Finance Bill 2012: Second Stage (Resumed)

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

I thank the Ceann Comhairle for the opportunity to speak on this Bill. It is a hugely significant and influential Bill that determines the economic affairs of our nation, not just for the upcoming year but for years to follow. It is this far-sighted and strategic approach, in conjunction with other proactive measures introduced by this Government, which will stimulate economic recovery and create sustainable economic growth.

The Bill will not produce returns tomorrow, much to the delight of some recent national commentators. However, it is part of a plan that will help reignite Ireland's entrepreneurial culture. In conjunction with other measures it will give Ireland the best chance in a highly competitive world and foster opportunities to create jobs. In these times of international familiarity the emerging power and economic strength of the BRIC countries is frequently mentioned. These countries, Brazil, Russia, India and China, make up 42% of the world's population and have a combined GDP of $18.486 trillion.

It is in this light that the innovative tax measures for employees who travel to develop markets for their products and services in these countries should be seen. This is a far reaching initiative brought in to assist Irish business in targeting growing world markets. This epitomises the strategic and shrewd application of economic intelligence by this Government.

International research confirms there are benefits to be gained from identifying and supporting high-performing enterprises. That is what the Minister for Finance, Deputy Noonan, has done by placing a firm focus on Ireland's indigenous sector, with the aim of driving exports, research and innovation.

The Bill has received many column inches over the last few days and it is not for me to itemise and scrutinise each measure in the Bill. Nonetheless there are great boosts for industry sectors such as the health and life sciences, the green economy, agrifoods, digital games, tourism, international financial services, education, construction and the retail sector.

In addition to the incentives brought in, there are also some measures aimed at deterring fraud and strengthening the powers of Revenue. As part of the fight against the illegal trade in marked fuel, the Bill envisages the creation of new licensing requirements for those who trade in marked fuels for such purposes as home heating or agriculture. Authorised Revenue officers are also to be given powers that were given to the Garda by the Criminal Justice Act 2011 whereby the District Court can order the production of certain documents or information which the officer convinces the court could assist the investigation of an offence.

The mixture and balance of measures contained within this Bill will collectively assist Ireland's transition from recession to growth. This Bill is a real effort to put some steel back into Ireland's entrepreneurial ambitions and inject energy and imagination into the way we do business, both at home and globally. As a result I have no hesitation in commending it to the House.

I welcome the opportunity to speak on the Finance Bill and I commend the Minister for introducing it. The Bill will give effect to a number of measures announced in the budget in December. There are welcome measures in the Bill but there are also difficult choices that must be made. However, it is clear the Government has done its utmost to protect the most vulnerable in society and to help those who are most in need.

This is particularly true of the changes made in mortgage interest relief. Mortgage arrears are a serious matter and affect people across the country on a daily basis. Statistics from the Central Bank show more than 62,000 mortgages are now in arrears for more than 90 days, figures that give us an insight into the scale of the crisis we face. The Bill will allow for mortgage interest relief to be increased to 30% for first time buyers who purchased their homes between 1 January 2004 and 31 December 2008. It will be of significant benefit to those who bought their homes at the height of the boom.

Inevitably, there will be those who purchased their home just outside this time frame and they will not be entitled to the special rate of 30%. Unfortunately, a line had to be drawn somewhere. The aim is that the applicable time-frame will cover the period when house prices were at their peak, which is to be welcomed. I further welcome the fact that mortgage interest relief will be available at a 25% rate for first time buyers in 2012 because this should act as an incentive to young people who are looking to get on the property ladder.

The measures outlined will be of significant assistance to many people who are encountering problems with their mortgages. During the debate on the Keane report some months ago, the point was made that the objective of the Government must be to assist those who have genuine difficulties in meeting their mortgage repayments. That goal remains the same. The mortgage crisis in this country is different and must remain at the forefront of the Government's plans. In this regard, the publication of the personal insolvency Bill is a welcome development and should offer further assistance to homeowners who find themselves with an unsustainable mortgage.

Since taking office the Government has consistently sought to reward and incentivise work. One of its first actions was to reverse the cut to the minimum wage, which was introduced by the previous Government. The Minister has been consistent in trying to protect low earners, which was again demonstrated by the increase in the exemption threshold for the universal social charge. This means anyone who earns less than €10,036 will not have to pay the charge, which will have a positive impact on more than 300,000 in low paid jobs, particularly part-time workers and students.

At present the universal social charge hurts the lowest paid. In some circumstances it acts as a deterrent to taking up employment because by the time it is deducted from a person's wages, that person might be as well off on jobseekers' allowance. This situation cannot be allowed to continue as it discourages employment. Ultimately, the State and the taxpayer will pay the price for that.

One of the most welcome aspects of the Bill is what it does not include. There will be no increases in income tax. The Bill will not affect people's take home pay and that is welcome because it incentivises employment and encourages spending. As we are all aware, we live in difficult financial times, which means that tough decisions are unavoidable. As a Deputy from Cavan-Monaghan, in the Border region, the increase in VAT from 21% to 23%, which took effect on 1 January is not particularly welcome but I recognise that we cannot avoid making these decisions. It should be remembered a commitment to increase VAT by 1% in 2013 and a further 1% by in 2014 had been agreed by the last Government, therefore, this move simply brings the increases forward.

As the Minister stated, for the majority of the last 20 years, the VAT differential between the Republic and Northern Ireland has been 3.5%, rising to as much as 6.5% as recently as 2009. After this increase, the differential will be 3%, so there is no major change. It should be remembered the VAT on goods and services in the tourism sector remains at 9%. This measure, that was introduced as part of the jobs initiative last July, applies to hotels, restaurants and leisure facilities and is significantly lower than the VAT rate on similar services in Northern Ireland. We are, therefore, ideally placed to benefit from an increase in visitors from Northern Ireland and, as always, life on the Border has its ups and downs.

A further welcome measure in the Bill is the special assignee relief programme. This measure is a tax incentive aimed to encourage skilled individuals to take up a position in an Irish-based company and is a case of encouraging those with the necessary skill-set to come to work in Irish companies.

There is provision in the Bill to strengthen Revenue powers to combat the criminal laundering of marked oil, where a marked fuels trader's licence will be required for every trader producing, holding, dealing in or delivering marked gas, oil or kerosine. The issue of diesel and oil laundering is rampant in the Border region, particularly in County Monaghan. It is a situation that must be addressed urgently. I support any measures that will provide the Revenue Commissioners with sharper teeth to police the matter.

I support this Bill. It contains a number of measure that will be of significant benefit to people. The Government has adopted a fair approach in that the lowest paid and most vulnerable are protected.

I welcome the opportunity to speak on this Bill and would like to thank the Minister for bringing it Bill to the House. With 450,000 people unemployed, the main focus of everything the Government does must be concentrated on reducing this figure, not only because of the cost to the State but also because of the physical and psychological effect that unemployment has on people and families. If we are to achieve the much needed growth in our indigenous economy we need new business and 70% of the jobs required will come from the SME sector. We must encourage the entrepreneurial spirit and boost confidence in people. I compliment the Minister for Enterprise, Jobs and Innovation and the Minister of State in the Department on the action plan for jobs which was launched on Monday of this week. The action plan is both exciting and innovative and will have an effect on the ground.

The budget is one of the many ways of influencing the economic environment so that businesses can expand and jobs can be created. Budget 2012 introduced a number of targeted measures designed to support job creation in key sectors of the economy. It also aims to enhance the attractiveness of Ireland as a destination for multinational companies. To that end, I welcome the Government's decision to work with EMC, a large multinational company from my own constituency of Cork North-West. EMC launched a cloud computing initiative earlier this week which will use the Government network as a test bed for cloud technology. Cloud computing will contribute significantly to making it easier and cheaper to conduct business in Ireland. If we are to capitalise on all that Ireland has to offer, we need to encourage start-ups and help the businesses that already exist to expand further. This initiative by EMC, together with the Government's action plan on jobs, will reduce costs and red tape for businesses and help get our people back to work.

The approach adopted in the budget and in this Finance Bill is to use the limited available resources we have through specifically targeted measures. These measures are focused on areas with the best employment potential and return on investment of public money. This is in line with our Taoiseach's vision to make Ireland the best small county in the world in which to do business by 2016. It is a challenge when the amount of money available for stimulus is restricted by our economic circumstances and our agreement with the troika. However we have learnt that throwing money at problems without a strategy does not solve them, it just creates different ones.

The clear measures that are targeted in this Finance Bill are welcome. There are a number of them in particular that stand out that will help job creation. The special assignee relief programme targets the assignment of key foreign-based individuals to the Irish-based operations of their employers. This will enable Irish operations to attract key specialised individuals around whom teams and processes will be built while providing much-needed experience and skills, especiallywhere skills gaps have been identified, such as digital gaming. It is worth noting that when we import people with specialised skills, five new jobs are created in Ireland.

The research and development tax credit will allow companies to reward key research employees by transferring a portion of the tax credit. This is a good measure to help Irish companies in finding new markets for their goods and services. This will help drive our export-led economy and will raise Ireland's profile in the BRIC countries.

Another measure is the extension of the tax relief for corporate investment in renewable energy generation to 2014. We all know the challenges we face in the generation of sustainable energy. Promoting renewable energy generation will have a positive knock-on effect on job creation.

To help the export sector, there is a modification of the tax treatment of foreign-sourced dividends which allows for the extension of the 12.5% tax rate to dividends from non-treaty countries which have signed the OECD convention.

For the software industry, there is an improved relief for excess foreign tax on royalties. While technical, it is another business-friendly measure that is being implemented.

In the SME sector, the amendment and commencement of the employment and investment incentive will help to raise much-needed finance in many new sectors.

For start-ups, the extension of the tax relief and also the broadening of seed capital relief will boost the number of entrepreneurs. Helping these start-ups is crucial.

The changes in stamp duty, capital gains tax relief, stock relief and the double deduction for carbon tax will encourage young farmers back into farming, which was forgotten during the Celtic tiger. We now recognise how valuable this sector is to our economy and how important it will be for our future success.

All of these measures, in addition to many others, are evidence of what has been done by the Minister for Finance, Michael Noonan, at a time when our county is strangled with debt. This has been achieved without increasing income tax and by reducing the universal social charge and increasing mortgage relief, as promised in our programme for Government.

These measures, together with a more positive outlook from the media, would help give confidence to the people, which would in turn boost the domestic economy. I commend this Bill to the House.

I wish to share time with Deputy John Browne.

Is that agreed? Agreed.

I welcome the opportunity to contribute on the Finance Bill. While it is important that the Parliament deals with it and the budget, it is worth noting that this Bill does not go far enough in addressing the economic crisis.

Yesterday's jobs announcement was a reheated version of a series of other announcements. Between the two documents, there is nothing particularly new. The Government, when it came to office, identified, along with everyone else, the lack of jobs and the level of emigration. Prior to the election the NewERA document was produced and it was to result in 100,000 jobs. Last April a series of measures was announced that would create 100,000 jobs by 2015. Yesterday's announcement again referred to 100,000 jobs. I am not sure whether they are the same 100,000 jobs or whether they are in addition to those referred to in the NewERA document. The deadline for creating the 100,000 jobs has now been extended to 2016. I see no measure in this Finance Bill that would in any way indicate that the framework exists to create the jobs.

I am not being critical of the people opposite, who have a difficult job. The Minister of State, Deputy John Perry, is doing his best for small businesses in a very difficult environment.

Deputy Dooley should read the document.

It is a very difficult environment in which to try to support and nurture the small entrepreneur and medium-sized enterprise. The reality is that the pillar banks that have been identified by all sides are, sadly, not providing the cash. They talk about doing so. When we were in office, we put in place a certain rigorous regime that would have required the banks to lend up to €12 billion over a number of years. Sadly, based on the cases I encounter in my constituency office, much of this has been reworked. People's overdrafts were removed and incorporated into loans that were presented as new lending. The banks have played ducks and drakes with the Government and did the same when I was in government. They are continuing to do so. Unless we find a way to increase the credit available for genuine small and medium enterprises, we will be in real trouble. I wish the Minister of State well with that endeavour; it will certainly not be easy. This is the area we need to tackle.

Reference was made to the loan guarantee scheme. It is not as easy to implement as was suggested prior to the election. I take on board the comments made by a number of Government spokespersons in recent days on the difficulty in ensuring it is implemented effectively. Unless we can restore confidence among the small and medium enterprises to allow them to get over the hump, there will not be a return to growth. Without a return to growth, the economic difficulties will, sadly, continue.

A number of speakers spoke about the necessity of having a fuel rebate system. Ireland faces a very significant problem owing to the illegal sale of diesel. Recent figures suggest that between 15% and 20% of diesel sold in the country is illegal. The illegal laundering of diesel is damaging the public finances and is unsafe, and it is certainly damaging the environment. Deputy Heather Humhreys will be well aware of this because the two local authorities in her constituency experienced really difficult environmental problems, the fallout from which imposed a significant cost on the Exchequer.

I welcome the recognition by the Minister of the problem concerning diesel but he has not come to terms with its scale. In this regard, I met a number of interested parties, from representatives of the Irish Road Haulage Association and oil distributors to forecourt owners, and I noted they are at one in believing this is a significant crisis. The estimated loss to the State is between €150 million and €250 million.

The Revenue Commissioners, with the permission of the Minister for Finance, were very prompt in taking action when they discovered a potential loss of revenue to the State in the region of €45 million in respect of pensions. This was identified by the Revenue Commissioners prior to Christmas. In consultation with the Minister, there was a series of letters to pensioners. A problem was rightly identified and the authorities wanted to ensure that, in difficult times, there would not be a loss to the State. However, the potential loss owing to illegal diesel is multiples of €45 million. I am not sure this is being taken seriously.

I am a member of the Oireachtas Committee on the Environment, Transport, Culture and the Gaeltacht, which recently produced a report on illegal diesel. The committee invited before it some of the interested parties, including farmers, agricultural contractors, the Revenue Commissioners, oil distributors and road hauliers. They understand the scale of the problem and the difficulty that arises over competitors operating illegally. Illegal production is hitting the road hauliers in a big way because there are unscrupulous competitors who use the washed diesel, thus making significant savings and gaining a competitive advantage. The hauliers have sought a rebate scheme – I am disappointed this is not in the Bill – because it is cheaper for those who travel internationally to fill up their trucks overseas than it is to do so here. This represents a significant loss to the State because the oil ought to be sold here with the appropriate margin for the State included.

I appeal to the Minister of State to try, in whatever way he can, to beef up the legislative provision on the use of laundered diesel. It is fuelling a criminal fraternity that seems to have made vast sums and which can afford to take a hit regularly. It can afford to have a couple of tankers seized and to have its laundering equipment taken by the State. When it is taken, the launderers are back in business in a neighbouring warehouse or farm within a matter of days. The scale of the problem cannot be overestimated. If the State is losing between €150 million and €250 million annually, it behoves all of us to try to do something. Tackling this would remove some of the burden from the Minister for Social Protection, Deputy Burton, who must cut social welfare, and Ministers making cuts in many other areas. None of us wants these cuts but it is recognised that the Government must balance the books. Its task is not easy. By tackling the use of laundered diesel, significant revenue could be generated. I appeal to the Minister to do so.

I am concerned about the increase in the levy on private health insurance.

An increased levy applies to all health insurance renewals and new contracts entered into since 1 January. The increase is a massive 40%, or about €80 for adults and almost €30 for children. In addition, increased charges for private beds in public hospitals were announced in the budget and will be confirmed by this Bill.

Aviva has already announced an increase of over 14%, Quinn has done the same and others will follow. The difficulty is that every day people are failing to maintain their health insurance, so there will be a knock-on effect to the State. We are witnessing a steady disintegration of the private health insurance system. Between 5,000 and 6,000 people are cancelling their health insurance every month. The VHI lost 130,000 customers in the 12 months to September 2011. The Government parties claim to be progressing towards a system of universal health insurance but that approach is now in tatters. If people are no longer able to afford private health insurance, how can the Minister work towards a universal health insurance system? The Government will have to address that matter because there is a significant cost burden on all concerned.

Along with others, I saw last year's jobs initiative as a significant raid on private pension funds to the tune of €470 million a year. The Minister identified where that money would go and in 2011 some €120 million was earmarked for a VAT reduction, €95 million for PRSI reduction, and €15 million was set aside for the air travel tax. The Minister never got around to dropping the air travel tax despite what had been promised prior to the election. Even though the Minister for Transport had cosied up to the owner of one airline, more than once, the extra flights never materialised and the travel tax was not lifted. In 2012, that was projected to cost the State €90 million so there is quite a bit of money floating around that has not been utilised. Is there any provision to reassign that money or utilise it to help promote tourism here? The Government has spoken about such initiatives but has not made any money available for them. The Minister should reinvest the additional money available since the air travel tax was not abolished to assist the tourism industry.

I welcome the opportunity to speak on the Finance Bill. Usually, the Government side of the House compliments the Bill, while we in Opposition criticise it. It has been traditional to do so for many years.

I was listening to the contribution by the Minister for Social Protection, Deputy Joan Burton, before attending the House. She was replying to concerns over delays in the carer's allowance and tried to fob off questions by stating what would be done. We all realise, however, that the delays in providing carer's disability and domiciliary care allowances are appalling. There is a one-year waiting list for approval for such allowances in the south east, which is far too long. In some cases, people have passed on to their eternal reward before the carer's allowance was approved. This area is affecting less well off people in our communities, so the Minister should take fire brigade action to provide extra staff. In this era of modern technology the system should be run more efficiently, fairly and quickly than it is at present.

Many people are refused the carer's allowance and they then appeal but the process can last so long that it becomes ridiculous. The Minister, Deputy Burton, was not very forthcoming in her reply but Deputies on all sides of the House are finding it difficult to obtain decisions on the provision of carer's, disability and domiciliary care allowances.

The Finance Bill was announced at the same time as the jobs initiative. I welcome any such announcements but this is the fourth or fifth time that a jobs initiative has been unveiled by the coalition Government. I hope there will be meat on the bone this time and that we will see some action being taken. Very few jobs were created on foot of the previous announcements, but hopefully we will see jobs being created this time.

One of the major problems in this country is the lack of job opportunities. The south east region is lacking employment due to the downturn in the building industry where many people previously had jobs. We must examine ways and means of retraining and upskilling, as well as getting young people back to education. We must create such opportunities for young people who may have left school aged 15 or 16 due to the high wages they could get in the building industry at the time. They now find themselves unemployed with little education or skills, so I hope the Minister will encourage as many young people as possible to re-enter the workforce through FÁS and other schemes. The Minister should act as quickly as possible.

I welcomed the national internship scheme when it was introduced but those opting to pursue the JobBridge scheme must fill in a 20-page document. Some people are taking up places on it but I find that many who attend my clinics say the bureaucratic red tape makes it difficult to apply and they lose interest. It is a pity to have such complex documentation because it could be a good scheme. Government Deputies have more influence with the Minister than I do, so they should devise a plan that involves less form filling and more action. A simplified application form is required to encourage more people to apply for the national internship scheme.

Now that county enterprise boards will be based in county councils, there might be a better one-stop-shop system. I do not know who designs the documentation in various Departments but they are clearly hung up about red tape. A person applying for the national internship scheme, however, should not have to deal with such complex bureaucracy as it currently exists. It could be a very good scheme and I complimented the Minister when it was introduced but we should make it easier for people to apply for places on it.

Small businesses are the cornerstone of our economy but the banks are not lending and local authority rates are crippling most small firms. Charges, levies and red tape add to the problem, as do the increased fuel costs in recent months. Rates constitute an issue about which I have serious concerns. Local authorities set rates for businesses, while the Minister does not seem to have any say. Business people are annoyed about the levies and high rates that local authorities have placed on them. Councils say that in the past year they have frozen those rates but that is not worth much to business people at present. They need a reduction in rates. Some time ago, Professor Colm McCarthy's report said there could be savings of up to €500 million in local authorities through more efficiencies. If such savings were achieved, local authorities would be in a position to reduce commercial rates. The Minister should put the boot in to local authorities, pressurising them to reduce rates for business people. In every town in Wexford large numbers of shops and small businesses are closing down, mainly due to high local authority rates and a drop in footfall as people are not spending much. Many of these businesses feel if they got some reduction in rates it would be of help. However, local authorities and councillors do not see that and would rather the businesses and shops close down rather than reduce their rates. That is not good enough. The Minister for the Environment, Community and Local Government should sit down with local authorities to introduce the efficiencies in the local authority system identified by Colm McCarthy, reduce rates and give businesses in towns and rural areas an opportunity to survive.

While it may be more for the social welfare Bill, I would have thought the Minister for Finance should have addressed the cuts in child benefit, fuel allowance, lone parent allowance, jobseeker's benefit, disability allowances and other benefits introduced in the budget, as well as the increase in VAT. These cuts will affect seriously the less well-off. I was amused earlier to hear Deputies on the other side of the House claim the less well-off will be protected by the budget and the Finance Bill. This is certainly not the case when one takes into account the range of the cuts to which I just referred.

Groups involved with lone parents give the example of how a family with four children will lose €432 in child benefit while paying €400 extra in VAT and €144 for the drugs payment scheme. Such a family will be hit with the household charge, although I believe the Minister should defer the charge until the site value tax is set up by 2013. Along with other increased charges such as motor tax and VHI fees, a typical family with four children will lose up to €2,000 a year, €40 a week. That is a substantial loss of income to the less well-off in our society.

I welcome the changes to the mortgage interest relief system and commend the Minister for Finance's good work in this area. However, the Minister for Social Protection has reduced the mortgage interest supplement along with supplementary welfare allowance, a contradiction to the Minister for Finance's efforts to assist those with large mortgages. I hope the two Ministers will reconcile this as the reductions in the mortgage interest supplement and the supplementary welfare allowance will seriously affect many families.

There are some good measures in the Finance Bill 2012 but there are other areas on which the Minister should reflect between now and its passing.

The Minister for Transport, Tourism and Sport should re-examine the case for proceeding with the Enniscorthy and New Ross bypasses under public private partnership. Many are prepared to invest in infrastructure projects in this country. The Minister should not cut off the option for public private partnerships in such projects. Not alone would these two worthwhile projects solve the traffic problems in both towns, they would create hundreds of construction jobs.

I call on Deputy Heydon who is sharing time with Deputies Twomey, O'Reilly and O'Donovan.

I am glad to have the opportunity to speak on the Finance Bill 2012 which is the culmination of my first budgetary process, this still being just about my first year in the Dáil. I have enjoyed the process and learned much as we went through it.

We often talk about protecting the most vulnerable in our society and prioritising getting the unemployed back to work. This is right and proper as we all know there is nothing worse to happen to a person or family than to lose employment. However, a country is much more than an economy driven by a workforce which is why we have our social welfare system to protect the most vulnerable and those who fall on hard times. With the recession, our workforce has diminished. The number of people working, which we need to drive this country on out of the recession, has been reduced while the responsibilities and burdens on those in employment have grown.

The budget and the Finance Bill was mindful of those still working who may not be classed as most vulnerable but who still suffer greatly. Even though a person may have a job, his or her wages may have been cut drastically and they may face personal debt with negative equity on their home. They are also not entitled to a medical card for their children or other benefits those on social welfare receive. I deal with a large number of constituents who are struggling in that regard and feel they have been forgotten about with the focus on the unemployed. There were elements in this budget that bore those workers in mind and minimised its impact on them.

Those measures included not bringing in any income tax rises, cutting the lowest paid workers out of the universal social charge, USC, and raising mortgage interest relief to 30% for those first-time buyers between 2004 and 2008, a real and tangible saving which will make a large difference to 214,000 households and families. This relief will run from 2012 to 2017 and will see annual gains from €450 up to €2,000 depending on when the person bought his or her house.

Earlier Deputy Dooley referred to promises that had been made but not kept. The mortgage interest relief support was a promise we made before the election to which we stuck. I commend the Minister for Finance on doing that. When the Keane report came out, it did not overly stress mortgage interest relief. However, in dealing with people before and since the election, I knew changes to mortgage interest relief were real and tangible and could make a difference to their lives. Fine Gael listened to them and delivered on that. The property issue still needs more work but the personal insolvency Bill will assist this.

The Minister for Agriculture, Food and the Marine, Deputy Coveney, had to reduce his departmental spend by €105 million. He managed to do so while in the least way possible affecting productivity as well as introducing several measures which have serious foresight and will increase land mobility. The Minister for Finance and his Department deserve great credit for taking on board these points from the Minister for Agriculture, Food and the Marine.

Before I entered this House, I was a young farmer. In 1998, many of those who attended agricultural college with me went on to learn a trade for four years making good money on building sites as their parents were still active in farming and not ready to sign the farm over to them. Now with building work dried up and their parents ready to hand over their farms, many of my friends are looking at farming not as a derisory but a real potential career. This Bill has introduced several measures to encourage farm consolidation and this crossover such as the reduction in stamp duty from 6% to 2% and 1% for family transfers which is a positive development. Incentivising farm partnerships is the way forward because farmers on the continent do not cling to the idea of land ownership as tightly as we do in Ireland. Restructuring retirement relief will create an incentive to transfer farm assets to the next generation. These measures will offer farming as a career option for young people.

The remaining Fianna Fáil Members should not forget what their recklessness has caused. Some 250,000 people have lost their jobs, income has been cut in the public and private sectors and public services for our citizens have been reduced. The people are suffering but the Opposition is stoking their fear and anger rather than supporting them in their time of crisis.

Since this Government entered power we have worked to improve competitiveness, to restore the country's financial stability so that we can regain sovereignty and rebuild confidence in the hearts of the people. People who still have money do not want to spend it because they lack confidence in the future. We have to change that outlook while also giving hope to those who have lost their jobs. We understand their suffering and many of the provisions in the Finance Bill reflect the Government's thinking. Everybody knows we cannot create jobs without a strong economy. We will have to restore growth and stability before we can see job growth. With the jobs strategy we are trying to make jobs for people by manipulating Government policy to some degree. There is nothing more depressing than to be out of work over the long term. It is bad enough to be out of work for a month but long-term unemployment has a terrible effect on individuals' self-esteem.

I want the Croke Park agreement implemented to protect students, patients and pensioners. That will not prevent me from demanding the best from our Ministers in terms of ensuring the implementation process works. There may be a Croke Park agreement for public sector providers but there is no deal for the patients, students and pensioners who benefit from public services. This is why I will be working from within the Government to make sure the agreement works.

The scale of the problems in the HSE and the need for Oireachtas scrutiny of that organisation do not appear to be recognised by many Opposition Deputies. The administrative and managerial problems, the waste and the failure to deliver services are not reflected in the public comments by Members of the Oireachtas. Instead we have a sort of Taliban force of septic tank fundamentalists who are contributing nothing. The opposition will have to start coming from this side of the House because the scaremongering and misinformation coming from the other side verges on the ridiculous. Fianna Fáil suggested that septic tank inspections would cost €500 but the charge is actually €5.

Nothing solid comes from the Opposition. It never takes on the hard core issues that need to be addressed. Most of the people working for Google and similar enterprises across the country come from other jurisdictions. They are attracted to work in Ireland by higher wages. We have to make changes to our tax system to attract people into this country because we are not able to educate sufficient numbers to fill the vacancies created by the high technology companies that have located here. All our universities have fallen out of the top hundred in university ranking worldwide. That has happened only in the past couple of years but one would never hear a Member opposite proposing radical action to address that problem. Third level fees should be reintroduced for those who can pay them and the money should be ring-fenced and invested in our universities and technology institutions to ensure we produce the skills needed for these jobs.

Similarly, we do not hear sensible proposals from the Opposition on the VHI. I have heard a lot about people who have lost their private health insurance but they are no longer paying for insurance because it is too expensive. Nothing was done to address this issue while Fianna Fáil and the Green Party were in power. VHI bills do not clearly breakdown how the money was spent. Customers know how much they are paying in premiums but nobody is taking on the mammoth task of controlling costs. That is an initiative that should be coming form the Opposition but, unfortunately, it will have to come from the Government backbenches because the Deputies opposite are too busy getting worked up about septic tanks.

The Finance Bill and the budget are based on three objectives. First, they aim at accelerating job creation to reach the target of 100,000 jobs over five years. Second, they seek to achieve fairness for our people. Third, the property market is to be kick-started.

The budget has managed to reduce our deficit to 8.6% of GDP through adjustments of €3.8 billion, in keeping with the EU-IMF deal. The reason for the figures and the starkness of the task that lies ahead is the legacy this Government inherited from its predecessor. It is fantasy economics to suggest there is an alternative to dealing with the EU-IMF. The ongoing events in Greece bear testimony to that reality.

I congratulate the Minister for Finance and his Cabinet colleagues on maintaining headline social welfare rates and avoiding increases to income tax. The Minister of State at the Department of Jobs, Enterprise and Innovation, Deputy Perry, is doing extraordinary work in the area of small business. The agri-food sector, which is the critical vehicle for creating jobs and driving the economy, is being protected through the maintenance of the off-farm income regime. These are enormous achievements.

In the area of job creation, the special assignee relief programme permits 30% of salaries ranging between €75,000 and €500,000 to be excluded from taxation. This will allow us to attract heads of divisions and development personnel from abroad. Similar initiatives have been introduced in a number of countries.

Research and development is central to the growth of our economy. Individual employees can now benefit from tax allowances for research and development activities in which they have a special involvement. The first €100,000 of qualifying research and development expenditure will benefit from a tax credit of 25%. Research and development sub-contracted to other companies will also benefit from tax relief.

The Bill contains 21 measures to assist the financial services industry. That has to come at a premium. In the area of agriculture, food and drink exports increased by 25% in 2011 and the sector employs 135,000. It is important that support is given here. There are stock-relief initiatives to encourage partnerships in agriculture, which will represent a new model for Irish farming and should be encouraged. The reduction in stamp duty for the transfer of non-residential properties to 2% will have a critical effect and will be of great benefit to the farming community. It will also spur on the agricultural sector.

The three-year tax relief for start-up companies has been expanded to cover 2012, 2013 and 2014. Certain measures have been taken to address the issue of diesel laundering and I would encourage further steps. The exemption threshold for the universal social charge has been increased from €4,004 to €10,036 bringing 330,000 people out of the net of the universal social charge. That is progressive and represents fairness. Equally, the legally binding maintenance agreements within civil partnerships will now have the same status for tax purposes as within traditional marriages. Those are important progressive and socially just initiatives.

The expansion of the definition of bread to include other foods and other ethnic foods will allow them to avail of the zero rate of VAT. In the property market, reducing the rate of stamp duty to 2% should have a positive effect on property sales. Mortgage income relief will be available at 25% to people who buy a first home this year and at 15% for non-first homes. This is paralleled by the special increase in the mortgage income relief for people who bought homes since 2004 during the boom.

The budget and Finance Bill set the scene in terms of job creation and achieve a considerable amount in the area of fairness and in attempting to kick-start the property market once more. No other criteria could be used to evaluate it.

We appear to have come to a new crossroads in the Dáil with the reference of certain Fianna Fáil Members to bringing out the Pontius Pilate bowl of water and white towel followed by Deputy Twomey's mention of some Opposition Deputies turban-wearing and basket-carrying running through the Dáil in a crusade for the septic tank. I welcome the opportunity to speak.

I take issue with what Deputy Browne said. He said that it has long been the tradition in this House for this side to propose and for the other side to oppose. However, the other side should not oppose this time because the reason this side is bringing in these measures is that those on the other side caused it. It will be interesting to see what the Fianna Fáil Members do when we vote on the Bill. While the Bill contains many measures that will be very difficult for families, they are necessary because of the 14 years of neglect during which the party of Deputies Browne and Dooley drove the economy into tatters, to use Deputy Dooley's words.

The Bill contains many good provisions and the Fianna Fáil Deputies who have now left the Chamber were very slow to acknowledge that the Government has not increased income tax, that more than 300,000 people have been taken out of the universal social charge net and that for the first time there is a concerted effort, as recently announced by the Taoiseach, Tánaiste and Minister for Jobs, Enterprise and Innovation, to assign responsibilities to Departments to deliver on targets. This is not like the type of document that was launched in the Royal Hospital in Kilmainham by a former Taoiseach with great media fanfare where all the Deputies from a certain party were called in, the trough was opened, all the snouts went in and they had a great party. This is a working, living document with targets to be set and measured. The Government will be rated based on the implementation of the targets. Of course, we are only in this situation because of the neglect of many years.

Deputy Twomey is correct. The change for people, who bought their houses between 2004 and 2008 and found themselves in negative equity, is recognition by the Government that those people were innocent parties. Certain politicians, bankers, auctioneers and unscrupulous landowners inflated the property bubble to the point that it blew up in all our faces. It is very easy to suggest not paying back any bondholders or any bank debt by claiming that it is not our problem. It is our problem and has been since we guaranteed all the past, present and future debts of the banks and since we guaranteed all the past, present and future deposits of the banks. This is our sovereign debt and we need to pay it back.

We also need a realisation that we are in a very difficult situation. We are taking in €30 billion and spending €50 billion. We cannot continue down that road indefinitely. Even if there had never been a banking problem in the country, we could not continue to borrow at the present rate. We are borrowing €76 for every man woman and child per week. While I know people find the €5 septic tank charge and the €100 household charge difficult, how can we continue to borrow €76 per week per individual ad infinitum? That is not sustainable and we need to call a halt to it.

While it is difficult and painful, unfortunately the only way to do so is to rein in public expenditure. Every time we take €1 out of public circulation we either affect a service or affect an individual. By taking €4 billion out of circulation we will affect an enormous number of people. We were not elected into Government to flunk these decisions nor were we elected for some sort of popularity contest. When we campaigned during the general election everybody told us to fix the country. It is not possible to fix the country without affecting individuals. While that is very difficult, the Government must continue to be fair. The vulnerable people who are dependent on State services must be prioritised at every turn of the road. I welcome the measures in the budget and the Finance Bill that will implement them. I commend the Bill to the House.

I call Deputy McDonald, who, I understand, is sharing with Deputy Nulty.

During this debate it has become clear that the Government is completely disconnected from the realities that face low and middle-income families or perhaps it is uninterested. Week after week - we have heard it again this evening - the lament comes from the Government benches. They cry crocodile tears about the lot they inherited when they entered into Government. They ring their hands with continual mention of Fianna Fáil - and all its wrongdoing - and the troika. However, Ministers on the same Government benches continue to pocket excessive salaries and to award each other additional allowances worth tens of thousands of euro. We are in an economic and social crisis, the scale of which is not lost on anybody on these benches. Based on the CSO quarterly national household survey, more than half of all households have cut back their spending on groceries. One fifth of households have delayed or missed paying their bills in order to meet their outgoings on basic goods and services. One in ten have delayed or missed a loan repayment. Some 45% of households have spent some or all of their savings. For lone-parent families the picture is even bleaker because one third of such households have borrowed money from family or friends, one in four have delayed or missed loan repayments and half have delayed or missed paying bills.

An extensive report funded by the Department of Social Protection published last week concluded comprehensively that low-income families and those who are unemployed do not have enough money to achieve a basic standard of living. I do not simply refer to the struggling people who rely on social welfare payments but also to those who are now referred to the coping classes or even the working poor. The Department of Finance's tax take figures for 2011 show the disproportionate effect its budgetary measures are having on low and middle-income families. Their figures indicate that someone on the minimum wage paid three times more tax in 2011 than in 2010. The Government makes much about those it has taken out of the universal social charge net. What is its view of the 200,000 people who earn just above the weekly threshold of €193 per week and remain subject to the charge? We have heard no word from the Government on that issue.

Those earning between €20,000 and €30,000 per year paid 36% more tax in 2011 than in the previous year. Those with incomes between €40,000 and €50,000 paid 23% more. Can those in the Government begin to imagine the hardship facing these families? They should do so because this is now the record of achievement of the Fine Gael and Labour Party Government. To compound the hardship, the Government has heaped additional taxes on the same low income and middle income families. Carbon tax and motor tax changes will hurt struggling families disproportionately. Taxing a mid-range car will cost drivers an additional €59 per year. Petrol will increase by 1.4 cent per litre and diesel by 1.6 cent per litre at a time when prices are already at an all-time high. These measures are a tax on families and workers. They are especially unfair for rural communities and dwellers who in the absence of public transport are more dependent on their cars than others. Government VAT increases serve only to push up the cost of living for those who can least afford it. Flat taxes such as the household charge are deeply inequitable and unfair. To rub salt into the wounds, the Government has not included an inability-to-pay clause with these charges.

It comes as no surprise to me that Fine Gael leaders and Ministers choose to heap additional taxes from the bottom up rather than the top down. I expect the Minister, Deputy Noonan, and his party cohorts to award bonanza salaries to each other and to lash out cash for their so-called special advisers. However, it is astonishing that the Labour Party Ministers are happy to row in along side their Fine Gael Cabinet colleagues. This morning the Minister, Deputy Pat Rabbitte, painfully, and using all sorts of mental and linguistic gymnastics, tried to justify to the nation why his party colleague, the Minister of State, Deputy Jan O'Sullivan, should get an extra €17,250 per year simply for turning up to work on top of a salary of €130,000. If Ministers were serious about the business of Government and had any sense of connectedness with the hardship of low income and middle income families, they would revoke these ministerial allowances and cap their salaries. How on earth can any Minister reconcile at any level a tax on the low-paid with their whopping great salaries? As I understand it, the Labour Party in particular was founded on the principle that it would protect people from the bottom up. Yet, here we are. What makes those on the Government side different from those in Fianna Fáil? That is our question.

Sinn Féin's budget 2012 submission suggested the introduction of a third tax band on individual income in excess of €100,000 per year. We called on the Government to introduce a modest wealth tax such as the one implemented successfully in many other jurisdictions. These measures alone would have yielded €1.2 billion but the Government refused to implement them. Instead, it chose regressive taxation measures that hit the unemployed, low income and middle income families and the elderly hardest, all the while vigilantly protecting those at the top, including Government Members.

The Government has cut community employment scheme supports. It has deliberately targeted single parent families. Teaching supports for children with disabilities are becoming a privilege rather than a right. The Government has committed to cutting the State contributory and transition pensions from September this year. It has offered little respite for families struggling with unsustainable mortgage debt. It is reducing public service provision across the board and it is heaping additional taxes from the bottom up rather than from the top down. The Government is about to flog off the last of the State's wealth in the bargain bucket to the lowest bidder. All of this is taking place while Ministers still have the brass neck to tell citizens that they are worth €170,000 per year. I do not think so. The Government strategy is flawed. The Government declares it is about jobs and growth but it persists with cutbacks and austerity. The domestic economy is on the floor because it has been savaged, butchered and deflated by cutback after cutback. This kills off the prospects of growth and keeps people on the unemployment lines.

Let us have fewer of the homilies from Government about its commitment to protecting the vulnerable or to creating jobs. The Government's actions show us clearly that it took the baton and the blueprint from those in Fianna Fáil, whom it laments. Come hell or high water and irrespective of the consequences for ordinary working people, the Government is determined to implement the same policies, make the same mistakes and insist that citizens live with the consequences of all of it.

I thank Deputy McDonald for sharing time and for allowing me to contribute to this important debate. I will oppose the Finance Bill in line with my decision to oppose the budget. One must draw the conclusion when one examines the Bill in its totality that it is not a progressive Finance Bill. It is not legislation that will help us to meet our international obligations in a way that is fair and balanced. While I support individual measures in the Bill, such as the changes to the universal social charge, measures relating to VAT and the household charge will outweigh the small gains achieved.

The introduction of the special assignee relief programme contained in the Bill is a scandal. It is not a new initiative of this Government but that is not the problem. The problem is that it is a development of previous measures started by Fianna Fáil in 2008. Effectively, very wealthy people who come to this country on salaries of €75,000 per year plus will be given a tax break by the State. It is shameful and disgusting to give a tax break to very rich people given that we are cutting community employment schemes and we are unable to fill vacancies in speech and language therapy services. What was going on when this was decided? Initially, this measure was provided as a tax rebate. That is the way Fianna Fáil formulated it. Individuals were to come along at the end of a given year and apply for their money back. Now, it has been changed and turned into a tax credit. We are increasing tax credits for PAYE workers, that is, for ordinary people but reducing tax credits for very wealthy people to come into this country and work. This measure will not create one single job. Where is the evidence? Where are the statistics that support the argument this will create jobs? If there are vacancies in areas like IT and financial services and there are two candidates for a vacancy, one a citizen living and working here and the other someone wishing to avail of this tax break, who will the company select? It will go for the person it will bring into the country. Therefore, how will a job be created? I do not see how this initiative will create jobs for our people. There are serious questions to be answered as to the reason this was included in the Bill. Who lobbied for this? Was it organisations like KPMG, the International Financial Services Centre or the Irish Aviation Authority? Was it the American Chamber of Commerce which was able to apply pressure to the Fine Gael Minister for Finance to create this tax break for rich people? I see it as a scandal and do not understand how we can stand over it. The Minister came into the House and said this would help job creation here. It will not help job creation here. What it does is provide a State subsidy for private companies to hire people on high salaries. That is a disastrous policy and one I can never support. Will the Minister provide details on who benefited from the programme in 2008, 2009 and 2010 and on who will benefit from it in the future? Will he provide details on how much it will cost the Exchequer? How many people will apply for it and what is the rationale for it? Can he or someone else explain to me how this measure will create jobs?

In his contribution earlier, Deputy Twomey said the priority for the Government was job creation and that people who were critical of the austerity strategy being imposed on this country by the troika, which was agreed by the Fianna Fáil Government in its memorandum of association, were engaging in fantasy economics. Is Deputy Twomey familiar with the work of Joseph Stiglitz or of Paul Krugman? Is he familiar with basic economic analysis? It is demand that creates jobs. If I run a company, a business or an enterprise, but am unable to produce a sufficient amount of the product I am making or to sell a sufficient amount of the service I am producing to cope with demand, I will then hire additional staff to meet that demand. That is simple economics. Driving down the wages of people on low pay and creating massive tax breaks for people on high salaries will not create jobs.

One way we could create jobs would be to use the €5.2 billion still in the National Pensions Reserve Fund over the next four years to invest in a world class broadband system and to roll out a world class child care system across the country. This would create jobs and the jobs created through the use of that money would have a knock-on effect in the economy and create other jobs, because spending would increase, activity would increase and the economy would grow. Organisations that are well respected by progressive parties, including TASC, have made this proposal. Why is it not being considered? I believe it is not being considered because we have an axis in Government that is dominated by conservative Fine Gael Ministers in the Department of Finance and the Department of Jobs, Enterprise and Innovation who are opposed ideologically to these progressive measures. I urge colleagues to look closely at this relief programme and to seek its removal from the Bill. It is a thoroughly scandalous proposal.

On the question of VAT, the poorest 10% of Ireland's population paid 15%, or one sixth, of their total income last year through VAT. Some three quarters of that was paid at the higher VAT rate of 21%, which has now increased to 23%. In contrast, the richest 10% of our population paid only 7% of their income through VAT. This is an economic fact provided by Social Justice Ireland. Across the water, the British Labour Party, of which I have been critical with regard to many of its initiatives over the past ten to 15 years, is attacking the Tories because of their decision to increase VAT. It is a core tenet of the type of politics I espouse that direct taxes distributed progressively are far better at raising revenue fairly than indirect taxation such as VAT, which by its nature is regressive.

With regard to capital gains tax, I asked the Minister for Finance last week how much would be raised by increasing capital gains and acquisition tax to 40%. The response was that this would raise €276 million per annum. It was also suggested that such an increase might impact on economic activity in the area of capital gains and acquisitions. That is a nonsense argument and an argument for zero taxation. When the rainbow Government left office in 1977, the rate was 40%, until the Fianna Fáil Minister for Finance, Charlie McCreevy, got his paws on the policy. Why can we not have the capital gains and acquisitions tax rate that was acceptable to the rainbow Government and why do we not use that €276 million to scrap the unfair household charge? Why do we not take €20 million of it, for example, for home improvement. In my local authority area of Fingal, it would cost €20 million to replace single glazed windows with double glazing throughout the entire local authority housing stock in the area. This would be taking a good environmental measure that would help combat fuel poverty. I am just using Fingal as an example.

Why can we not have taxation policies of this nature? Taxing capital, wealth and significant incomes would be an appropriate way to meet our international targets. Like others, I believe we can achieve our international obligations in a way that is fair. I do not believe we can walk away from the EU-IMF deal. I do not believe the country should simply not pay its own way. What I believe is that we have choices to make every day we spend in the House making decisions about our economy. We have choices to make about where the burden falls and about how we can bridge the gap between income and expenditure. In my view, the wrong choices are being made and I do not believe I am alone in that view. Organisations like TASC, ICTU, Social Justice Ireland and others have put forward constructive proposals on how to address the issues. I encourage those who share my values and view to run with these and to join me in lobbying for them in this Finance Bill. I thank the Chair for giving me the opportunity to contribute. I will oppose the Bill.

I now call Deputy Phelan, who is sharing time with Deputies Kevin Humphreys, Hannigan and Eoghan Murphy.

I would like to remind the Deputies on the far side of the House that Mark Twain, a very wise man, said that there are only two certainties in life, death and taxes.

Great strides have been made in recent years to combat the once rampant black economy in Ireland. Likewise, the Minister for Social Protection, Deputy Joan Burton has made great progress in recent months to combat social welfare fraud. When one studies the established practice of hiding black market cash in foreign bank accounts in the past, one wonders how this small island ever survived. I am pleased that in spite of the huge challenges inherited by the Government, these challenges are being met head-on with fairness. It is interesting that as soon as Revenue closes off one tax avoidance or evasion loophole, some genius comes up with an alternative. Agency locums, phony self-employed status and abuses of company law are replacing expert cash exporters. Under-reporting or non-reporting of income will always be with us.

Tax collection will always be unpopular, but most people accept that if everybody pays fairly and according to their means, their contribution to the common good is worthwhile. Nobody likes paying taxes, but like social protection, taxes are a noble and humane concept of supporting those who, through no fault of their own, must rely on the generosity of their fellow human beings when they fall through the net of hope. For that reason, I agree with ISME that the shadow economy now costs the State €5 billion in lost taxes. Moreover, with tax-compliant firms being undercut by rogue operators, ISME says hundreds of legitimate businesses are under threat.

As one who campaigned in the last general election on the three platforms of jobs, reform and fairness as a priority, it is fitting that I should show my support for this Government's initial effort to put those noble aspirations into practice.

The programme for Government aims, as expressed in the budget of the Minister for Finance, Deputy Noonan, are a commendable first attempt to correct the shameful misuse of governing power over the past decade. In this time of public demands for instant answers, fuelled by simplistic pundit demands in the media and elsewhere, the Irish economic vessel has sometimes resembled a battleship. I agree with the Minister's comments that "this Finance Bill is a further step towards economic recovery and regaining our fiscal autonomy".

The primary purpose of the 2012 budget is to support the creation of jobs in the short, medium and long term while reducing the deficit to support a sustainable economy. The Government has already restored the minimum wage but not increased taxes for working people. It has reduced the VAT rate applied in the tourist sector, ring-fenced €20 million for long-term unemployed initiatives, maintained core social welfare, including pensions and jobseekers' allowances, and kept family income supplement, carers' and disability entitlements. Key decisions were made in the reform area, such as reducing the pay of the Taoiseach and Ministers, changing pay and conditions for senior civil and public servants and tackling the thorny issue of reforming the public service.

With regard to fairness, the recovery burden must be shared equally, which is why I welcome the maintenance of current social welfare payments and having the biggest budget spend on health, education and social protection. I am also glad that 330,000 people have been relieved of paying the universal social charge, which puts social solidarity at the forefront of the budget process.

Personally, I am delighted the Government is to tackle the murky business of fuel laundering. I am delighted that the Revenue Commissioners will be given more robust powers to combat attacks on the livelihoods of those threatened by unfair competition. I note from the list of Finance Bill measures that a comprehensive strategy will now be applied by the Revenue Commissioners to the subversive element who operate illegally here and in Northern Ireland. Their activities have not only ended legitimate family businesses but have also threatened water tables and public health while compromising the environment and endangering the food chain, agriculture and other industries. I strongly commend the Finance Bill 2012 to the House.

I thank the Minister for bringing forward what is a comprehensive and wide-ranging Bill. The legislation addresses a significant number of issues and at its heart is an effort to make Ireland more competitive and fairer. More could be done and I hope it will be in future budgets. As Senator Phelan noted, some 330,000 have been relieved of paying the universal social charge.

Although it was not announced in the budget, I welcome the increase in wealth, capital gains and capital acquisitions taxes, as well as the cap of €3 million on reliefs for family businesses and farms. These measures will ensure that wealth pays its way, which I welcome. For far too long people have said that people with wealth have not been paying their fair share, and this is an example of the first step in dealing with that issue. I also note the increase in DIRT to 30%. Deputies should be happy with that measure as it is about making everybody pay their fair share.

Further efforts to clamp down on fraud are welcome and people should have confidence in the Revenue Commissioners and know that everybody will pay a fair share. We should not return to what would have happened with tax evasion practices in the 1980s. Measures on fuel laundering are long overdue but are contained in the Finance Bill. I know this issue is deeply felt by Deputy Phelan, who has raised it on several occasions.

There is a series of amendments relating to the licensing process, which is progressive. Nevertheless, certain issues should be addressed. I would like to see the implementation of the recommendation of the Commission on Taxation Report 2009 that there should be an annual tax expenditure report published within several months of a finance Bill outlining the cost, effectiveness and economic impact of various tax reliefs on measures. That would be a progressive and reforming measure that would allow us to see very quickly how a finance Bill would perform.

I have an issue with the increase in mortgage interest relief to 30%, as the measure is not targeted at those who need it most. I ask the Minister to introduce an income threshold on eligibility for the tax relief. I suggest that the cap should be at least €200,000 for a married couple, and there should be a balance across other income levels.

I mentioned the regulation of motor fuel businesses earlier, and I ask the Minister to consider an amendment to the appropriate section to ensure that one of the conditions of a licence to sell fuel oil and diesel is that an applicant should have planning permission for a premises. That would be a very efficient way of closing down or stopping the establishment of illegal fuel laundering businesses. Many people having driven around the country would have seen fuel stations operated from the back of containers, and one must question how, in the first instance, such people got a licence. If we introduced such a stipulation in the Finance Bill, it would be a very efficient way of closing down illegal trade, which operates in competition with companies paying their fair share of tax and giving good employment.

Deputy Nulty criticised the special assignee relief programme earlier. It is very easy for the Deputy to forget the benefits introduced in this Finance Bill. I was elected and will work to the Labour Party manifesto, unlike Deputy Nulty, which was negotiated with Fine Gael and led to the programme for Government. Deputy Nulty ran for election on the programme for Government, which he very quickly rejected. Like Bobby Ewing he stepped out of the shower and forgot why people voted for him. They did so on the basis of the programme for Government and many of my colleagues canvassed for him in that respect. People knew why they were electing Deputy Nulty but he seems to want to walk away very quickly from those responsibilities.

There has been much heat and misinformation about the special assignee relief programme. This provision is tightly worded and ensures that people on high income currently working in Ireland cannot avail of it. It is only available to 2014 and the person in question must have worked for a company for a year and not have paid tax in Ireland for the previous five years. The idea is to attract highly paid jobs to Ireland and my understanding is it will bring about a gain in taxpayers and increase revenue and PRSI to the Exchequer. I welcome it in that respect. There is another element to this which opens another front in the tax war, and we should be careful with it. The initiative must be reviewed in 2014 to ensure it does what it says on the tin.

I welcome the opportunity to speak on this Finance Bill this evening. I was in Ashbourne last week calling to some houses and I spoke to a man and his son about where we are as a country. He told me he was tired of hearing constant negativity from some quarters of society and that he wanted a positive narrative about the country. I agree with this and believe we can look forward and be optimistic that as a country we are moving in the right direction. There are positive signs.

We are on track to get our deficit below 3% of GDP by 2015 and the GDP increased by 0.7% in 2011 compared to the first three quarters of 2010. Our exports are growing very strongly and our tourism figures are constantly increasing. This week has been very positive for job creation in Ireland, as we have launched our action plan for jobs. That multiannual plan is a firm commitment from the Government to create a renewed environment for enterprise in the country. It is not a typical Government plan and each of the 270 different measures contained in it has an identifiable agency or Department which is responsible for overseeing it within a given timescale. There will be quarterly reviews led by the Taoiseach's Department to ensure these measures are being implemented and working. If a measure is not working, we will be able to review it, work out why it is not working and try to put it right. This morning's announcement that the memorandum of understanding is to be renegotiated is positive news. Since the Government came into office almost a year ago, we have consistently argued with the troika that money from the sale of non-core State assets should be used not just for debt repayment but also for other things, such as investment in job creation. I am glad that argument has been listened to. I understand that in the coming weeks, the Minister, Deputy Howlin, will present proposals to his Cabinet colleagues on how some of this money can be invested to generate jobs.

The Finance Bill 2012 is another example of the Government's focus on job creation. The measures in the Bill are designed to support investment, allow for more research and help to create more jobs. This Bill is part of the wider Government strategy on job creation. I particularly welcome the Minister's focus on Brazil, Russia, India, China and South Africa, which are known as the BRICS countries. I have spoken previously in the House about the potential of the Irish exporters to expand into these countries, which represent 40% of the world's population and 15% of the global economy. The discretionary spending of the growing middle classes in those countries is increasing as their economies develop. China has more than 30 cities with a population of over 1 million. We have very little presence in many huge markets there. I have visited cities like Wuhan and Guangzhou, each of which has a population greater than the whole of Ireland. Very few Irish goods are on sale in those cities, which have seen little penetration by Irish firms.

Millions of citizens, from Moscow to Mumbai and from Sao Paulo to St. Petersburg, have money that could be spent on Irish goods or in Irish towns. We need to get into these markets. The legislation before the House contains measures that will help Irish firms to do so. Employees of Irish companies who spend a minimum of 60 days in any of the BRICS countries will get tax breaks. Irish employees will be able to work with the embassies and consulates in these countries to further their knowledge of local economies and find businesses who are interested in dealing with them. We should not forget that last year, the Tánaiste called all of our ambassadors to a meeting to discuss how they could help to generate investment and trade opportunities for Irish companies. This is another example of the joined-up thinking at the heart of the Government.

We are committed to trying to improve the level of job creation and increase the number of jobs in this country. It is important that we keep an eye on this programme. If what we are doing with regard to employees in the BRICS countries works out, we should think about expanding it to other countries to ensure we can gain as much trade and investment as possible from those countries. This has been a positive week for job creation in Ireland. All Government Deputies and Departments are working together to create jobs and get people back to work. This Bill is another example of that work.

I welcome the Finance Bill 2012. I am glad to have an opportunity to speak on it. It is important to understand that this legislation is not being debated in isolation, but in the context of other measures that have been introduced by the Government. I refer not only to the announcement of the budget for 2012 but also to the jobs plan for the next four years that was announced by the Government earlier this week. The wider financial and economic situation needs to be considered in the context of some of the Government's activities, including the measures it has taken with regard to the banking sector, the significant changes in our borrowing agreements with the troika and the improvements in our lending terms abroad, which are notional at the moment. Other measures, such as those to be set out in the proposed personal insolvency legislation and the new enterprise and investment schemes for those coming from abroad, have yet to come. The general reconfiguring of the tax base will also be welcome. We should bear in mind that some positive economic indicators in the wider economy are also envisioned. This Bill is being debated in the context of the wider debate that is taking place internationally. Attempts have been made to place those involved in the debate neatly into one of two camps - the austerity camp or the stimulus camp. People have suggested that a Keynesian approach is working in the United States and starting to bear fruit as the US economy begins to come around. They have argued that the bare branches of austerity in the UK demonstrate that its economy is stagnant. I wonder what they will say tomorrow.

It is important that we remember that economics is a social science. Economists are very good at analysis, but not so great at predictions. Like any other science, economics is continuing to develop. As we do not yet have the perfect formula for managing an economy, all opinions are relevant in the current debate. I wonder whether the terms of the debate have forced us into a false dichotomy. Have we over-simplified the choices we face by saying we can take a Keynesian approach or an austerity approach? Perhaps the assumption that one cannot have stimulus and austerity together is limiting the discussion we can have on measures like those set out in this Bill and others that will come before the House. It has been proposed that we deleverage the State at the same time as deleveraging the banking sector and individual household private debt. If that contraction is considered all at once, there is a risk that it will hamper growth and lock us into a deflationary fiscal spiral. Anyone with a basic understanding of economics and of life will say that if everyone is cutting at the same time, it is not obvious where the growth will come from. At the same time, anyone with a basic understanding of finances will say that the current Government position is unsustainable. We cannot continue to spend more than we earn, particularly at a time when borrowing rates abroad are unacceptable to us.

The challenge this Government faces, as it concludes its first year in office, is to reduce the deficit responsibly without damaging our prospects for growth, or at least while allowing growth to happen. If the necessary reduction in the deficit is not made, we will be too greatly exposed to activities and events that are external to this country and its economy. Some of my colleagues have described this as a national security issue. I am sympathetic to that description. The difficulty is that we are not seeking to change how we spend our money in the overall context. We are not seeking merely to move money from column A to column B across the Government's expenditure in the economy - we are trying to reduce spending in every single column, across all lines of expenditure. That is a much greater challenge. We are not simply talking about how we spend our money - we are talking about what we spend and where we spend it. That is the great political question we face. It is important that we face it in a responsible manner. It is unfortunate and regrettable that as this debate has evolved, we have not been hearing responsible proposals from other sides of the House. The current climate demands that we examine how we can address the exact situation and commit to the challenge of reducing our deficit and our exposure to outside economic factors as best we can, while making sure we do not hamper our growth possibilities.

The Finance Bill strikes an appropriate balance between correcting the national financial situation and attempting to influence the economic position in a positive direction. When we examine the various sections of this legislation, it is clear that the Minister has tried to target spending, tax reliefs and policies in a way that creates the right environment for the economy to grow. I refer, for example, to the aspects of the Bill that relate to small and medium sized businesses, the financial services sector, the agrifood sector, the high-tech sector and new markets in other countries. These initiatives are very welcome and will prove incredibly fertile. They will not provide the answer in and of themselves, however. There is a wider context to what the Government is doing. The wider international situation is also relevant. Ultimately, employment will be the answer. It is the only way of sustainably improving our economic position and putting us on a sound footing once again. Recovery will take time. The only way for it to happen properly will be for it to come from the domestic indigenous economy. While it is right to champion exports, foreign direct investment and other measures in this Finance Bill, we must start to focus our resources on small and medium sized businesses that trade in the domestic economy. It is ultimately a question of balance. Although I would have preferred if we could have been more ambitious in the adjustment we made in the 2012 budget, I believe this Bill strikes the right balance between our current financial position and the wider economic environment, which we are hoping to grow.

I would like to share time with Deputy McConalogue.

I welcome the opportunity to speak on the Finance Bill 2012. To be fair, last December's budget was never going to be easy. The target that had to be achieved involved reducing the deficit to 8.6% of GDP and taking €3.6 billion out of circulation. It was always going to be a difficult task. Fianna Fáil supported those targets. In our budget proposals, we submitted how we would achieve them. Ultimately, the target was reached on foot of a collective decision by members of Fine Gael and the Labour Party. We welcome some aspects of the approach that is being pursued, such as the increase to €10,000 in the universal social charge exemption. However, many elements of the budget and this Finance Bill are regressive. One after the other, Government backbench Deputies have praised the Government for its fairness and for protecting the weakest and most vulnerable. If only this were the truth. The ESRI assessment of the budget states:

Looking at the impact of the 2012 budget, it is clear that the greatest reduction in income is for those on the lowest incomes - a fall of between 2% and 2.5% for the poorest 40% of households. This compares with a fall of close to 1% for the next 40% of households, and of 0.8% for the top 20%.

This is a dreadful assessment of an extremely regressive budget. Prior to the general election, the Labour Party made clear that top earners must make an appropriate contribution to addressing the deficit. We do not see any sign of such measures. Prior to the budget, the Fianna Fáil Party proposed increasing the universal social charge for those earning more than €115,000 per annum but no action was taken and those at the higher end of the income scale got off scot free.

Given the limited time available to me, I will concentrate on a small number of issues. Only today, Chambers Ireland noted that the seasonally adjusted 9% decrease in the value of exports to €7.5 billion in December from a high of €8.5 billion in November signals a need for a greater focus on the domestic economy. At a time when we should be rebuilding the domestic economy, the Government has decided to increase VAT to 23%, the fifth highest rate in the European Union. This measure will have a devastating effect on local economies and small businesses and will cost jobs. The distributional effects of the VAT increase were examined by the ESRI in a paper published in July. It found that those hardest hit by the VAT increase are households in the lowest 10% income bracket, households in rural areas and one parent families. Once again, we have had an attack on the most vulnerable.

How can the Government, which only a few short months ago heralded a reduction in the lower rate of VAT as a mechanism for creating jobs, subsequently argue that an increase in the higher VAT rate will not have any effect on jobs? Its argument does not add up. Many retailers in my home town of Mullingar argue that the increase in VAT will dampen demand and cost jobs. While we will have to wait on the figures for the first quarter to find out who is right and who is wrong, I predict the VAT increase will cost jobs.

Referring to the Government's proposal on mortgage interest relief, the Keane report stated:

The Group examined the proposal to increase mortgage interest relief to 30% for First Time Buyers in 2004-08 but it was considered that this change should not be recommended. The proposal would give increased relief in an indiscriminate manner as it would give benefits to all who took out mortgages in the relevant years, regardless of their economic circumstances.

This is as an untargeted proposal that would not benefit many people who are in financial distress, including those who bought homes in 2003 or earlier, those who have bought homes since 2008 and some families who traded up during the qualifying period in order that they would have more space. The mortgage problem needs urgent attention. Many people, through no fault of their own, are at their wits' end. They live in fear of losing their home, are struggling to meet day to day expenses and do not have any quality of life. This is not only an economic problem but a moral issue and it is incumbent on all of us in Parliament to address it.

Recently, a person visited my clinic who is working full-time and is at his wits' end because he had run out of petrol while driving on three occasions. He cannot afford to fill his car to get him to and from work because he is crippled by his mortgage repayments. The budget did not offer him any support.

Of the 800,000 mortgage accounts, more than 8% have been in arrears for more than 90 days and approximately 70,000 have been restructured. At the global Irish network on 8 October 2011, former US President, Bill Clinton, identified the mortgage crisis as the principal issue holding back the Irish economy. At the same event, the Taoiseach stated the Government would "make decisions in the next couple of weeks [and] there will be additional facilities for people who have distressed mortgage situations to help ease that problem". The only positive development since the Taoiseach spoke on the issue has been the increase in mortgage interest relief for a specific group of home buyers.

What about the personal insolvency legislation?

Mortgage interest supplement is a targeted, means tested measure which helps those who are most in difficulty. The Government is reducing the budget for mortgage interest supplement by approximately one third and increasing the minimum contribution from €24 per week to €35 per week. Fianna Fáil has been proactive in this regard by seeking to bring about a solution to the problem. During Private Members' business we introduced legislation that would help people who find themselves in this position.

Was the Fianna Fáil Party in government during the past ten years?

While the Government did not vote against our Bill, it has been slow to act on proposals on this urgent matter.

Who gave the Deputy his speech?

Donie Cassidy wrote it for him.

Please allow the Deputy to continue without interruption.

I remind Deputy Buttimer that I was elected on my own merits and did not enter the House on the crest of a wave. I have a mandate to be here and will address the House. I ask the Acting Chairman to request that Deputy Buttimer give me appropriate consideration.

What has the Government done to address the variable rate charged by Permanent TSB which is approximately 2% higher than the rates charged by Allied Irish Banks and Bank of Ireland. Permanent TSB is an almost 100% State-owned financial institution.

The Deputy has one minute remaining.

I agree with Deputy Eoghan Murphy that job creation and supporting small and medium sized enterprises in the domestic economy are the only solutions to the economic crisis. The Minister failed in the Bill to take action in two areas. Since my election to the House, I have continually highlighted the issue of commercial rates. Small family businesses and retailers, which the Government promised to support by amending commercial rates, are on their knees. Nothing has been done and the opportunity has been wasted.

Similarly, no action has been taken on upward only rent reviews which the parties opposite promised to abolish during the general election campaign. Do the Deputies opposite remember making such promises? I remind the Government that its failure to act in this regard is also forcing small family retailers to close their doors.

The Government promised a review of community employment schemes. When will the outcome of the review be announced? When will the review of DEIS and small schools take place? How many reviews will the Government announce?

The Deputy is eating into his colleagues' time.

I will conclude. What is most worrying is that the Government has confirmed to the troika that it may take additional measures during the year if it does not meet its targets. It stated: "While we do not envisage that revisions will be needed, we kept stand ready to take any corrective action that may become necessary to meet changing circumstances." Given that the Government's growth projections have been reduced on numerous occasions in the budget speech, I wonder whether we will see a mini-budget and a new finance Bill before the end of the year.

We are now one year on from the last election and one year into the Government's term of office. In that period of time, the Finance Bill we are discussing, following the measures introduced in the budget in December, is the first big test and real set of initiatives the Government has undertaken. For most of the first year, it was implementing the budget of the previous year. It is disappointing for the public to see what has come to pass in the first major initiative of the Government and the measures they are introducing. It bears little relation to what was promised this time last year when Labour and Fine Gael Deputies were knocking on doors in the same way as me and Deputy Troy. The public was told that the two parties would create 100,000 jobs, which was promised again yesterday, one year later.

It is a renewal of the promise, a little like taking vows once more. Is Deputy McFadden planning on making this an annual event? The parties promised they would burn the bondholders but we have not seen that. In fact the opposite is the case.

Deputy McConalogue's party took out 400,000 people.

Deputy McConalogue's party is responsible for the mess we are in.

Will Deputy James Bannon vote in favour of this Bill?

Like many of his colleagues, I am sure Deputy James Bannon promised that not one red cent would be paid to the banks. He was not long going back on that.

We are conducting the business of government from this Chamber, not from the Galway tent.

Most of the work undertaken in the first year in government was rowing back and undoing some of the promises made during the election campaign. It is welcome that they are now getting down to business and we are seeing the colour of their money. They promised to protect social welfare, small schools and health services. When it comes to the first budget and the Finance Bill, which is implementing those measures, that is not the case. Some 441,000 people are on the live register and 100,000 families are in difficulties with mortgages, with 46,000 residential mortgage accounts in arrears of more than 180 days or more. It is of concern that the Finance Bill and the budget were based on a projection of 1.3% growth, when most forecasts are of 0.5% growth. Unemployment has not been addressed and the trend is worrying. Some 42% of claimants are long-term unemployed, an increase from 36% at the end of 2010. The number of people under 25 on the live register has fallen, mostly because they are heading out of the country, while the number of those over 25 with roots in the country is increasing. I sincerely hope the promise in the jobs initiative and the plan announced last week, to reach 100,000 jobs, will be met because this economy needs it. The economic and fiscal outlook published with the budget projected employment would grow by 62,000 between 2011 and 2015. Now, in the week of the Finance Bill, we go back to the famous figure of 100,000, which the Minister for Finance admitted at the time was a nice round figure pulled out of thin air to make the policy document look good. I hope that is not what we are seeing now because it is not what we need.

The budget is predicated on economic growth of 1.3% whereas many people now project growth of 0.5%. The Taoiseach has not justified the basis for this. When most of the economic think tanks and advisers say it will be different, the Taoiseach is resolutely sticking to his figure. I hope this figure is the case but he seems to be on thin ice. The budget and the Finance Bill, which is implementing it, represents a regressive budget from a Government made up of two parties that promised the most vulnerable would be protected and promised that the budget would be fair because adjustments would be targeted at those who could most afford it. Some of the case studies take into account what the Finance Bill means, in conjunction with the Social Welfare Act, and show the opposite to be the case. I remember a television interview after the budget was introduced and the Minister of State, Deputy Brian Hayes, was wounded by a question on how he, with the wage of a Minister of State, was affected more than those on social welfare. He could not indicate anything but the VAT increase and that is what the figures show.

A family on social welfare, with two parents and three kids, have had the fuel allowance reduced by €190, rent costs €570 more, the back-to-school allowance was reduced by €160 and child benefit was reduced by €228. This amounts to a loss of €1,078 for the family. A similar family but with double incomes on €150,000 lost €30 less, taking into account the household charge, VAT, carbon taxes, motor taxes and college fees. That is what the Government backbenches are standing over.

In many communities, we see cuts to DEIS schools and community employment schemes, where the materials grant is being cut. This makes it difficult for the schemes, which do work in local communities and provide an outlet for many people with valuable skills to work every day. The labour market activation fund was presented as a major initiative in the budget to address unemployment. Some €20 million was allocated to it in the Finance Bill for an unemployment register of 440,000 people, amounting to €50 per unemployed person. Before the jobs initiative was announced, Government Deputies were saying the additional €50 for every unemployed person was the key measure for the unemployed. I cannot recommend this Finance Bill to the House because of what is contained in it. It does not match what the Deputies opposite went to the country with one year ago.

I wish to share time with Deputies Bannon, Mitchell O'Connor and McFadden.

In less than a week the Government, if I can annoy the Members opposite, has reaffirmed its position in its two announcements which have prioritised jobs and encouraged business. The programme for Government is committed to support the production and creation of jobs and it is also recognised that the big challenge for Ireland is to develop a strategy that will allow job growth and sustainable enterprise and that job creation is central to any recovery strategy. That is important.

The Finance Bill before us and the action plan for jobs announced on Monday are focused on delivering on these firm commitments, namely encouraging entrepreneurs, supporting business and facilitating job creation. It is a plan that the Members opposite did not have for 14 years. They ignored responsibility and the people. That is the reality.

The Finance Bill before us is correctly targeting small and medium enterprises and foreign direct investment. Growing the small and medium enterprise sector will be essential in growing our economy, restoring jobs and creating employment. Deputy Troy referred to small enterprises. He knows full well they are labour intensive. We must put in place measures to help such businesses maximise job creation.

The expansion of the employment and investment scheme incentive will ensure it is more widely available. It will help small and medium enterprises to raise investment over and above the limits that apply under the business expansion scheme. The number of investments in the old business employment scheme fell by approximately 50% from 3,200 in 2008 to approximately 1,470 in 2010. It is important that the expansion of the employment and investment incentive reverses that trend and encourages investment in progressive businesses which are creating employment.

The Minister for Finance has also reformed the research and development credit scheme available to small and medium enterprises. The research and development tax credit can be used to reward and incentivise employees. Small and medium enterprises can also contract out some research and development work and retain the full benefit of the available tax credits.

This Government is encouraging Irish companies to expand into emerging international markets. The measures are targeted to encourage business in markets which have significant growth potential, to which Deputy Hannigan referred, in particular the BRIC countries. The foreign earnings deduction will act as a reward for those companies who take on the risk of exploring the opportunities for growth in new markets.

To help expanding small and medium enterprises develop their businesses into BRIC countries there is a new special assignee relief programme. It will allow them to assign employees to new markets for between one and five years to establish vital trade links. As well as encouraging Irish business to expand internationally, the Minister is encouraging skilled executives who can create jobs to relocate to Ireland, which is important. The Finance Bill provides for tax relief on income for skilled executives working in research. These people create employment and are central to driving our economy. It is estimated that between 80 and 100 people might avail of this incentive, each creating jobs which will benefit the indigenous economy.

These initiatives are just part of the measures being introduced by the Minister and Government to encourage business and job creation. Despite what some across the floor said, these initiatives show creative thinking and an ambitious plan aimed at getting our country back to work. The Finance Bill, the action plan for jobs and the other job creation initiatives being implemented by Ministers show the Government is prioritising and delivering on its key commitment of creating jobs.

It recognises the difficulties being faced by families and many of our citizens and is working to provide an environment where we can grow our way to recovery. We live in the real world on this side of the House and understand the importance of a job. That is why the Finance Bill is the platform on which we can rebuild and relaunch Ireland. I commend it to the House.

While we go through the motions and debate the Finance Bill, there is a sense that we are standing here with our hands tied behind our backs, bowing towards Europe or rather the troika. Despite this, the Bill is a positive step towards managing our limited resources in a manner calculated to build on, and improve, the chink of light showing through the financial gloom. It will contribute in a positive way to releasing these ties and bring us back to a level of autonomy.

The Minister has made us aware of a new stability in public finances and the decline in the budget deficit. Budget 2012 and the copper-fastening of its provisions through this Bill will be the driving mechanism to achieve a further reduction in the deficit to a projected 8.6% of GDP. The latest troika concessions, which will see some of the proceeds of the sale of State assets being reinvested in our economy, particularly relating to competitiveness and not just into the black hole of our debt payments, is very welcome. While the actual sale of such assets is necessary, it is a shameful indictment of the previous Administration, presided over by Deputy Troy's party, and an out of control banking sector; but any leeway on the moneys realised is beneficial.

While the macro situation in terms of the global, European and even the national is to a great extent outside our control, there is an urgent need to focus on the regional, within the limited resources available. Our local counties, towns and rural areas must be prioritised, with the emphasis on recovery and growth, through job creation.

I have always said that marketing activities must begin at home in each county. However, while the know-how is local, the funding and investment opportunities must be equally shared from central resources, on a region by region basis. Support for local enterprise leads to a positive impact on local economies, which in turn increases employment.

I very much welcome the Government's action plan for jobs and congratulate all those involved in its formation. Combined with the measures in this Bill to encourage investment and stimulate research, this plan will support the drive toward job creation, with a projected 100,000 jobs coming online by 2016. I very much welcome the focus of the action plan which will change the way the Government interacts with business by cutting costs and red tape. It contains 15 key actions to make it easier to do business and grow jobs. County enterprise boards will be replaced by a new one stop shop micro enterprise support structure. I am encouraged by the initiative that will see Enterprise Ireland, through offices in local authorities, provide expert help to start-up businesses at a local level and bring a new fairness to the allocation of resources and opportunities.

My priority is getting Longford and Westmeath back on the fast-track of economic recovery and development. I said a number of years ago that I am extremely proud to be part of the modern, vibrant economy that is developing in the midlands. In tandem with the rest of the country that economic upswing has been sharply curtailed. I am determined that every opportunity will be offered and taken to reverse that setback.

I am extremely pleased to welcome the action plan which will encourage firms in Longford and Westmeath to sell their products abroad in lucrative export markets. Enterprise Ireland is committed to identifying a wider group of potential exporting companies under a new potential exporters division. The corporation tax exemption for start-ups will be extended to 2014, and a new development capital scheme will help fund medium size indigenous companies with major growth potential.

Accessing credit remains a major challenge for many firms in Longford-Westmeath. I am confident this problem will be directly addressed by the partial credit guarantee scheme and the micro-finance fund, which will help businesses struggling to get loans.

The hardest thing to accept in the current economic climate is the enforced curtailment of locally driven economic and commercial expansion, which I saw taking place in Longford-Westmeath. However, the arrival of Abbott, one of the world's top pharmaceutical companies, has had and continues to have a hugely positive impact on our economic development.

Inward investment such as this is essential and more than ever is the lifeblood of rural areas such as Longford-Westmeath. Infrastructural provision, however, is an essential part of any development. The unfortunate curtailment of road projects such as the N4 and N55 adversely impacts on economic recovery. If foreign investors do not find the basics here they will go elsewhere. We cannot congratulate ourselves on being to the forefront of cloud technology if businesses and households cannot get basic broadband, as is the case in Longford-Westmeath.

This evening I wish to be constructive and put forward an argument for the need to allow a certain cohort of people to unlock part of their pension funds. This will allow a flexible system for many people under financial duress. I have consulted with the Irish Brokers Association and IBEC on this matter.

Widespread early draw-down of defined benefit and defined contribution schemes must be avoided. There are, however, significant funds in additional voluntary contributions and other personal pension schemes that are suitable for early draw-down. IBEC estimates there is currently €4 billion in AVC schemes, in addition to the standard pension contributions already made by employees in defined benefit and defined contribution schemes. There is also approximately €15 billion in personal pension schemes that are widely used by the self-employed and small business owners.

The benefits to the Irish economy have been researched by IBEC, which argued that if one in four people with AVCs and personal pension schemes were to draw down a quarter of their funds, the stimulus would amount to €1.3 billion. If the draw-down was taxed at 20%, there would be an immediate and direct injection to the Exchequer of €260 million because of the liquidity in the market and people spending. IBEC further estimates the additional activity in the economy would create and sustain more than 3,100 jobs in a three year period.

Government policy allowing temporary or early access to private pension savings has been introduced in a number of countries, including Australia, Iceland, Spain and Denmark. With the assistance of statistics from the Irish Brokers Association, I will refute the five main concerns proffered against my proposal. The first is that the banks would see this as a reason to pressurise people to cash in their pension funds. Banks are already doing this and I propose that early access to pension draw-down should only be permitted after sign-off by an appropriate agency such as MABS, a personal insolvency trustee or an independent financial adviser. The second argument is that it will cost the State money. By limiting it to funded pensions schemes and to amounts members are already permitted to take tax free, there is no extra cost to the State. The pension levy can be deducted prior to release. The third argument is that early access will decipitate existing savings. The maximum amount available tax free is 25% of the fund and, by definition, the earlier this is accessed, the smaller the amount. International figures suggest take-up would be less than 20%. The fear of decipitation of funds was also an initial concern for ARF draw-downs and proved groundless. The fourth argument is that the British Government looked at early draw-down of certain pensions and decided not to go ahead due to minimal support, principally from the pensions industry. In Ireland this proposal has the backing of the Irish Brokers Association, which represents 70% of all pension contributions in Ireland, and the Irish Association of Pension Funds and IBEC also support this measure. The final argument is that it will lead to a reduction of individual pension funds in the long term. This reduction is already allowed by the State at retirement, so earlier access has no further negative impact on the fund.

I ask the Minister for Finance and Social Protection to look at this proposal in the Finance Bill or the upcoming social welfare Bill.

I welcome the opportunity to speak on the Finance Bill this evening. The publication of this Bill signals a positive outlook for the future. The Bill gives effect to the targeted measures announced in this year's budget. These measures are focused on improving Ireland's economy, creating a strong environment for jobs and ensuring fairness while at the same raising revenue for the State.

There are indicators that the economic outlook is improving. GDP has increased by 0.7% in the first three quarters of last year; the IDA reported a record number of new investments won last year, with exports increasing by almost 4.5% in the first nine months of 2011; and food and drink exports increased by 25% in 2011.

The budget introduced more than €1 billion in new tax measures. These tax measures will reduce the deficit to under 8.6%, in line with the programme commitments. There are no changes to income tax credits, rates and bands; take home pay will not be affected.

Maintaining a functioning property market is hugely important, not only in terms of the overall economy, but also for the well-being and stability of homeowners. One particular measure I greatly welcome, and which I am sure will also be welcomed by many young families in my constituency of Longford-Westmeath, is the increase in mortgage interest relief to 30% for first-time buyers who purchased their homes between 2004 and 2008. Negative equity has been a cause of serious worry and financial difficulty to households across the country and this Bill delivers on the Government's commitment to assist those in negative equity. First-time buyers who bought in 2008 will also be entitled to mortgage interest relief, even if they did not start paying interest on their loan until 2009.

Another positive action in this Bill is the increase in the universal social charge exemption threshold from €4,004 to €10,036. This change will benefit 330,000 workers across the country. A universal social charge property relief surcharge of 5% will apply to property investors where their income is over €100,000. These changes to the universal social charge and mortgage interest relief will help reduce the financial burden felt by many people and assist in creating a more comfortable future for homeowners and lower paid workers.

The Government's biggest challenge is creating jobs and improving the economy.

This Bill includes supports for small businesses, which are the backbone of the economy. The export sector is an integral part of the recovery process.

I have heard many stories from constituents who have applied for business loans but who were continually unsuccessful. The major problem is that banks are not providing credit, even to legitimate business.

I am sharing time with Deputies Mattie McGrath, Joan Collins and Clare Daly.

This legislation is designed to have a long-term impact and it will take some time for it to have an effect. I welcome one of its provisions, the change regarding the research and development fund for companies and individuals. The first €100,000 in qualifying expenditure will be allowable on a volume basis. The measure could have a significant effect on SMEs. The measures to help struggling mortgage holders are timely.

Let me concentrate on the special assignee relief programme, SARP. I have listened very carefully to the Minister over recent days and to his reasoning for the programme. I accept that his giving tax breaks to foreign executives in the hope of stimulating the Irish economy is well intentioned. However, many of my constituents feel we are continuing to export trained, qualified young people at a rate of 100 per day while we are incentivising foreign executives to oversee us. The latter earn more pay and pay less tax.

I have grave misgivings about supporting a scheme that provides benefits to a sector that is more affluent than others. Figures released by the Department in recent days have shown the crippling effect of the austerity drive on low-income and middle-income earners, the so-called coping classes or working classes. The latter are shouldering a huge tax burden. Incredibly, people earning €1 million or €2 million paid 0.3% less tax last year. Those earning between €400,000 and €450,000 paid just 1.1% more tax, which is outrageous. As I understand it, SARP is an extension of a programme that already exists. If I am correct, the programme was introduced in 2008 and was extended in 2010. Before launching the current scheme, did the Department evaluate the results of the programmes from 2008 and 2010? If so, did they have any tangible or concrete effect on job creation?

The programme is an insult to low-income earners and does not guarantee the creation of a single job. In debates on various programmes during the week, the Minister was not able to say the scheme will guarantee jobs. We need evidence of how many jobs the scheme created in 2008 and 2010. I do not know why the Minister is not telling us; perhaps he will tell us tomorrow.

Notwithstanding its 279 pages, the Bill fails to get to the heart of the problem. There is little in it to encourage ordinary people to spend. While the crisis continues, the economy is going downstream interminably.

Recent figures from the ESRI savings index show that 48% of people are now saving money regularly, up 8% on the figure released in December. The reason people are saving is they are terrified of spending money. The ESRI figures show that 31% of people are not saving at all because, by the time their diminishing salaries have covered their mortgages, home heating, food, fuel, the universal social charge, the household charge, the VAT increase, the university registration fee and septic tank charge, they do not have any disposable income left. There was a decrease in grocery sales of 56% among low and middle-income families last year and a decrease of 64% in regard to clothing. How will this promote spending in an economy and make it grow? It is not possible.

The Bill makes provision to allow for the increases in the costs of petrol and diesel. If the increases are maintained, the average motorist will stand to be worse off by €1,000 per year. Since the emergency budget in late 2008, there have been five separate tax increases, including the increase in VAT, the introduction of the carbon tax and excise duty hikes. The result is a cumulative tax of 21%. This is hardly an incentive to go on a spending spree.

A reference was made to there being too much negativity. None of us wants to be negative but perhaps the Deputy should address his remarks to the 440,000 who are unemployed, the 260,000 children who are living in abject poverty and the 600,000 adults living in poverty. Does the Government want these people, totalling nearly 1 million, to jump up and down and say it is doing well? It is completely out of touch and that is the problem.

The Finance Bill's effects over the next few years will be disastrous for middle and low-income groups. The Bill will be particularly disastrous for the economy in that certain of its provisions will not encourage growth.

I do not want to be too negative or pessimistic either and I acknowledge the Government has a very difficult job. It had many choices in the budget and this Finance Bill. I am worried because successive Governments – I was part of the last two – have failed to recognise the simple mathematical fact that we cannot pay back the huge loan from the troika. I was glad to have met representatives of the troika some weeks ago to inform them it is just not possible. Any small businessman will know that. There can be no stimulus for small businesses if we are taking so much out of the economy every year. The Finance Bill gives a legal framework to the savage cuts introduced in the budget. We just cannot keep cutting.

Deputy Halligan referred to ESRI reports on people's savings. There was a report this week on people being unable to pay their credit card bills, standing charges, car loans and mortgages because they need the money for everyday living. This has a knock-on effect on shops and businesses.

We heard from Cavan chamber of commerce today. A massive Tesco building located on the outskirts of Cavan town is killing the town. This has happened in so many other towns. My town, Clonmel in Tipperary, is another example. We fail to see that the whole system has let us down. I refer to the Executive and bureaucracy. There is tunnel vision and the authorities cannot see where they are going and that the politics are negative.

Consider the issue of rates, for example. A small self-employed mechanic was in touch with me just before I entered the Chamber. His rates were increased by €1,000 and I could not believe it. Since he put down a new yard and enhanced his property as a result of the good times, his rates have been increased. He had to sell off property and machines to pay his debts last year. I know of several businesses that have cashed in their pension funds to try to stay afloat over recent years, yet they could not do so.

A business in Clonmel operating since 1958 is closing this week. Over the past three years, those concerned invested €100,000 of their savings to keep it afloat but cannot do so anymore. The system is not viable and we are going in but one direction. Unless the Valuation Office which reviews rates gets real and there is an independent assessor, this will continue to be the case. At present, one appeals to the same body that sets the rates. How one can increase a business's rates in this climate, I do not know.

In addition, we have had increases in VAT, diesel fuel and other items so people have less to spend. It is a negative aspect which means there is less turnover for businesses. I am not an expert in economics but I can tell that if there is not a mini-budget by mid-summer this year there will be some hole in the country's finances because business people will not be able to pay their taxes. That is already happening, but one cannot get blood from a stone.

The legislation governing the operation of sheriffs is outdated and should be re-examined and revised. Sheriffs are menacing people and, worse, they are charging exorbitant rates to take what people have not got. I know of a man who has been unsuccessful in business and the sheriff now wants to take his car away. However, because he did not give them the car, two individuals want €690 for that day's visit. They also wanted €690 for a visit the following week. They did not call but the man was sitting anxiously waiting for them.

That negative system is scandalous, outrageous and intimidatory. It is driving the goodwill, honesty, initiative and vitality from the self-employed sector. These rich, fat-cat sheriffs are propagating that system. It is worse than the penal days. In my area they cover Tipperary and Offaly and get exorbitant fees. It is disgraceful. While one can negotiate with the Revenue Commissioners - I have done so on behalf of others - the sheriff is non-negotiable and will not even speak to a person. He will charge his fees no matter what, adding them on. We should take those blood-thirsty hounds off the road and instead help business people who are hanging on by their fingernails. We are going nowhere, however, because we are tearing the lifeblood out of ordinary people in rural Ireland. We will not get out of this mess until we change direction.

I wish the Government well but I am disappointed that it has fallen into the system of having advisers who give the same advice as before. The Government should get rid of the advisers and get business people in to provide meaningful advice which can be acted upon. We would all support that to get our country back on track. The current system has been a total flop and a disastrous failure, which is mainly due to inertia in the public service. Public servants never worked in the private sector in their lives; they do not understand it, care less and think they are untouchable.

It is no surprise that I cannot support this Bill. If proof were needed that the cost of paying for the banking system's economic collapse has been unfairly loaded onto the backs of those who can least afford it, it is to be found in the income tax Estimates for 2011 compared to 2010, which were released by the Revenue Commissioners last week. The figures are incredible. Those earning €17,500 to €20,000 a year - which is less than €400 a week - have seen their tax bill treble in 12 months. It was argued that such people were earning too little to be taxed, but nonetheless their tax bill has trebled.

People earning €20,000 to €30,000 a year, which is €400 to €600 a week, faced a 50% tax increase last year compared to 2010. At the same time, those earning per week what the poorest earn in a year, are unaffected by reductions in tax credits and rate bands. As a group, those earning over €2 million a year will pay less this year than last. It is outrageous. We have repeatedly pointed out that wealth should be taxed. The top 5% whose wealth increased by €45 billion last year on the back of austerity, and whose overall wealth amounts to over €200 billion, should be taxed at 5% which would yield €10 billion. A tax of 10% would yield €20 billion. Why are such measures not being examined? Why has the Government targeted the most vulnerable? The scale and immorality of this injustice is beyond belief.

Having piled austerity measures on working people, the unemployed, those on welfare and children in DEIS schools, the Government has a neck to propose even more tax reliefs for those on high salaries. Under the special assignment relief, it is proposed to make 30% of the salaries of those covered tax free. The Government should hang its head in shame.

The Minister of State with responsibility for disability, Deputy Kathleen Lynch, has said that funding to maintain supports for disabled children moving from school to adult services - which even Fianna Fáil ring-fenced - will be cut. Yet people coming in for tax-free credits will also receive €5,000 in tax credits per year for their children to attend school, which is outrageous. There is no evidence that this measure will create employment beyond the 60 or 70 people who are expected to avail of the scheme.

The Minister is also proposing to allow companies claiming tax relief for spending on research and development to transfer that relief to key employees. These R&D tax exemptions amounted to €215 million in 2009. The definition of "key employee" is subjective, to say the least. The scope for cutting certain employees' tax bills is considerable. I have no doubt that there are hundreds of accountants, tax consultants and lawyers poring over these measures to assess their suitability as yet another tax loophole for the very well-heeled.

I wish to refer to the residential property reliefs on capital allowances. These reliefs cover section 23 properties which played a key role in inflating the property bubble with disastrous consequences. They also cover investments in hotels, crèches, nursing homes and private hospitals. The Minister has completely rowed back on the plan to phase out these property tax breaks proposed in the December 2010 budget. The 2011 Finance Act measures which sought to ring-fence income that could be sheltered by these allowances have been abolished by this Bill.

People are bitter and are becoming more so by the day. I meet people in the streets who say that this Government should watch its back. I attended a meeting with lone parents who are facing accumulated cuts in their income. They are angry as a result. Day after day, we see Deputies appearing in this Chamber with new dresses and other new clothes, yet there are women who cannot put food on the table. It is outrageous. They are totally out of touch with what is going on in society. It is business as usual, putting the boot into the most vulnerable and those on modest incomes, while licking the backsides of the rich. That is what is happening here.

The statement that the Finance Bill has, at its heart, the primary objective of job creation, is an insult to the half a million people on the dole. Their talents are wasted at a time when such necessary work remains to be done. Nothing in the Bill will change that situation and we can say that categorically because the legislation is more of the same. Even by the Government's own standards it is letting people down. It talks about supporting small and medium enterprises at the core, but the Government has even backtracked on that by not allowing SMEs access to promised bank loans. Some €6 billion in funds was supposed to be accessed but less than one third of those moneys will be available. Even the innovators, which the Government says it is propping up, find it difficult to access funds in the present climate.

We have a continuation of Robin Hood in reverse - taking money from the poorest in society while those at the top line their pockets. The measure to entice the so-called super rich from abroad with nice little tax-relief carrots, has exposed this con in the minds of many people. In essence, the Government is saying that a category of super high earners will have a lower effective tax rate than many people earning far less. This is somehow put out as a job creation measure, without any statistical analysis to support it, even though the scheme has already been in existence. This is a ludicrous assertion.

Two of the biggest contributors to the destruction of jobs are the disastrous austerity plans which the Government is continuing to promote and the collapse in private sector investment. How will giving foreign investors money to come in here and tax breaks mitigate against that? Nothing has been put forward to support that argument. There is no measure to say the Exchequer will be reimbursed should that strategy fail as it undoubtedly will. These tax breaks must be seen in the context of the cuts that are being foisted on the shoulders of single parents and other less well off people in society. Money is being taken out of people's pockets through VAT, the household tax and other charges, so they cannot spend it in their local shops. This is about choices.

While we expect Fine Gael to promote and back up the rich - there is nothing new in that - it is shameful for the Labour Party. A surprising fact that has emerged is the sharp increase in the number of people declaring high incomes during the worst years of the economic crisis. What is the Government's response to this? Does it take more off them? No, it lets them off for even less. The number of those earning €275,000 has increased by almost a third but they pay an effective rate of tax of 32%. If an extra 3% income tax were imposed on these high earners, up to €150 million a year could be raised. Imposing a similar rate on all those earning over €100,000 would raise an extra €540 million, which is not far short of the amount the Government expects to collect through the VAT increase.

Instead of imposing such rates, the Government has reverted to more of the same of not supporting indigenous industry but prostituting this country at the feet of multinational corporations which have not delivered any serious jobs, which funnel their profits through our books to distort export figures and which make no meaningful contributions to the economy. This policy will fail because it is more of the same.

I wish share time with Deputies Harrington, Breen and John Paul Phelan.

Despite what we heard from earlier speakers, I support and welcome the constant efforts of the Minister for Finance, the Taoiseach and all Ministers to protect the most vulnerable and to support those industries such as tourism and agriculture which have the possibility of taking this country out of the economic straitjacket in which it finds itself. There is also an onus on the Government to be fair, which has been difficult with the choices that have to be made to sort out the economic mess it was left.

I welcome the change to the universal social charge, USC, which has taken 330,000 low-income workers out if it. Last night Fianna Fáil Members said this would make a saving of only €4 or €5 a week for these workers. That is €4 or €5 the previous Fianna Fáil Government took out of their pockets last year.

Farming is one of the good news stories in the economy. I welcome the initiatives by the Minister for Finance to remove some of the obstacles to young farmers taking over family farms. These will line up seamlessly with some of the key proposals in the reform of the Common Agricultural Policy to increase supports for small farmers. It is also falls in line with giving a hope of a future in farming to those attending agricultural colleges, many of which are bursting at the seams with students.

I also welcome all jobs created in recent weeks by multinational companies, small businesses and from other efforts such as the 6,000 new jobs created in tourism by the lowering of VAT and the introduction of other tourism promotion measures last June. Today at a briefing by Ireland West Airport Knock chief executive, Joe Gilmore, and chairman, Liam Scollan, I was uplifted to hear the airport had its busiest year yet in 2011, with 715,000 passengers passing through it in contrast to many other airports which are suffering contraction. Ireland West Airport Knock provides 171 direct jobs while supporting another 1,000 jobs. The airport has the dream, as well as the potential, to get passenger figures over the million mark. It is looking for support from the Government to have a transport plan that will look ten years ahead so it can plan in a structured way to deliver on that and provide more jobs, not just in Mayo but in the north west.

All Members are aware of the focus this budget has brought on difficult decisions concerning rural schools, community employment schemes and other areas which are affecting front line services. I thank Ministers who have engaged with us to minimise these effects. I am sorry to see no Sinn Féin Members are present in the Chamber. I agree with many of the points they have made recently with regard to the difficulties and changes facing small schools in these difficult times.

However, I cannot square that with the actions of the Sinn Féin Education Minister in Northern Ireland who last Monday closed 28 post-primary schools there. The only Catholic post-primary school in Portadown, Drumcree College, will be one of those closed. A family member involved in the school informed me serious efforts were made by school representatives to meet the Education Minister but he refused to meet them. I find it difficult that Sinn Féin preaches to us down here but practices something else when in power. Of course, it will probably whip it up that the British Government decides on the moneys available for schools in the North. However, as was said earlier, Sinn Féin has choices within its education budget to limit these closures. Those schools closed down last Monday would welcome some of our Government's measures for rural schools which Sinn Féin Members are decrying.

Let no one doubt that I will continue to fight for rural schools all the way to minimise the budgetary effects on them. I was educated in a one-teacher rural school and it started me off well in life. I do not like, however, the hypocrisy I see from some on the benches opposite in this regard.

Well said. It is very true.

I welcome the opportunity to speak on the Finance Bill 2012. The country's economic problems arose because of the reckless behaviour of the previous three Governments. From 1997, Fianna Fáil and its different partners tried to go in opposite directions, which was disastrous for the country. The tax base was lowered to an unsustainable level while rising expenditure reached an equally unsustainable level. It became like two different pressures on an elastic band which eventually had to snap in the middle. The State was bankrupted and its people are now mortgaged for decades to come. Fianna Fáil has nothing else to offer except political horse-trading. There has not even been an apology or an excuse from Fianna Fáil Members except their mantra that everyone else is to blame bar them.

Previous Fianna Fáil Governments built Tower of Babel like monuments in the property sector. When the sector needed to cool its jets, the Fianna Fáil Governments put on the burners. A fundamental principle in economics is when the economy is going well, one cools it down and when it is going poorly, it needs a stimulus. Ireland is now caught in between where it can do neither.

Be that as it may, we have to face some of the most critical decisions in our nation's history of which this budget is part. These are difficult times for all of us and we have to make many hard decisions if we are to rebuild our country and again make it the place it deserves to be in which to live and work.

I have listened to some of the contributions from the Opposition benches, particularly from the left-wing Deputies who will condemn and oppose every measure.

It is reality.

I understand the political games that go on but the baby is often thrown out with the bathwater. The constant and incessant opposition to every proposal might be fine but the lack of a coherent, concrete alternative proposal that would introduce some initiative, enterprise and hope is sadly lacking.

How about taxing the wealthy?

What would Deputy Joan Collins do if she discovered she was spending 30% more than she was taking into her bank account? I doubt if she would set a fire in front of her bank, credit union or post office. Instead, she would talk to her credit providers and find a sustainable way to get out of the problem. That is what the Government is doing with this Finance Bill. We need a dose of reality because if we continue on in this way, the public will find out. Deputy Collins and her colleagues should not insult the public's intelligence or try to be populist.

I always listen to the public.

I am pleased this Finance Bill, which will implement the Government's first budget, has job creation as its main priority. Before coming to the Chamber I made use of an Internet service called EireJobs which sends messages offering jobs. In the last 12 hours 200 jobs were offered on that service, from highly paid skilled positions to operative jobs that needed very little skill. There is no mention of that. We need to work with these people.

Debate adjourned.