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Seanad Éireann debate -
Tuesday, 7 Dec 2021

Vol. 281 No. 4

Finance Bill 2021: Second Stage

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

We are here to discuss Second Stage of the Finance Bill 2021. I understand that Senators have been sent a summary of the Bill addressing its individual sections. I do not intend to go into that level of detail now. Instead I will consider the overall Bill and the principles behind it. As we know, the Finance Bill gives legislative support for the budget measures introduced by the Government in October. The Bill makes a number of other important changes to tax legislation. The 2022 budget addressed the major issues facing Ireland, that is, Covid-19, climate change and housing. In the 2022 budget the Government continues to support households, families, individuals and businesses to deal with these challenges and to look to the future with optimism.

The Government has brought in an income tax package for next year that will have a value of €520 million. As the Minister announced on budget day, the standard rate income tax band will increase by €1,500 and the personal tax credit, employee tax credit and earned income credit will all increase by €50. These changes will benefit everyone who pays income tax. The Finance Bill also contains changes to the universal social charge, USC, which will ensure that a full-time worker on the minimum wage will remain outside the top rates of the USC and that medical card holders will continue to pay reduced rates of the USC in 2022.

Since the onset of the Covid-19 pandemic, the Government has provided unprecedented supports for businesses and workers. Some of this support, including the temporary wage subsidy scheme, the employment wage subsidy scheme, EWSS, the Covid restrictions support scheme, CRSS, and the business resumption support scheme, has come under the aegis of the Department of Finance. This demonstrates a swift and effective response from the Government to provide timely and ongoing support under these schemes to those whose livelihoods have been impacted by Covid-19. This support has been as important to individual employees as it has been to businesses. As of 2 December, a total of 694,000 employees were supported by payments under the employment wage subsidy scheme, with €5.7 billion now paid out by the Revenue Commissioners in addition to the €893 million in PRSI forgone.

The Government has always emphasised that there would be no cliff edge to business supports, and the Finance Bill provides for the extension of the employment wage subsidy scheme. The scheme will remain in place in a graduated form until 30 April 2022. No change was made to the scheme for October and November. Businesses availing of the scheme at end of the year will continue to be supported until the end of April. For the three months from December to February, a two-rate structure of €151.50 and €203 will apply. For the last two months of the scheme, March and April 2022, a flat rate of €100 will be put in place and the reduced rate of employer's PRSI will no longer apply. The scheme will close to new employers from 1 January 2022.

The Government is bringing in new measures, with effect from today, which will impact the hospitality sector at a time of the year when the sector would be gearing up for its busiest period. The EWSS, as an economy-wide scheme, will continue on the path laid out on budget day and provided for in the Finance Bill as passed by the Dáil. Taking account of the impact of the new measures on the hospitality sector, the Government is introducing a revised Covid restrictions support scheme for businesses in the hospitality sector that are subject to restrictions on operating. The revised scheme will provide targeted and timely support to the hospitality sector to supplement the support it is receiving under the employment wage subsidy scheme. The revised scheme will adjust the CRSS to support businesses whose trade is significantly impacted and which are subject to regulatory restrictions on operations. This will involve a weekly payment of 12% of turnover for qualifying businesses. Officials in the Department of Finance and the Revenue Commissioners are working on this at present and further details will be available later this week.

There will also be a further extension of the current targeted commercial rates waiver for the first quarter of 2022. This will be put in place at an additional cost of approximately €62.3 million. The Government is also making available additional funding of €25 million, in addition to the allocation of €25 million already provided for in budget 2022, to support the live entertainment sector. The Government has also agreed to a limited reopening of the pandemic unemployment payment, PUP, for workers who are temporarily laid off due to the impact of these public health restrictions.

The Government made significant changes to vehicle registration tax, VRT, last year in line with Government commitments to reduce emissions radically. The Finance Bill 2021 will continue this important work. The Bill makes further changes to the upper bands of the VRT table and extends the €5,000 relief for battery electric vehicles to the end of 2023. It also extends for three years the accelerated capital allowance scheme, ACA, for gas vehicles and refuelling equipment, and extends the scheme to include hydrogen-powered vehicles and refuelling equipment. The Government is committed to reducing radically emissions from road transport. Part of that involves providing incentives for motorists to purchase cleaner, lower emitting vehicles. The policy changes introduced in respect of VRT in the Finance Act 2020 are working. This year's statistics to date show a clear trend towards the uptake of cleaner vehicles following the change to VRT rates. A significant increase in the number of electric vehicle, EV, registrations has been mirrored by a decrease in the number of high-emission vehicle registrations. The middle emissions bands have also experienced a shift towards lower emission vehicles.

The Bill exempts from tax the first €200 of income arising from the domestic generation of electricity supplied to the national grid. This is intended to remove a barrier to entry for those who engage with the clean energy guarantee scheme.

The Government is committed, through Housing for All, to achieving progress on housing as a matter of utmost priority in the interests of the people of Ireland. A key element of this strategy is the need to release land for construction of housing. The Bill addresses that objective by introducing a zoned land tax.

This seeks to facilitate public policy requirements that, when suitable land is zoned and serviced for housing, it should be made available for residential development at the earliest opportunity. The Bill provides a rate of 3% to be applied to the market value of such land.

Finally, it will extend the help-to-buy scheme in its current, enhanced form for a further year to the end of 2022. The scheme will be comprehensively reviewed in the course of the next year. In addition, the Bill will extend the relief for pre-letting expenses for landlords for a further three years. This measure is aimed at increasing the supply of rental property and is consistent with the Housing for All strategy.

The Government continues to support industry and innovation and the Bill will introduce a new tax credit for the digital gaming sector. The relief will support digital game development companies by providing a refundable corporation tax credit for qualifying expenditure incurred on the design, production and testing of a new game. The relief will be available at the rate of 32% on eligible expenditure up to a maximum limit of €25 million per individual project. As European state aid approval is required for this credit, it will be introduced subject to a commencement order as soon as possible. To assist new and recently established start-up companies in the aftermath of the pandemic, the relief from corporation tax for start-up companies in their first three years of trading relief will be extended for five years.

The Bill provides the legislative basis for the budget and makes a number of other changes to tax legislation. I look forward to discussing its details on Committee Stage and I commend it to the House.

I welcome the Minister of State. The Bill, the second Finance Bill of this historic coalition Government, aims to give the people value for the money they pay in taxes by investing wisely in public services such as health and education and to invest strategically in the needs of our people, particularly in the area of housing. Moreover, the Government has agreed a climate budget required to make a meaningful contribution to the global problem of climate change. As if achieving these tasks was not serious enough, we have also to take into account the catastrophic effects of the Covid-19 pandemic on our society and economy. The value of our front-line workers in the health service and those in essential economic services such as food production has been brought home as never before. The people have risen to this challenge with a remarkable solidarity and that solidarity must be reflected in Government policy. That is exactly what the Bill, which backs up budget 2022, does.

Fianna Fáil in government has to deal with the reality of the ability of the economy to provide the taxation income that drives our investment policies while ensuring our economy will remain attractive for economic growth and business opportunities. The guiding principle of Fianna Fáil has always been and remains the common good of all Irish people. Childcare supports, an increase in fuel allowance, social protection payments and pensions are proof Fianna Fáil and the Government are delivering for all our people and not just promising fairy-tale stories that have no basis in reality. The increase in the income tax band will give a tangible and progressive reward to all Irish workers and help those who are the backbone of our economy thanks to the ability of their work and their contribution to our tax base. We do not demonise any part of our great nation but rather value the contribution of all business workers, farmers and public servants. Housing, healthcare, climate change and the cost of living are all being heavily invested in through the Bill.

Unlike many others in this House or on the front line of Irish politics, I know what it takes to run a business in Ireland. I know the sacrifices a family-run business must make to create sustainable jobs, pay taxes and grow business from year to year. I have lived through several recessions and been involved in the tourism industry. I know better than most the shattering consequences of the economic shutdown caused by Covid-19 on the tourism and hospitality sector. I understand the Government's position that we must put public health first and foremost, and I acknowledge the supports the Government has provided for businesses up to now, without which my business would not be here today. Equally, we should not waste that investment but look at ways we can survive as we move into the future. The implications of the messaging in recent weeks and the announcement of Friday last relating to the hotel and accommodation sector concerned almost €250 million in advance bookings. Between December this year and February next year, 2.3 million bed nights or room sales will be dropped. That is significant for the industry and will have consequences.

One of the greatest supports the Government has provided to our industry and other industries is the employment wage subsidy scheme. I heard the Tánaiste speak just before I came to the House about a legal issue with sectorising that scheme. We must do everything possible to reinstate the EWSS for the hospitality sector, as well as sectors such as arts and entertainment that have been devastated by this. It is the single most important payment, and I say that because our greatest asset is our staff. The EWSS allows us to keep our teams together. We have suffered an incredible loss of staff out of our sector because of the inconsistent and unreliable nature of the business, owing to the continual closure and reopening or restrictions and lifting of restrictions, and they have moved to other sectors because of job insecurity. We are now trying to build again, and we were looking forward to this winter but again it has not happened. We are back, almost, to where we were last year.

I cannot stress enough how important and valuable the EWSS is. I ask whether a €350 payment is better as an EWSS payment or as a pandemic unemployment payment, PUP. Is it better to keep the person in employment or to let him or her go and receive the PUP? I think that, from everybody's point of view, remaining in a workplace and being part of a working team is much better for everybody. Between now and next week, whatever can be done to reinstate the EWSS has to be done. We in the House will sit next week to debate amendments to the Bill and we can table the required amendments to allow it to happen. It is the single most important support to businesses.

There is one anomaly that has to be addressed. Hotels that close on a seasonal basis will be taken off the EWSS because they will not make a claim in December and, therefore, will become new entrants in January, when the scheme will not be open to new entrants. They will try to build up their staff for the season but they will not qualify. It is an anomaly that has been recognised by Ministers but it needs to be addressed.

I acknowledge the work being done to try to make the Covid restrictions support scheme, a substitute for the EWSS but it never will be. It will not do so in the format that has been proposed. I acknowledge the requirement has fallen from a turnover of 50% to 30% to bring it in line with the EWSS and that there is an attempt to cap the payment at €10,000, but that will not be at the races for certain businesses within the hospitality sector. Another figure of €15,000 was mentioned in respect of CRSS, but that will not have the same reach as the EWSS. We in the House are available to make the appropriate amendments to the legislation to allow this to happen. Will the Minister of State convey to the Ministers for Finance and Public Expenditure and Reform that we are willing and able to make the necessary amendments to the legislation to allow the EWSS to be reinstated in full for the sector? Employment is booming and people are moving from our sectors to the other sectors, which is making it increasingly difficult to build our teams and keep them together.

I thank the Minister of State for budget 2022, which is a very balanced and fair budget. I urge him to do whatever he can about the challenges we face.

The challenge is trying to keep our core asset, our staff. They are the key asset in our industry. They are more valuable to us as an industry than financial assets.

I thank Senator Casey for his very passionate contribution.

I thank the Minister of State for coming here for this important debate. The Finance Bill will affect all of us, right across every sector. There is increased spending within the budget, which will affect all sectors in society. I welcome the increase in the tax bands for both employees and employers. That is very important and puts a little bit more money into everybody's pocket. We had a debate earlier with the Tánaiste and Minister for Enterprise, Trade and Employment with regard to supports. Senator Casey has just spoken very passionately about these. I have been dealing with small and larger businesses in my own neck of the woods, Limerick, including hotels, restaurants and gastropubs, and with people in the tourism industry such as coach providers. As a result of the Omicron variant, not as many people are coming into the country now. People do not yet know a lot about it. Some people have cancelled their trips, including golf trips, to Ireland. Many businesses have been affected by Covid.

I compliment the Government on the supports that have been put in place to date. They have certainly helped keep many businesses afloat. I told the Tánaiste a little story earlier. I was talking to a small business that employs 45 people. The 50% threshold definitely does not work for it. I give that as an example. It maintained its business just above that 50% threshold, business being down by 46% or 47%. It did this by doing such things as selling vouchers to support this Irish business and encouraging people to buy takeaways. That is how it increased its business. It would not normally have gone down that road. The 50% threshold needs to be looked at. I welcome the fact the Minister of State's Department is in negotiations with the Revenue Commissioners and that it has had meetings with the industry and with small businesses in the performance industry.

The Minister of State mentioned the issue of housing and Housing for All. I will raise a few matters in that regard. A parent who bought an apartment for €200,000 years ago whose son or daughter cannot afford to buy a house may gift that apartment to his or her child to be used as the principal private residence. However, if the value of the apartment is now €250,000 or €280,000, the parent will be taxed on the difference between the two figures. The Minister of State needs to look at this. We hear of many people who are on housing lists and of parents giving loans to family members to help them raise the deposit for a home. I understand these areas have not been looked at in more than ten years. They really need to be looked at properly because more and more parents are now helping out family members but are being penalised for doing so. There is also an issue with parents gifting farms to young farmers. Perhaps the Minister of State could look at that. With regard to the ten-year period, it is probably unlikely that a definitive estate planning period would be allowed but perhaps the Department of Finance could look at the issue of tax on gifts from parents to children. I have raised the issue around increases in the value of a premises.

With regard to the proposals on climate change, I welcome the €5,000 in respect of electric vehicles, but we also need to look at how we are going to bring in charging points. People living in terraced houses or apartments might want to buy an electric vehicle, but there are not a lot of charging points around the country. This needs to be taken into consideration.

I have covered pretty much everything I wanted to cover. There is just one other thing. With regard to a parent giving a gift to a family member, the total value of all gifts over a certain period is aggregated. Once the ten-year period is up, does it start again? That is something that needs to be looked at. When a parent passes on and leaves an inheritance to a family member, it can sometimes count against them if they have already received a gift of a house or apartment. That is another area I would like the Minister of State to look at.

It is nice to see the Minister of State. I thank him for coming in. We are going to oppose this Bill, as I am sure he would expect us to. I will outline the reasons over the next few minutes. However, I will welcome a couple of aspects of it because I want to be balanced and fair, if I can. I particularly welcome the ring-fenced funding for childcare. My union, SIPTU, has campaigned for this for years. I was part of its Big Start campaign six years ago. The fact it has managed to win ring-fenced funding is really encouraging. It is a tribute to its members throughout the country. I urge the Minister of State and his Government to ensure this is implemented. We need a sectoral employment order to bring about a new status, dignity and decent wages for those working in the sector. Funding has been ring-fenced, which is wonderful. Let us get that sectoral employment order in place and do something transformative for childcare. I pay tribute to my colleagues in SIPTU who campaigned so vigorously for that for so many years.

As the Minister of State will know, we also welcome the extension of the employment wage subsidy scheme, albeit in a graduated form, to the end of April 2022. I acknowledge the point Senator Casey made with regard to those anomalies. We will work constructively on that issue with the Minister of State next week.

Having got the good news out of the way, I will now focus a little more on why this budget does not deliver. I do not want to correct the maths of my colleague, Senator Casey, because I was not great at maths myself, but this is actually the sixth Fianna Fáil-Fine Gael budget. Fianna Fáil backed the previous four budgets before it came to power. These did absolutely nothing for housing. Unfortunately, it was very much part of that. This is not a new Government but very much an extension of the old Government. Unfortunately, it has the same ideas and the same failed policies. The reason we will oppose this budget is that it really is out of touch with how people are struggling today. I will give the Minister of State a couple of examples. I would welcome his comments on them.

First, the real spike in energy prices is shocking. I have some details here. Over recent months, there have been more than 30 energy price rises, which are expected to increase average annual household energy bills by more than €400. In the 12 months to September, energy prices rose by 22%, electricity prices by 21%, gas prices by 14% and home heating oil prices by 46%. These prices will increase further in the months ahead, putting great pressure on the finances of low- and middle-income households. The Finance Bill could have responded to these challenges by giving workers and families support and providing an immediate cut to their energy bills. Other governments in Europe have taken this action. In Spain, where there is, of course, a progressive left government, VAT on electricity was slashed, reducing prices by 10%. In recent weeks, the Czech finance minister wrote to the EU Commissioner for the Economy seeking authorisation to zero-rate VAT on household energy bills.

Sinn Féin would immediately engage with the Commission to remove VAT on domestic energy bills for a three-month period this winter, thereby reducing the cost of lighting and heating homes for lower and middle-income households by 12%. That is what should have been done but, unfortunately, this Government is just as out of touch as the previous one. It does not seem to understand how families are being hammered by these rises in energy prices. Indeed, it has added to them via carbon taxes.

This Finance Bill comes amid a wider cost-of-living crisis, with prices rising by more than 5% for workers and families in the last 12 months. This is the biggest annual price hike in 20 years. The Central Bank expects prices to rise again in 2022, by 3%, further eating into the purchasing power of households.

Budget 2022 and this Finance Bill needed to respond to this cost of living crisis. Quite simply, it did not do so. Increases in core social welfare rates have failed to keep pace with rising prices. We have, as centrepieces of this budget and the Finance Bill, a tax package that was untargeted and an irresponsible use of limited resources.

Section 6 of the Bill would increase the standard rate band by €1,500 with a €50 increase in each of the personal, employee and earned income tax credits. The change to the standard rate band comes at great cost but will provide no benefit whatsoever to 80% of taxpayers who fall below it. Overall, this tax package will provide €2 a week to a worker on a salary of €30,000 but will benefit those on a ministerial salary to the tune of €415 a year.

This Finance Bill provides tax relief to those on high incomes and even further tax relief to landlords through section 16 but offers nothing to renters. These renters have seen their rents rise to astronomical levels yet have a Government that is determined to see them rise even higher. Dublin city now has the highest rents in Europe. Where I live in Limerick, rents for a very average three-bedroom house in my village are up to €1,400 a month and this budget has done nothing to address that issue. In fact, the Government clearly does not understand the depth of the problem because it has not even acknowledged that rents need to be frozen and then reduced. The Government just thinks it is okay to reduce the cost of how much rents go up by each year. Talk about missing the point. People cannot afford the rents they are on at the moment. We need to reduce rents. We could have done that if the Government had followed the Sinn Féin proposal to, first, freeze rent for three years and then give a one-month tax relief, which would have made a significant difference. Again, and not for the first time and just like in the previous five budgets, the Fianna Fáil-Fine Gael partnership rejected that option.

I want to talk about investment funds. Under Fine Gael and Fianna Fáil the deck is stacked against renters and struggling home buyers. There are no provisions in this Bill to end the speculation and financialisation of housing that is driving up rents, locking workers and families out of home ownership, and allowing the bulk purchase of homes by investment funds. Fine Gael introduced tax advantages for investment funds that allow and encourage them to push up prices and rents. Sinn Féín would end that by the doing the following: applying the full rate of capital gains tax on the disposal of property by investment funds just like any other business; applying a 17% stamp duty surcharge on the purchase of all homes, including apartments, by these funds; and hiking the rate of tax paid on dividends to 33%. This Government carries on the tax breaks for vulture funds. I have yet to hear an explanation from this Government as to why 2,600 of the promised social housing units next year are going to come about by insisting that councils lease those homes from vulture funds as opposed to buying them. What a complete and utter waste of money. Of course what that does is create a new income stream for vulture funds and gives them incredible leverage because they will rent these houses for 25 years. What will they say at the end of that period? They will say that they are not sure whether they should give these homes back or sell them to the State and will ask what else the State will do for them. This is an incredibly ideological decision. I have always associated this hard right ideology with Fine Gael and, unfortunately, it now seems to be just as prevalent with the Fianna Fáil Party, which is a huge shame.

In my last minute I will talk about the residential zoned land tax in section 77 and related sections. The stated purpose of the tax is to encourage the activation of zoned and serviced residential development land. While the failed vacant site levy was set at a rate of 7%, this will be set at 3% of the market value of the land and will only apply from 2024 so, in other words, after this Government has pretty much finished its term.

We welcome the fact that the tax will be administered by Revenue to ensure effective enforcement and collection. This reform could and should have been made of the vacant site levy, which has now been left as an abject Fine Gael failure. Once again, this is an example of the Government not taking action. Taxing people who own vacant sites is something this Government, just like the last one, will always shy away from. The Government has scrapped the original tax, brought in a lower one and said it will not introduce that until 2024.

The original one was not working.

I ask the Acting Chairperson to tell his Fianna Fáil colleague to allow me to speak.

I am in the Chair and rule that exactly. I urge the Senator to continue.

I know that I am hitting some sore points but that is okay.

I ask the Minister of State to tell us why the Government has backed the special assignee relief programme that rewards existing millionaire executives with up to €110,000 each in tax relief? The Government has set this scheme in place now. The former Minister for Finance, Mr. Michael Noonan, introduced it originally and the Government has backed it again. Fianna Fáil backs tax cuts for millionaires while people who are struggling to pay their energy bills and rents get nothing from this Government. That is the reality.

I thank the Minister of State for coming to the House. I am conscious that the Finance Bill has spent many hours under consideration in the Dáil and will confine my remarks to a small number of specific issues.

Senator Casey very eloquently talked about the need to fix the EWSS. Many of us across this Chamber have fielded calls from hoteliers, and from those who work in the night-time economy and in catering who are devastated by the cuts to the scheme. What has struck me over the last number of weeks is that when a cut was made to the pandemic unemployment payment, we were told that there were plenty of other jobs and that the people who work in the night-time economy can get a job somewhere else. That response showed a huge lack of respect for musicians, bouncers and everybody who works in the night-time economy. Again, in the past week we have heard the line that there are companies that get the EWSS but are they entitled to it as they have been open on a full-time basis for the last number of months? It is the role of Revenue and the Government to monitor who gets the EWSS. There is a clear and real need now because of the restrictions and, indeed, arguably the necessary restrictions, that the Government must up its game in the way that it supports people who are going to be put out of work or suffer a massive cut to their working hours because of the restrictions. It is incumbent on this Government to restore the EWSS to where it was.

Section 3 deals with the income tax relief for remote working and the increase to 30% in respect of the costs that are to be claimed. I welcome that small progress on the current position for those who work from home and the utility costs on which they can claim tax relief. I find it hard to understand why the provision would not be backdated to 2021. I ask that because in the budget that was announced in October last year the increase in the tax relief for those working from home was backdated to 2020. As the Minister of State and I know, the working from home guidance has never been fully lifted. In fact, companies, workplaces and workers were encouraged to very gradually return to the workplace well into Spring 2022. Of course, from 16 November we had the guidance that people should work from home unless absolutely necessary. Therefore, it makes no sense that one has a relief that only kicks in in 2022 when in 2021 people are being asked to work from home if at all possible. It is only a very small measure but an important one in the context of the energy costs faced by households and workers at this point in time, which was referred to by Senator Gavan. We are looking at an annual increase in energy costs of 24%. The data on inflation in this country dates back almost 40 years and energy prices have never ran as high.

I am particularly disappointed that in this budget and Finance Bill there is very little or nothing for those households who do not qualify for the winter fuel allowance but must face extortionate increases in their utility costs. In particular, I think about the communities where I live and, indeed, where the Minister for Finance lives in Dublin 7, where 22% of households have homes with a F or G building energy rating, BER. That means those households live in the least energy efficient houses and these houses tend to be occupied by the least well paid or least comfortable of households. We know that the difference in a utility bill for a F or G BER rated 2-bedroom apartment relative to one that is B2 BER rated is €2,500 in a year and for a 3-bedroom, semi-detached house the difference rises to over €3,500 in terms of the annual fuel bills. There was nothing in this budget for those households.

The final set of issues that I want to raise today relate to apartment living in this city and across the country. The future of living and development in this city will be in building apartments. The bulk of those hoping to buy or rent new units in the future will be in apartments because of cost, access and proximity to the city. Right now we have two massive problems relating to apartment building. The Finance Bill fails to address them and we will be putting down amendments. The first problem is the bulk-buying of apartments. We had a massive outcry during the summer when it was realised that institutional investors were bulk-buying houses. Bulk-buying of apartments has been going on for years in Dublin and that did not seem to be a problem but the bulk-buying of houses provoked an outcry. This resulted in a change in stamp duty but apartments were excluded. That is going to have a devastating impact for those wanting to buy an apartment in Dublin. There is no incentive now for a developer to build a house in Dublin city because of the stamp duty and planning arrangements. Any developer worth their salt is going to look to build to rent as opposed to building conventional apartments. We are already seeing that. People talk about the lack of supply in Dublin. In the area where I live there is plenty of supply. There are 4,500 co-living, build-to-rent and student accommodation units going through the planning and construction system and only 2,500 conventional apartments. It means there is no access to affordable apartments in the city.

The second problem with regard to apartments relates to construction defects. The Government has spent a lot of time on the mica issue over the past year and rightly so. As the Minister of State knows, the issue of construction defects in apartments in respect of fire safety standards is also significant. I am aware that there is a working group within the Department of Housing, Local Government and Heritage and that there will be a report next year. At the very least there could have been a tax relief or tax credit for those who are facing massive remediation costs in respect of construction defects in their apartments. Where I am based in Dublin Central, there are at least six apartment blocks covering 1,000 apartments. Apartment owners are facing costs that have to be met immediately. It is not something for which they can kick the can down the road. I know one apartment block where they are facing a bill of €15,000 that they have to pay between now and Christmas to help to meet the remediation costs of their apartment. The least the Government could have done was ensure that there was a tax relief for those facing such enormous vital costs in the short term.

I welcome the Minister of State to the house. In fairness he has been here on a number of occasions at this stage. I welcome the tax changes in the Bill. With inflation and rising prices in many areas it is essential that the Government reduce the tax burden for people, as this Bill does. The budget is also progressive in that those on the highest incomes will gain the least while the most vulnerable 30% of families gain the most. Fianna Fáil said before last year's general election that any budget with it in government would prioritise the most vulnerable from an income tax standpoint and I am proud to see that commitment is being honoured. We must continue to do that.

Senator Casey raised the hospitality sector earlier. We are concerned that the 9% VAT rate is in place until September while naturally we need it for all of 2022 at the very minimum. As the Minister of State is aware, that rate is applied in many countries across Europe. Removing it would impact our competitiveness against European neighbours. Following the restrictions today the hospitality sector will need every support possible as it looks to rebuild over the coming 12 months. As I noted earlier, a long-term task force needs to be set up to examine the viability of our industry. It is unique in respect of tourists across the world and attracts tourists to our country. It is absolutely paramount. I know the Minister of State is not far from the Cabinet table. I ask him to use his influence to ensure that a long-term hospitality task force is established at the earliest opportunity and by early February at the very latest.

We hear all parties and none in this House and the Lower House saying that they cannot understand the position that is being taken in respect of the EWSS. Employers in Galway, which is the capital of the west and a tourism city, are begging me in respect of the EWSS, which is reduced from €350 to €203. I have asked those working in the highest office why it cannot be sector specific. If it cannot be, we should be told the reason. When I am going back to owners and managers who are significant employers in Galway I cannot explain it to them. I do not have the information and they cannot understand the information. If there is a 40% reduction in the wage subsidy scheme why are we not told exactly? It is very frustrating. I am sure the Minister of State is getting it in all parts of County Laois. It is a significant reduction of €147 per employee per week. It is causing consternation. It has been raised by all Members. It is absolutely vital. The restrictions have increased and the support has decreased. It is just not adding up.

The introduction of the zoned land tax is welcome at a high level. Its purpose is to encourage the timely activation of zoned and serviced residential development land for housing rather than to raise revenue. We must make every effort to ensure that land is developed for housing with the greatest speed possible. I also welcome the extension of the help-to-buy scheme in its current form for a further year. No more than any other Member of either House, I have been contacted by many young couples in Galway. I am trying to give them hope and show them that there is opportunity down the line. The scheme is very welcome. I have concerns in respect of cities and rising inflation, Brexit, the cost of materials and the cost of properties. I wonder how we are going to address all that. It is a double whammy really because if they go over the threshold they lose the incentive. It needs to be looked at.

I welcome the introduction of the pandemic placement grant, PPG, a payment of €100 per week for full-time student nurses and midwives on clinical placements as a supplemental financial support in carrying out this placement during the pandemic. We all welcome that. I expect and hope that the payment will be maintained following the pandemic as acknowledgement of the valuable work that all student nurses and midwives do.

I welcome the Minister of State to the Chamber and the arrival of the Finance Bill 2021 before us. It has to be enacted before Christmas to implement all the very positive changes contained in the budget announced a couple of months ago. I particularly welcome the changes ensuring that the increases in the minimum wage will not be gobbled up by the universal social charge, USC. This is the eighth such increase made by a Fine Gael-led or Fine Gael coalition government. The latest increase of 30 cent brings the minimum wage to €10.50 per hour.

I also welcome the tax relief for remote workers. This will be most positive for remote working. Because of the pandemic we have seen a new impetus to remote working. The option to work from home will be legislated for in the coming period, as the Tánaiste said earlier.

I welcome the income tax exemption for the pandemic placement grant for student nurses. I also welcome the extension of the help-to-buy scheme which has been most positive and popular when it comes to getting people onto the property ladder. It is to provide up to €30,000 or 10% of the house price bill up to 31 December 2022.

I am sure that scheme will be kept under review for possible future extensions, as required. On the changes to tax bands, sometimes people are critical of such measures and argue that we have not put all our focus on increasing the spending in the Departments. If you do not touch tax bands, eventually everyone will end up paying a higher rate of tax. The tax bands have to be increased to allow for the increases in inflation and to ensure we raise the cut-off point on a phased basis. It is a specific policy that Fine Gael has promoted. I welcome that the personal tax credit has been increased by €50.

Other positive measures that have been introduced include the changes under section 7 of the Finance Bill, which will make it easier and less expensive for employers and businesses to provide the flu vaccine and other health checks to workers by formally exempting the cost of the flu vaccine and other health and well-being benefits from benefit-in-kind taxes. The measure dates back to the start of this year and is a positive in terms of business supports for workers.

I also welcome the €5,000 VRT relief for electric vehicles, which is to be extended to the end of 2023. I am sure that is something that will be kept under review as we move towards phasing out petrol and diesel by the end of this decade, unless that it is extended.

Section 56, which extends stamp duty relief to young trained farmers, is a positive measure. I am aware that it is a measure that is enacted every year, but it still has to go through the formal process. It has to be supported and voted through and there has to be a commitment by the Government for that to happen. I hope that future governments understand the importance of those reliefs and continue to apply them. According to the Bill, the relief will be extended to 31 December.

The bank levy is being extended for a further year to recoup some of the costs that the banks have received from the State and to ensure that financial institutions will contribute to the recovery in recognition of taxpayer assistance going back many years.

The zoned land tax is a measure that is intended to try to encourage movement in relation to the market. It is not about collecting revenue; it is about acting a stick to ensure that we get zoned land up and running and available, planning permission is granted and, more importantly, houses and apartments are built on that land. That is important. We must look at how we can force those who may be hoarding zoned land to build on it after a period of time. That is something that is going to be hugely important. We are familiar with the situation where people see lands that may be serviced or whatever else not being developed and yet we are crying out for houses and there is an absolute need for houses. It is absolutely vital that this measure goes ahead as an incentive and encouragement to free up that land. I welcome the changes I have mentioned and the many other positive changes that are being enacted in the Finance Bill this year. I look forward to its passage over the coming weeks.

I welcome the Minister of State to the House to speak on the Finance Bill. There are some very welcome changes to the Bill from the budget of this year. The increase to the USC is a measure that is particularly welcome.

We are always trying to look at the issue of remote working from rural perspectives, with a view to encouraging people to live and work in more of our towns and villages across the country. The income tax deduction amounting to 30% of the cost of vouched expenses for electricity, heating and broadband is really important. Broadband has been a really big issue. People want to ensure that they are getting quality from their provider. Usually, if they want to get a better download speed, they will have to pay higher rates. Therefore, it is most important that those in commercial areas who want to access really good broadband can do so and can get the rebate for it.

I am aware that the Minister of State's Department is not directly responsible for the promotion of the message about remote working and the reductions, but I am curious about how we are spreading the message and how we can ensure it is going out. We hosted a Grow Remote weekend in Ballinasloe last weekend. There was a heritage tour of the town. It was all about showcasing the region to people who may be considering a role in remote working. When I was speaking to people, they did not seem to be aware of the incentive I have mentioned. We should look at how we can work on promoting it.

The extension of the deduction of pre-letting expenses for landlords for a further three years is very welcome. I assume that applies to vacant properties. Perhaps the Minister of State can clarify that. I know that many people in my region are looking to renovate apartments, etc., above shop and retail units. The challenge they face relates to renovation costs, particularly now that certain costs are higher. What is there to support them? The extension I have mentioned is very welcome for landlords in terms of rental properties.

On how we are going to support research and innovation, I welcome the extension for a further five years of the corporation tax relief that the Minister of State has mentioned for start-up companies in the first three years of trading. This provides support to entrepreneurs who are setting up their companies and looking for support from the State. I welcome the measure.

The Minister of State mentioned the supports provided under the EWSS and what the Government has put in place in terms of PUP over the last year and eight months, which is very topical. I understand that this scheme will run at a graduated reducing level until April 2022. The challenge we have is that it will close to new employers from 1 January 2022. The Minister of State might like to comment on it. I know that the hospitality sector is looking for supports to be put in place. However, how do we have a level playing field if the scheme is going to be closed to new entrants? I understand that the CRSS has been brought in to support those employers and employees in ways. I thank the Minister of State for his time.

I welcome the Minister of State to the House. The Finance Bill comes around fairly quickly. It does not feel like it has been 12 months since the last Finance Bill. I have a few questions for the Minister of State. I missed the opportunity to ask some of them of the Tánaiste when he was in the House earlier. The Department of Finance estimates that we will have spent €48 billion helping businesses and workers by the end of 2022. This is the largest intervention by the State since the bank guarantee scheme. In relation to that €48 billion, the impression is given that the supports are all provided to businesses and workers. I would like to know how much of that €48 billion is in State supports for the State sector. I am sure that some of it is for the State sector. We have seen a huge expansion in the health service. There are vaccination centres and extra staff in hospitals and other areas. I would like further information on the breakdown in relation to the €48 billion. I believe that some of that is going to State services and the State sector.

The Tánaiste also said that the Department is carrying out a review of the popular and oversubscribed future growth loan scheme with a view to introducing a new loan product to replace it in 2022. That is to be welcomed. I must say I believe that there is too much State involvement in every aspect of society now. The State has taken a huge interest in, and is providing significant funding for, the housing sector. I am not sure it is healthy for the State to have such an influence. Is there any option other than State intervention? I have heard Senators today giving out about vulture funds coming into the State and buying up apartments. We cannot have the State funding all the houses in the country. There are problems with the provision of housing and with our own pillar banks in relation to the provision of funding for small developers and small builders.

I ask the Minister of State to consider, along with other Ministers, whether there is over-reliance on State funding in all sectors. I have highlighted two areas in which I believe the State should not have such an influence and should not have to provide such levels of support.

The Tánaiste referred to the small companies administrative rescue process, SCARP, legislation for small companies. As the Minister of State is aware, the legislation is very welcome. I welcome it because I have previously raised the issue of redundancy in the context of small businesses, sole traders, subcontractors and so forth. There is no doubt about the fact, alluded to by the Tánaiste, that there will be many failures of small businesses such as shops and pubs that will never open again. The owners will be left with a redundancy package and will have no choice but to pay it. The State will step in and pay but, eventually, it is taken out of the estate of the business owner. It is a very sad day when the finest employers in the country, sole traders who employ people all their lives, are the only sector in society that could end up having their house taken from them. The State probably will not go down that road and it is only right that employees get their two weeks' redundancy pay per year, but when the person dies and his or her affairs are settled, any funding that is owed to the State in the context of redundancy payments to former employees will be taken out of the estate. There could be a vulnerable family member in the house. This is an area that should be considered. I am bringing forward a Private Member's Bill on the issue. This is an area in which the family home should be protected. The Tánaiste brought in the SCARP legislation that will protect some areas of business from going into liquidation or all their assets, including their homes, being taken from them. I would welcome the Government considering the Bill I will be bringing forward and ensuring that family homes are protected.

I am out of breath from running down the stairs. I welcome the extension of the temporary Covid-19 waiver for Republic of Ireland cross-border workers in the context of the transborder workers' relief. If it were not for that extension, Republic of Ireland workers were going to be facing a cliff edge in terms of double taxation. They were being told that from a public health advice perspective they had to work from home, but the tax rules stated they had to go to the office or face a financial penalty. Although it is a positive step, it is not a permanent one. I am seeking reassurance that the issue is still on the Government's agenda and that it will find some sort of permanent fix for this issue. The language at the moment is that it is an emergency measure and will not be addressed in the long term. We know the culture of work has permanently changed. I do not think cross-border workers should be left behind in that regard. The tax strategy group examined the issue and referred to equity. I believe the report focused on the problems rather than the solutions. One of the problems it identified was the question of why would one household have access to a different set of tax levels to another household. Why should certain households have access to flexibility and quality of life while others do not? Did the group look at pay and pay levels as well? It referred to competition and stated that it would make it more attractive to work for employers outside the State. In my view, we should not be in competition with the North; we should be in harmony with it. We should be doing everything we can to encourage an all-island economy and reducing the barriers, not overseeing new ones. We need to think about this in terms of investment in areas that need it, such as areas that we know have been economically vulnerable through the years. If we can come up with solutions such as the protocol where there is dual market access in the North, can we not find a solution here? Is there a scheme that could be introduced? I am seeking reassurance and creativity. The message needs to go out that we are committed to finding a solution for cross-border workers and having no barriers North and South.

I thank the Senator. She is welcome back. I am very sorry for the loss of her father, Austin.

I join the Acting Chairperson in offering condolences to Senator Currie on the death of her father. I do not think we have spoken to each other since that sad event. I know all present join with me in offering condolences.

I thank the Senators who contributed to the debate. I appreciate all the points that have been made. I will go through the issues raised in sequence. Obviously, the issue of the hospitality sector was singled out as a key one for consideration today. The issue is now about how to survive at this stage, in light of the recent restrictions. The EWSS was mentioned by many Senators. The Minister has made clear that he wishes to deal with the sector through the CRSS method rather than the EWSS. I know it has been stated that the EWSS cannot be made sector-specific. It is probably the way it was drafted. I do not have the legal answer to that but I suspect it was because of the way the scheme was originally drafted. The CRSS is one way of providing some benefits to people in that sector. As I stated in my opening remarks, officials from the Department of Finance and Revenue are in detailed discussions on improving that. When the scheme came out first, it was on the basis of businesses that were closed. It is now being revisited on the basis of businesses that are open but suffering a reduction in trading income because of the restrictions that exist. We are remodelling the scheme specifically for that sector. As I stated, there will be announcements on that later this week. We do not have it today. I cannot pre-empt the process. Those discussions are ongoing and I am sure the Minister, Deputy Donohoe, will clarify all those issues as the week progresses. Beyond that, I am not in a position to comment. I hope that issue will have been well clarified by the time I come back here next week on Committee Stage. It may be another Minister who comes to the House for that Stage. The issue was raised because people are leaving the sector, in which there is good employment. Staff are a core asset, especially in that sector. The buildings, menus and products are there but what makes a business work is the actual staff. It is important that these measures are put in place very quickly to make sure the core assets of the business, which are its staff and reputation, are protected.

Reference was made to several budget measures across the board. I refer to the whole question in respect of coach providers and people affected in the area of tourism. I do not have a particular response on that but I acknowledge the point and will take it back to the Department of Finance.

A big issue mentioned is the question of capital gains tax on properties transferred by parents to their children in circumstances where there is a capital gain between the time of the purchase of the property and its ownership being transferred to another family member such as a son or daughter. As it is not the principal private family residence, that is the situation in the context of capital gains tax and there is no change in that regard in the Bill. It is has been more of a feature in society in recent times. It has not always been the case that people had a second property they could hand over. It is a First World problem. I do not mean that in a bad way. It is a sign that people had an extra property they could transfer. That said, it is an issue that can be examined in future but no commitment can be made here tonight on that particular issue.

The issue of aggregation of capital gains tax was raised.

We know it is accumulative over a person's life. People who could do so took measures and then they were not taken into account in the final amount. People did it at stages rather than at a later date.

I thank the Senator who supported the SIPTU claim, as many of us did, with regard to childcare funding, and the fact we need a sectoral employment order concluded as urgently as possible.

The issue of energy prices has been mentioned. It is an issue that is much wider than the Finance Bill. It is an issue germane to almost every political debate in the country at present. Through social protection and other measures, the Government has given the free fuel allowance for an extended period. It can be given to people in two lump sums during the course of the period or on a weekly basis. There has been a reasonable increase. It does not cover the full cost of heating but it was always meant to be a contribution to the cost.

There was a suggestion that it is a waste of money for councils to lease homes for people to rent. I understand the councils do not own the properties at the end of the day. I agree with the philosophy on this but I do not believe it is a waste of money for the council to re-lease properties so people can have a roof over their heads. I disagree with the philosophy that it is wrong to do this if a council only has the funds to lease in the short term. It should at least do that much and give people a roof over their heads. The other issue of ultimate ownership is an important debate but it is not one that is any good to a person looking for a home at this time of the year.

Many people mentioned working from home. In the past, there was a small provision in place. It was very minor. Enhanced provision is now in place but it is coming into effect from now on. I acknowledge that it would be nice if it could be backdated but effectively it will not be. The old scheme was on an administrative basis and this will be on a legislative basis. It is a small step in the direction. There may be incremental moves on this depending on the working from home situation as time goes on and people get a clearer cost base and Revenue collects information on the sources of the expenses. It will vary quite a bit when the new measure is introduced.

People mentioned the extension of the help-to-buy scheme in the provisions of the Finance Bill.

The pandemic placement grant for student nurses was also mentioned. I will give no commitment on whether it should be a permanent placement allowance but it is good that it is in place for Covid. We are dealing with situations in this regard.

Senators also mentioned that they support the tax changes and the changes to the minimum wage, which are separate issues. There are measures to ensure people are not caught for the higher rate of PRSI.

There was also a welcome for the stamp duty for young trained farmers and the continuation of the bank levy.

Senator Dolan mentioned the issue of pre-letting expenses. There are major cash flow difficulties involved for people who do not have the cash. People can get tax relief for the expenses after the fact. I accept that there can be issues financing it in the short term. It is not a grant system, which would be neater. It is in respect of a business expense where there should be a stream of revenue down the line. A good accountant might be able to work with a bank to structure the tax benefit over a period of time when the costs will have to be repaid if bank financing is involved.

Senator Burke mentioned the €48 billion in Covid costs. This is for employees by and large through the EWSS and the PUP. The point he made very clearly was that a large amount of the extra €48 billion was not with regard to dealing with Covid in the health services and the additional costs in the health services. I do not have a breakdown of the figures. It is information the Department of Health should be able to provide as part of its normal business before Oireachtas committees with regard to how much of the extra €48 billion was for improvements in the health service and how much was strictly related to Covid and education. Clearly the Department of Education will be able to give a figure for the costs of Covid. It was not all handed out to employees or businesses through the PUP, the EWSS or rates relief. Much of it went on direct front-line services through these areas.

The Senator also mentioned cross-Border issues. As a result of Brexit, temporary measures were put in place. We did not ask for Brexit but we have it. This is one of the by-products of Brexit. It would not have been our choice to have to deal with this issue but it is there. In fairness, for the first year or so after Brexit, we can only deal with things on a temporary emergency basis. We do not know how it will evolve in future. It is important that it is there for now. Beyond that I cannot give a further response. I can only acknowledge the points that have been made.

Many people mentioned the zoned land tax. I covered it briefly and I am sure we can have a discussion in more detail on Committee Stage with regard to how much it might raise. It is not designed to raise money. The perfect land tax will be one people do not want to pay so they will get on and build houses and never get levied with the zoned land tax. I want to see movement on houses in order that no serviced site fully zoned for housing is sitting idle. It will be a failure of the building and construction industry if there is a large levy.

I thank all of the Senators for their contributions. I look forward to dealing with the various amendments on Committee and Report Stages.

Question put:
The Seanad divided: Tá, 22; Níl, 8.

  • Ahearn, Garret.
  • Blaney, Niall.
  • Burke, Paddy.
  • Byrne, Malcolm.
  • Byrne, Maria.
  • Carrigy, Micheál.
  • Casey, Pat.
  • Cassells, Shane.
  • Conway, Martin.
  • Crowe, Ollie.
  • Cummins, John.
  • Currie, Emer.
  • Dolan, Aisling.
  • Garvey, Róisín.
  • Hackett, Pippa.
  • Kyne, Seán.
  • Martin, Vincent P.
  • McGahon, John.
  • Murphy, Eugene.
  • O'Loughlin, Fiona.
  • O'Reilly, Joe.
  • O'Sullivan, Ned.

Níl

  • Black, Frances.
  • Boyhan, Victor.
  • Boylan, Lynn.
  • Gavan, Paul.
  • Keogan, Sharon.
  • Moynihan, Rebecca.
  • Ó Donnghaile, Niall.
  • Warfield, Fintan.
Tellers: Tá, Senators Fiona O'Loughlin and Seán Kyne; Níl, Senators Niall Ó Donnghaile and Paul Gavan.
Question declared carried.
Senator Lorraine Clifford-Lee has advised the Cathaoirleach that she has entered into a voting pairing arrangement with Senator Eileen Flynn for the duration of Senator Flynn’s maternity leave and accordingly has not voted in this division.

When is it proposed to take Committee Stage?

Next Tuesday.

Committee Stage ordered for Tuesday, 14 December 2021.
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