of State is doing well.

Question put and agreed to.

When is it proposed to take Committee Stage?

Is that agreed? Agreed.