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Seanad Éireann debate -
Tuesday, 10 May 2022

Vol. 285 No. 1

Finance (Covid-19 and Miscellaneous Provisions) Bill 2022: Second Stage

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

I take this opportunity to welcome one of the Seanad's esteemed alumni, the Minister for Finance, Deputy Paschal Donohoe. It is good to have him in the House. I had the pleasure of serving a term with him here in the past. I invite him to address the House for eight minutes.

What the Bill before the House does is provide a legislative basis for a number of changes to the main Covid supports that were announced by the Government since the end of last year and that are currently being implemented by the Revenue Commissioners on an administrative basis. Members will recall that the additional public health restrictions in place at the end of last year necessitated additional supports for those businesses most impacted. We are dealing with some other matters in the Bill, such as the tax treatment of payments for decommissioning of fishing vessels and a provision to ensure that the pandemic special recognition payment is made tax-free. We are also going to deal with a number of taxation measures in respect of the cost of living: the excise reduction for petrol and diesel, changes that have been made to marked gas oil and also measures that have been made to deal with, for example, the announcement that the Government made today regarding the 9% VAT rate.

Section 1 deals with the normal definitions that are included in legislation of this kind.

Section 2 of the Bill deals with a number of different changes in the employment wage subsidy scheme, EWSS. This section provides for further enhancements to the scheme in response to public health situations that developed last December and in the early part of the year. The scheme was reopened for certain businesses that would otherwise not have been eligible, as announced on 21 December. Enhanced support was provided to businesses directly affected by the public health regulations introduced in late December 2021, with a delay in the step-down arrangements to such firms that would continue to receive support until the end of May.

As Senators are aware, the temporary wage subsidy scheme, TWSS, and the employment wage subsidy scheme have played a central role in supporting businesses, encouraging employment and helping maintain the link between employers and employees. Over €10 billion was paid under both schemes, with 67,000 employers availing of the TWSS and, to date, just under 52,000 employers availing of EWSS with respect to 739,500 employees. It is an extraordinary number when we consider how many people are at work in our country. Overall, this process has played a vital role in protecting and preserving our economy when it was under such direct challenge due to the economic consequences of Covid-19.

Section 3 of the Bill makes clear that the pandemic recognition payment of €1,000 to eligible front-line health and ambulance workers will be tax-free. This recognises the extraordinary efforts of those front-line workers in supporting our lives and health at a time of such difficulty.

This leads me to the Covid restrictions support scheme, CRSS, which was introduced in the Finance Act 2020, with €727 million paid under the scheme to businesses affected by public health restrictions. Section 4 gives a legislative basis for the final changes announced in response to the public health restrictions of last December. It provides for an increase in the turnover reduction criteria of no more than 25% of 2019 turnover to now no more than 40%. This was made available to newer businesses that commenced trading in the period between 13 October 2020 and 26 July 2021. In addition, certain charities and sporting bodies that carry on similar trading activities to businesses became eligible to apply for CRSS in the most recent period of restrictions.

Tax debt warehousing was introduced in 2020 by the Financial Provisions (Covid-19) (No. 2) Act 2020. At the end of March, more than 90,000 individual businesses were availing of debt warehousing, with €2.9 billion of liabilities warehoused. To put this in context, the total debt eligible is €30.9 billion; 90% of that debt has been paid and the amount warehoused represents approximately 10% of the total tax debt eligible for the scheme. As announced last January, the Government has agreed that the period when tax liabilities arising can be warehoused will be extended to 30 April 2022 for all businesses eligible for Covid-19 support schemes. This will allow businesses that have been most affected additional time to recover before their tax liabilities must be paid. Their period of zero interest will therefore commence from 1 May 2022 and last until 30 April 2023, with interest at the reduced rate of 3% payable thereafter until the debt is paid down. This extension is provided for in sections 5 and 6 and 8 to 11, inclusive.

Section 12 deals with the changes to mineral oil tax to which I referred earlier. Section 13 deals with special exemption orders.

In terms of the Government's response to the bulk purchasing of residential properties, section 14 makes an amendment to address a particular issue relating to social and affordable housing in the context of the 10% stamp duty measure. It is proposed to make provision for a partial repayment scheme for properties designated as cost-rental dwellings by the Minister for Housing, Local Government and Heritage under Part 3 of the Affordable Housing Act 2021. In practical terms, qualifying taxpayers will get a refund of the difference between the 10% rate and the normal stamp duty rate, which in most instances will be 1%. The beneficiaries of this amendment will be those involved in the delivery of cost-rental homes at scale, including approved housing bodies such as the Land Development Agency and local authorities.

The fishing fleet decommissioning scheme is dealt with in section 15.

Section 16 makes provision for the funding of the Central Bank's central mechanism for information on safe-deposit boxes and bank and payment accounts and in respect of the operation of the register of the beneficial ownership of central financial vehicles, which are required as part of the transposition of EU anti-money laundering directives.

The Bill provides a legislative basis for changes to various support schemes for businesses that were announced in December and January, as well as a number of additional matters I have outlined. It underlines the responsiveness of the Government to the needs of businesses for supports while also remaining conscious of the need to carefully manage and restore our public finances.

I welcome the Minister. I am speaking on behalf of my colleague, Senator Maria Byrne. I acknowledge the range of supports the Government has provided since the outset of the Covid pandemic. I thought we were coming to the end of Covid, but, for obvious reasons, it is still in the Title of the Bill. Hopefully, it will be the last time that it will be. That is a recognition of not only the amount of money that has been spent but also the impact that Covid has had on our society. I was a member of Cabinet during that caretaker period and I know that and the Government responded quickly to provide very real supports for businesses, employees and society. That has been proven by how the economy has rebounded, the number of businesses that have survived because of the supports provided and the number of people who are back in employment. It is important to acknowledge that we are back to pre-Covid levels of employment.

I welcome today's Cabinet decision on the 9% VAT rate for the tourism sector. I know these things are difficult. We need to get back to the point where supports are no longer required. There is a particular issue with the 9% VAT rate. We have seen the inflationary pressures on our economy in recent months, and the Government has responded to them. To have prices and VAT increasing in the autumn and winter period would have added to those pressures which have come upon us. Obviously, the impact is especially acute in the hospitality sector. We recognise the reach that the hospitality sector has across the entire country but, in particular, in certain areas of the, including Kerry, where my colleague, Deputy Griffin, has been very strong on this issue. I acknowledge this morning's decision to extend the 9% VAT rate for a further six months.

We are still getting queries as to whether certain categories of employee are eligible for the pandemic special recognition payment of €1,000. The information provided by the HSE indicates that the list is not exhaustive. Is there a central point from which we can get absolute clarity on whether somebody involved in catering, for example, who may or may not have been under the employment of the HSE, perhaps for a section 38 entity, is eligible?

Is there a direct point of call to which we can go? Presumably, some of these €1,000 payments have been paid. It was paid in a case in Beaumont according to the information I have. Presumably, all of these will be backdated. If they have been paid, the fact that they are exempt from tax will be retrospective, if you like. I presume that is the case. We received a comment today by email from somebody querying when the Act will be enacted and whether the law will be backdated to cover payments already made, which I assume is the absolute case.

I refer to some of the other issues and the supports that have been put in place. Obviously this about ensuring the special arrangements are compliant by the end of the tax year. That is all very welcome. I suppose it is tidying up what we know to be the case and what was announced previously rather than any new initiatives to ensure the waivers and other issues have been tidied up. That is important.

I also welcome the changes made regarding the duties on fuels. Again, there were, of course, inflationary pressures based on the fact that we are price takers in relation to oil and hence petrol and diesel. This has been exacerbated, of course, by the situation with the illegal war in Ukraine. Obviously, these things must be continuously monitored.

I know the Minister will be starting preparations for the next budget, which will be different from this time last year. I will not say we were at the height of Covid-19 but we were certainly still very much impacted by it this time last year. Obviously, we did not have the situation we have at the moment in Ukraine. Inflationary pressures and cost-of-living issues are real. Government has acted and provided those supports but it is something I know the Minister will be keeping under constant review with regard to what is allowable under the financial situation we are in and what is possible under the EU laws as well.

There is uncertainty with regard to the supplies of gas, for example, although not so much here, because we do not get it from Russia. The knock-on impacts of any supply changes that take place over the course of the year, however, could have impacts on the wholesale price of gas next autumn. I have heard projections. These issues are still very real.

I know the Minister is up to speed and keeping an eye on matters in his role in the Eurogroup as well. The Government has done much to support businesses and job creation and retention and has provided a range of supports in respect of the cost of living. As I said, this must be constantly kept under review. It is a real dilemma, which I know the Minister understands, and a real issue in households up and down the country.

The Minister is very welcome to the House. I welcome this Bill. It is prudent that we examine our financial status in the wake of Covid-19 and seek to "put the debt ratio on a downward path", as the Minister told the Dáil last week. The Bill comprises a number of assorted financial measures and tweaks. A miscellaneous Bill always affords a useful opportunity to deal with multiple issues at once. I would like to discuss a few of those with the Minister.

As president of the Eurogroup, can the Minister update us on what progress has been made in this country in preparation for the minting of the digital euro? I understand the European Central Bank, ECB, is actively investigating the prospect having published a report on payment preferences in March as part of the current phase. The Central Bank of Ireland has done some looking into central bank digital currencies, which would enable its users to have access to widely accepted, safe and trusted means of payment for the digital age. Recent global events have given rise to concern over State control of private finances, however. The extra judicial freezing of assets and transactions by the Canadian Government of individuals deemed associated with anti-Government protests provide a chilling case study in the abuse of centralised power. In the Minister's opinion, what protections in this area would be necessary to ensure the continued financial autonomy and privacy of Irish citizens?

Section 12 of the Bill allows for a refund on the increased level of stamp duty levied on bulk purchase housing, regardless of whether that housing is subsequently used as cost-rental housing. I share the opinion of many that last year's increase in stamp duty was not sufficient in dissuading real estate investment trusts, REIT, from bulk purchasing residential properties. I sincerely hope this clause will not undo even that small measure. I understand this is only in relation to cost rental as per the Affordable Housing Act 2021, but we are all aware of the unintended consequences of legislation, particularly in all areas as complex as housing. This comes at the same time as the announcement of the new €500 million fund aimed at granting developers up to €120,000 per apartment in order to unblock stalled developments and make the building of apartments financially viable for developers. It is moves like this that make people think the housing market is being propped up and that we are in for a nasty shock at some point in the future.

Across the pond in the US, the biggest financial firms are beginning to use the word "recession" in light of the continued inflation trends. The country's GDP shrank for the first time since the start of the pandemic. Another quarter of downward trends will meet the technical definition of a recession.

Last week, Deutsche Bank became the first major bank to call an impending recession in America. History shows that any sort of a collapse in a key player like the United States has its impact felt the world over. The question then is: what are we going to do to prepare? What is the Minister's outlook on the global financial near future in terms of inflation and recession? What steps are being taken on foot of it? Maybe these issues are beyond the scope of this Bill or perhaps some provisions are simply more miscellaneous than others. I would be most grateful if the Minister could address them.

I welcome the Minister to the House to discuss the Finance (Covid-19 and Miscellaneous Provisions) Bill 2022. As Senator Kyne said, let us hope that the term "Covid-19" is in our rear-view mirror and is not to return again. As the Senator said also, when we look back, we will see what the Government did with the significant supports it gave businesses to survive during the last two years was, in fact, incredible, which most in the business community will acknowledge. While we did not get everything right, we got the majority of things right. The pandemic unemployment payment, PUP, was able to sustain people. Much credit must be given to the Government in respect of how it reacted over the last two years.

I will mention several of the schemes available to help businesses survive. The employment wage subsidy scheme, EWSS, was one of the main ones. We started with the temporary wage subsidy scheme, TWSS, which I believe was availed of by 67,000 businesses and 690,000 employees. When the EWSS came in, a smaller number of employers but a larger number of employees availed of it. It is important to point out how important it was in keeping employees in work and in supporting businesses. We then had the Covid restrictions support scheme, CRSS, which allowed businesses to offset some of the additional costs they were incurring over the period.

The tax warehousing was a huge benefit to some. As the Minister said, it was only 10% of the total taxes businesses applied for. I think 90,000 individual companies applied for it and €2.9 billion has been put into warehousing. The challenge for businesses now is that they must pay that off. That is an added burden on some of the businesses. None of us anticipated during Covid-19 that when we came out of it, we would end up with a cost-of-living crisis, and on top of the cost-of-living crisis, we would have a war in Europe that would add significantly to the cost of doing business.

The Government has reacted as best it can. There is no point in standing here and saying it can offset every cost. No Government can offset every cost. The Government has taken a very good approach. Initially, it targeted supports to the most vulnerable in society to help them through the cost-of-living crisis and then it had targeted measures through the excise duty and the VAT on fuel and gas. Those measures must be welcomed also. Overall, I very much welcome this Bill, which went from a Covid Bill to a cost-of-living Bill to a war in Europe Bill. It gave the Minister the vehicle to allow him to bring in certain measures that will help offset costs in the future.

I will conclude on a positive note. A number of colleagues mentioned the Minister's announcement today on VAT in the hospitality sector. As he is aware, I am directly involved in hospitality. The measure was greatly welcomed by everybody within our sector. It is very important that we maintain the 9% VAT rate, especially when we add in the cost of living, because it is all about our margins, which were tight, and they got tighter with the cost-of-living increases. It is important that we have the security of retaining the 9% rate for at least another six months and then we might even discuss extending it a bit longer. When we look at the VAT rate on hospitality, we seem to be spending more time at 9% than we do at 13.5%. I wonder if the true rate for the hospitality sector is at the lower one rather than the 13.5% rate. Overall, the Government can take credit for how it has handled the previous two years and the current cost-of-living crisis. We support the Bill.

Cuirim fáilte roimh an Aire. We are always asking for more, but I do want to give credit where it is due. I do not envy the Minister his role as Minister for Finance in the past couple of years. First, I thank him for sticking with it and doing as much as he could within the remit and the budget we have.

I wish to highlight a few points relating to the Bill. It is important to say that the unemployment rate is very low currently, at 4.8%, despite war, Covid and inflation. That is something we as a Government, and the Minister for Finance, must take credit for. We have delivered the right level of supports for businesses which suffered throughout the pandemic and are now emerging from it. The Minister outlined that €16.5 billion was made available to support businesses, employees and those who were left unemployed by the pandemic. Nearly every day, a small business owner has asked me to thank the Government because measures such as the EWSS were a lifeline. There is always more, and people are always giving out, but it is good to stop and take stock and appreciate the fact that there is a lot of gratitude out there for the Minister and the work he has done.

The pandemic special recognition payment should also be acknowledged. Front-line health workers, workers in nursing homes, hospices, hospital cleaners and porters, as well as Defence Forces personnel involved in testing and vaccination centres, were all eligible for the payment. This will also be provided to student nurses on a pro rata basis. I thank the Government for not applying tax to the payment, as it would have meant the payment was reduced by about half. That was a good move as well.

I also want to highlight the cost-rental scheme. This is something the Green Party, of which I am a member, has been bringing forward for a long time. The Bill provides for a partial repayment of stamp duty, charged at the higher 10% rate for residential dwellings designed as cost-rental dwellings. Unfortunately, everybody feels under pressure in this country to own their home. That is mainly because, unlike most of mainland Europe, there is very little fixity of tenure and rents are very high. The cost-rental model the Government has initiated is going to be a game changer because friends of mine, who live all over Europe, do not feel the same pressure to own a home because they have fixed tenure and their rent is based on the cost of the build, as opposed to market value. That is something very important which we have brought to the Government.

It is a positive move to reduce stamp duty. A temporary reduction in the rate of VAT on gas and electricity from 13.5% to 9% was a major win as well, because while we cannot control the cost of fossil fuels, that is a measure we can introduce and it is good that we did it.

A Bill is waiting on the desk of the Minister's colleague, Deputy Peter Burke, which is part of the cost-of-living crisis. We need to take it seriously and bring it in before the summer recess. I am afraid that we will not get it through on time. It will put money in the pockets of farmers, schools and community groups. I refer to the photovoltaic solar Bill my colleagues and I in the Green Party have brought to the Seanad. It will reduce the cost for farmers. We cannot help farmers in every way because their costs have become so astronomical, between nitrates and diesel, but this is one way we can put money back in their pockets and reduce their bills. It is very important. I know from this Bill that this consideration is also important to the Minister, so I ask him to raise the issue with his party colleague. As someone who lives in north Clare, where most of our jobs are in hospitality and tourism, the VAT rate of 9% is crucial. I thank the Minister for his work.

The Minister is very welcome. I welcome the opportunity to speak on this legislation, which I hope deals with the last item of Covid legislation we will need as we emerge from the pandemic. It is important that we remain on our guard in respect of this, because we know the virus is still in our community and we cannot accurately predict the mutation of the virus in the time ahead, but we can hope that the worst of it is over.

The Bill mainly provides for the Covid-19 financial measures that were put in place following the outbreak of the Omicron variant. It will give legislative effect to the changes to certain Covid support schemes announced by the Government in December 2021 and January 2022. Sinn Féin supported those measures at the time, and we continue to support them.

The Bill provides for the reopening of the employment wage subsidy scheme for businesses which would otherwise not have had access to the scheme at that time, as they would not have been eligible, and that such businesses can continue to be supported until the scheme expires. The legislation also provides certain businesses which are no longer eligible to re-apply from 1 January from this year, a measure we proposed and supported.

The Bill also provides for businesses that were directly impacted by public health measures, introduced in December in response to the variant, such as the 8 p.m. closing time and the 50% capacity restriction to be able to avail of enhanced rates for the month of February with a more gradual and tapered step-down out of the scheme. Again, this is a measure we welcome.

The tax debt warehousing scheme has been crucial to support the liquidity of businesses. I welcome the extension of both the repayment dates and the interest-free period.

Another measure relating to the pandemic is the bonus payment to health workers, which is also included in the Bill. It is quite unbelievable that the Government would announce a bonus and five or six months later not one health worker has yet received the payment.

I would also like to mention family carers. It is terribly sad that family carers who went through such isolation, as services and respite were cancelled, who worked tirelessly night and day looking after and protecting their vulnerable patients, have got little or no recognition from the Government at all. We all know the work and services they provide. In their own way, they were front-line workers. For the life of me, I cannot understand the Government's unfair treatment of family carers.

As I indicated, Sinn Féin continues to support this legislation but we will put forward amendments on the next Stage, because my colleague, our finance spokesperson, Deputy Pearse Doherty, proposed amendments in the Dáil that I do not believe got enough consideration. It was a missed opportunity. I hope the Minister will reconsider them in the light of the ongoing cost-of-living crisis, especially with regard to the rising cost of fuel.

Right down the west coast, 66% of people, or two out of three households, depend on home heating oil as their primary source of heating. Recently, home heating oil has reached astronomical prices. It cost €1,700 in March to fill a tank with oil. The price has more than doubled in the space of a year and many households cannot bear this cost. With Deputy Doherty's amendment, we propose to reduce the cost of filling a tank by €118. Many households simply cannot bear these price increases. Not only do households feel they have been forgotten by the Government, they feel they have been punished by it when the increase in carbon tax was allowed to go ahead. We also introduced proposals to reduce the cost of petrol and diesel.

The measures and legislation we have seen during the past year and addressed in this Bill show that there can be flexibility and, where there is a willingness, there is a way to meet the needs of society. Sinn Féin recognises that the Government cannot shield everyone from every price increase; however, we are fully aware that the Government can and should do more to support low- and middle-income households which, without support, cannot withstand these price increases without significant hardship.

I welcome the Minister to the House. We too very much welcome and support the Bill.

As stated by Senator Casey, this is, hopefully, the final piece of Covid legislation to come before us, but it reflects what can be done when there is political will to save jobs and keep businesses afloat. While there were some difficulties in the early days in terms of Government not supporting non-rated businesses, that was resolved last year through later iterations of the CRSS payment.

I welcome the revisions in the Bill. I am conscious that thus far there has been a significant amount of debate around some of the detail in it. There are two issues I would like to touch on, the first of which relates to the Covid recognition payment. We are very supportive of this important payment and we welcome that workers will get the full net benefit of the payment because of the tax measures provided for under this Bill. However, it is important to reiterate the message conveyed by Senator Kyne that there is confusion and concern about the limited nature of the payment and to whom it will be made. A very narrow view has been taken by Government as to who should be entitled to it. We learned in April that those working in acute hospitals, vaccination and testing centres and section 38 organisations will get it, but there has been no update with regard to staff of section 39 organisations, those working in long-term residential home care services or voluntary and private nursing homes. While private nursing homes should, perhaps, look to themselves to better pay their workers, there is a real issue within section 39 organisations who are reliant on the State for their resources. The Government needs to step up to the mark and ensure that the Covid recognition payment is provided to those workers as well. Ultimately, many of those workers put their lives and the health and lives of their families on the line so that they could support the most vulnerable in society. The message today to the Minister, as a senior Minister in the Government, is that the Government needs to make an announcement, sooner rather than later, on the comprehensive list of workers eligible for this payment and it needs to be generous in spirit in ensuring the net is cast as widely as possible.

I will move on to the second issue. The extension and changes to the EWSS are welcome, but my colleague, Deputy Nash, and I retain a very deep concern about the failure by Government to effectively clawback EWSS payments that were not necessary. We know from replies to parliamentary questions from Deputy Nash that €267.8 million was given to firms to support wages and that some of those firms then went on to file dividend withholding tax returns. While we know a small number of those firms have made repayments and that a large number of them had made partial repayments, there remains a large number of firms that have pocketed the supports provided by the State to keep their businesses afloat yet at the same time they were able to pay dividends. That sends out an exceptionally poor message around the use of public resources to keep businesses afloat. I recall that last year the Revenue Commissioners approached a number of families who had childminders as employees. Those families did the right thing by those in their employment and put them on the EWSS, but months later they were told the employees did not qualify and they would have to repay that money to the Revenue Commissioners. Many of those families have limited resources so having to repay that money was an enormous challenge.

I have not had an opportunity to express my condolences to the Minister on the passing of his mother. By all accounts, she was a fantastic constituency canvasser in her time and, obviously, very proud of all of the Minister's achievements. I express my sympathies to the Minister and to all of his family.

I welcome the Minister to the House and I thank him for his stewardship of the Department of Finance. I congratulate him on listening to the views of many and on his own vision in terms of the extension of the 9% VAT rate in the hospitality sector. Retention of that rate is important in terms of jobs and people. If the Minister were to listen to the dystopian view of the world from Senator Gavan one would imagine the Government we are part of and support has done nothing to help anybody, to assist, to promote or ensure that the infrastructure of the State was wrapped around employers, employees, workers and their families. At a time when people needed the State, Government acted responsibly and with a vision. Throughout the world, that was acknowledged.

The vast infrastructure was necessary because at the heart of what we are as an economy and as a people is jobs and investment in our cities and towns in rural and urban Ireland. As a world and as a country, we need to reflect on where we have come from since the pandemic began. Senator Casey spoke about this being the final Covid-19-related Bill. The pandemic has changed the world view and our view of work, the workforce, the workplace, what it means to be an employer and what it means to be a worker. We talk about the future of Europe. The future of work in our country and in the world is an issue on which we need to have a real and serious conversation whatever our ideologies. The world of work has changed and the workplace has changed. We can cast our minds back to the simplicity of the commute into Dublin from Cork to attend at the Oireachtas, at a time when traffic was at a trickle. Today, it is back to pre-pandemic levels despite the Government having invested in public infrastructure to bring about a modal shift from the car to public transport.

We never thought phrases such as "working from home" or "remote working" would become part of our lexicon and part of the daily lives of so many people. For many, the work-life balance has improved. Virtual meetings, flexibility and so on have all become part of the nature of work and of jobs. That is important. Equally important are the figures articulated by the CSO, which show an unemployment rate of 4.8% this April compared to 7.5% last year. This means we have an economy that is growing, notwithstanding the cost of inflation, the cost of doing business,the cost of living increases, the gargantuan war in the Ukraine and the troubles associated with that and the changing world. The growing employment figures present a stark question to us in regard to particular sections of our economy. We need to have a real conversation about that. There is a real need for those of us on the Labour Panel in the Seanad to have that debate. There are many vacant posts in the hospitality sector. People will not take up jobs in the sector even though the rate of pay is above the minimum wage. We can have a debate on the living wage and the minimum wage as part of that conversation, but we need to know what that is the case. People in the industry say the lack of attractiveness in terms of not being able to spend more time at home and the requirement to work unsociable hours are part of the draw away from the sector.

I acknowledge the work of the Minister for Social Protection, Deputy Humphreys, in regard to jobs week, under which 40 different events will be held around the country. It is an important piece of work in terms of her brief as Minister for Social Protection. The Minister, Deputy Donohoe, along with the former Minister, Deputy Bruton, and their associated Departments remodelled the world of work. The Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Varadkar, is continuing that work now in terms of the local enterprise offices and so on.

The CSO figures show that 84% of businesses survived Covid-19, 10% remain at risk and 6% have closed. The Convention on the Constitution - Citizens' Assembly is discussing a myriad of important issues.

I contend that we need to have a national conversation, in a constitutional convention or citizens' assembly and in tandem with the Houses of the Oireachtas and the Labour Panel of the Seanad, on the future of work. There is a real need for it. The Minister for Further and Higher Education, Research, Innovation and Science is challenging all of us regarding both the role played by apprenticeships and making them more accessible. I wish I had more time. I received a very interesting email from a friend of mine who is a builder about trying to get tradespeople and others into the building industry and construction sector and how he thinks the Government can help. This is important legislation.

I commend the Minister on his stewardship and his proactivity. We should not just look at Covid-19 through the rear-view mirror and learn nothing about the world of work. We need to embrace what has happened, remembering that we need the employer and the employee. We cannot have one without the other. I thank the Minister for being here.

I will reply to the points made by different Senators. Senator Kyne inquired about the taxation of the pandemic recognition payment and whether tax can be alleviated on payments that were made in the past. The pandemic recognition payment should not have had taxed paid on it. When the Government made the announcement on it, we implemented it on an administrative basis through the Revenue Commissioners. This legislation gives legal effect to that. Anyone who has contacted the Senator about that €1,000 payment should not have paid tax on it.

The Senator also spoke about the extension of the 9% VAT rate, which was referred to by a number of other Senators as well. The rationale for the extension we have made today is that we recognise we are already in a position of rising prices and to increase VAT on top of that later in the year could be a step too far for many businesses, particularly when we are in the final stage of the employment wage subsidy scheme. There are many businesses that were receiving between €200 and €350 in respect of each employee on 1 December. By 1 June, it will be zero. While that is an appropriate and much-needed exit from this scheme, we also recognise that for many employers it is a very significant economic effect. I hope that the extension of the VAT rate gives a bit more certainty to businesses, and hospitality businesses in particular, at a time when they are exiting from a significant scheme that kept them going when we asked them to close.

Senator Keogan referred to the digital euro and asked about the risk of recession. It is worth acknowledging that, from a European point of view, even in the most severe economic scenarios published by the ECB, the economy of the euro area, that is, all those countries that share the euro, will still grow by above 2% this year and next year. The European Commission will be revising its forecasts regarding growth for this year and next year in a few weeks. Even with the significant changes happening in monetary policy at the moment, we will still be in a situation where the Irish and European economies are growing. They will just be growing at a very different pace to what we thought possible before this awful war in Ukraine added to the inflationary and supply chain pressures that we were already under.

On the digital euro, we are in the very early days of that project. Privacy has been recognised as a key concern by the ECB. In the public survey it conducted regarding the future of a digital euro, privacy was the number one issue participants raised. That is well understood by the ECB as it looks to the future of that project. An area on which the Senator and I would probably differ is that I believe we must be clear, as we develop a digital euro, that it is not about trying to liberate currencies from the State. That is certainly not what I would view it as being about. I am very sceptical about some of the wilder claims that have been made about the future of crypto and digital assets. The ability of central banks and governments to be the sole issuers of currency is something we must protect and is an essential part of the stability economies need in order to grow.

Senator Casey also touched on the 9% VAT rate and made a point about the cost-of-living pressure that many businesses and households are facing at the moment. As he said, the Government has done much already to try to help those who are coping with these new pressures. Everybody will always want us to do more but it is clear from the era of Covid that if we had done all we were being asked to do at that point, we would not be in the position we are now in, where the national finances are allowing us to do the additional things we are doing with the cost of living. We have to try to get the balance right between the demands we are facing today and the need for our public finances to be safe tomorrow. Every measure taken is criticised by some for not being enough and by others for being too much. You have to try to get the balance right and that is what we are here to do.

Senator Gavan reiterated some of the criticisms of these measures that have been articulated by his party in the Dáil. He referred to some of the things we are doing as punishing families. Far from it. We are trying to help families and businesses at a time when they are facing new pressures in the aftermath of a pandemic. There is a general understanding that the Government can help and is trying to help but the only money the Government has is the money we collect in taxes or money we borrow. There is no pot of money that I am not using because I am not compassionate enough to help people at a time of need. The money we have is either money we must repay or money we collect in taxes. We are doing as much as we believe is affordable to help those who are feeling the effect of the rise in the price of energy.

Senator Sherlock referred to the Covid recognition payment. I understand the Department of Health will be issuing a guideline and a circular regarding who will and will not receive the payment. This is imminent and will happen very soon. The majority of people who can receive the payment have already received it. We take a different view on the ability of companies to pay dividends while also being on the EWSS. When I implemented this scheme, the sole criteria was turnover and whether a company was tax-compliant. My view was that if we brought in an additional measure regarding the level of profit companies could or could not make, it would have undermined the ability of this scheme to protect employment and undermined the ability of employers to be viable as they exit from the pandemic. It is the case, as the Senator said, that some companies were profitable during the pandemic, but those profits would have been at far lower levels than in pre-Covid times. Surely profitability on the part of employers is a sign that they can be viable in the future, can retain the people they have in employment at the moment and will even be able to hire and employ more people in the time ahead.

The number of companies which were profitable, let alone able to pay a dividend, is a small number relative to the total number of employers the employment wage subsidy scheme helped and protected.

Senator Garvey made the point about the pandemic recognition payment. I have acknowledged that and have tried to deal with some issues about it.

The rate of 4.7% is an extraordinary level of unemployment given all that our economy has gone through. I remember being in this House at times when we were making changes to the employment wage subsidy scheme with 600,000 people on the EWSS and hundreds of thousands of people on the pandemic unemployment payment. We have really come some way. However, as always, we need to look to the future and see how we can do better and guide our economy and our society to a better place.

Part of that will be the point that Senator Buttimer touched upon regarding the future of work. He already touched on the enormous change under way regarding work and workplaces in our economy. There are tremendous opportunities for the Irish economy overall, particularly for the distribution of employment. I am really encouraged when I meet colleagues who represent constituencies containing a significant share of towns. They point to the growth in confidence and the increase in employment happening there as we see some work that was happening, for example, in Dublin where we already had very high economic growth and very high employment growth, now being allocated throughout our country. That is an enormously positive development for our country overall. With the national broadband plan and the work that the Minister, Deputy Humphreys, is doing, we need to continue to support that trend which is full of opportunities.

We also need to be conscious of how we can have younger people who are enjoying employment for the first time participate in the environment and learn the skills that are at the heart of an economy which we want to be productive. As the Senator said, we are not just a people economy but also a skills economy. We rely on workplaces to provide the learning and development that is needed to allow those skills to continue to develop in the future.

A number of Senators said they hope this is the last Bill we ever need to debate that contains the word "Covid". Nobody hopes that more fervently than I do given the amount of emergency Covid legislation we had to introduce. Above all, it is not about weary legislators dealing with numerous pieces of legislation related to Covid, instead it is about the hope that people are never again forced to shut their businesses and make people unemployed due to this pandemic and that from a health point of view, we can put the darkest days of this pandemic behind us. It may not have gone away, as a number of Senators have said, but I think we can have confidence about our ability to treat this as a serious and highly infectious disease as opposed to pandemic that closed down our country for so long.

I again thank the Senators for the points they have made. I look forward to being back here next week to deal with Committee and Report Stages.

I thank the Minister for his comprehensive and individualised response, which is much appreciated.

Question put and agreed to.

When is it proposed to take Committee Stage?

Is that agreed? Agreed.

Committee Stage ordered for Tuesday, 17 May 2022.
Cuireadh an Seanad ar fionraí ar 5.44 p.m. agus cuireadh tús leis arís ar 6.37 p.m.
Sitting suspended at 5.44 p.m. and resumed at 6.37 p.m.
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