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Dáil Éireann díospóireacht -
Thursday, 7 Nov 2013

Vol. 820 No. 1

Finance (No. 2) Bill 2013: Second Stage (Resumed)

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

I am glad of the opportunity to speak on the Finance (No. 2) Bill. This is approximately the twenty-second Finance Bill I have spoken on in this House, probably fewer than the Leas-Cheann Comhairle. Over the years one tends to focus on the tax expenditures. The tax reliefs in this Finance Bill amount to approximately €526 million. The question arises of whether those reliefs are working in the best way for the economy and society. In our EU partner nations it is often estimated that anything from €10 billion to €13 billion in additional funding for national budgets evaporates through tax reliefs and taxes foregone.

There were some positive elements to the budget, particularly the introduction of the home renovation incentive scheme. We should have a major social housing programme for many reasons to do with the property market. In principle, section 5 is welcome. The rationale of tackling the shadow economy is behind that section. Some people still feel, however, that the measure will be a token one because the application of the VAT refund on home renovation projects will be through tax credits over two years rather than a direct grant to the homeowner under the amended section 477B(3)(b) of the Taxes Consolidation Act 1997. The most stringent criticism was made within days of the budget by the distinguished economist Mr. Colm McCarthy. I hope it gives another boost to the construction industry because we need to return to building a sustainable 20,000 to 30,000 homes per year, and all the other construction works that go on in upgrading, repairing and insulating our homes.

The start your own business scheme in section 6 is also very interesting. I wonder if it is to some extent a token measure. Over the past quarter century I have been heavily involved in helping small business start-ups on the north side of Dublin. The scheme proposed in section 6 inserts a new section 472AA into the Taxes Consolidation Act 1997. One wonders whether there will be a significant take-up of the scheme given that to qualify individuals must have been unemployed for at least 15 months. It also includes people in receipt of jobseeker's benefit and potentially those who are working part-time. It may be difficult for people to qualify for that scheme.

I welcome the living city initiative.

I spoke to our new Dublin city manager, Owen Keegan, and to the Taoiseach on the night of the budget about the state of Upper O'Connell Street. It is unacceptable that we have two major derelict sites there and that some street lighting is not working. We are within two years of the centenary commemoration of the major national event in our recent history. I urge the Minister of State to target this issue, provided he is not sent to Brussels as it is rumoured he may be or asked to campaign in the election for that. I suggest he could focus on restoring O'Connell Street to the majestic condition it was in 25 or 30 years ago.

I also welcome section 38 of the Bill which seeks to address problems in regard to this country's international reputation. Like other Deputies, I believe that the proposal in section 7, which relates to the so-called reform of tax credits for separated parents, is a sneaky and unfair way of increasing income tax to be paid by these citizens. Parents who share caring responsibilities have contacted me in large numbers to express their vehement disgust at the provision which they rightly feel is discriminatory.

The change to relief for medical insurance premiums is also a disgraceful measure. It has been noted that changes to the relief for medical insurance and to the DIRT rate will generate approximately the same amount of tax revenue as the bank and pension levies combined. The health budget has been cut drastically and the fanciful figure of €666 million in savings required was presented by the Minister for Health. At the same time, citizens already struggling to keep paying medical insurance premiums will be badly hit.

The increases in the rate of DIRT and the exit tax on life insurance policies, in sections 23 and 30, further discriminate against older citizens. With these caveats, I agree we need to apply strict cost benefit criteria to all tax reliefs.

I will confine my contribution to the areas within the Finance Bill and our recent budget relating to the issue of fraud. I compliment the Department of Finance on the area of the Bill dealing with policing and collecting VAT and the anti VAT fraud measures included. I welcome that, as should all Members. VAT fraud is described in the booklet from the Department as a massive problem. I agree. It is a major problem that has never been tackled as it should have been, particularly during the days when we were told the country was rich. If it was rich, we should have collected the moneys due but that did not happen. I welcome the measures in the Bill relating to VAT. They are the good news.

I want to move on to the issues of tax evasion and white collar crime. Unfortunately, these issues are not tackled in the Bill in the way we would like. This is our third budget and I understand that we are in a difficult position. We have never been bankrupt before. Even when the British were here, they did not leave us bankrupt. It was some of our own who did that to us. We have a responsibility to deal with the significant issues of white collar crime and corporate fraud. These moneys are due in tax to the State. The law is the law and we would not be in our current difficulties if all of the due taxes, VAT, etc., were paid to the State. With those moneys we could tackle the likes of problems referred to by Deputy Broughan, such as social housing. We would have little difficulty in presenting such a programme if we could recoup the moneys owed to the State due to white collar and corporate fraud.

Unfortunately, in this jurisdiction we do not have exact figures in regard to white collar or corporate fraud. Since the foundation of the State we have never had these figures. We must look to the experience of our neighbouring jurisdiction, the United Kingdom, which has a sophisticated fraud authority that can provide figures, the most up to date figures being those for 2011. We are not as articulate about fiddling as the British white collar sector or corporate bodies are, perhaps. I have believed for many years that we in this country enjoy a bit of fraud. We should take steps to put a stop to fraud and hopefully some measures will be included in the next budget to tackle this problem and resolve it.

I will return to the issue of the extent of the problem of white collar or corporate fraud and the 2011 figures from the United Kingdom. I noted that when the budget was announced here, some Members got a little over excited about social welfare fraud and the measures proposed in to deal with it. I have no difficulty in that regard, because fraud is fraud. Those measures should be welcomed by all of us. We can chase and recover every cent that is owed as a result of social welfare fraud and put those moneys into the State coffers, but what is owed in that area pales into insignificance when compared with the level of white collar and corporate evasion in this country. The 2011 comparison figures from the United Kingdom indicate the combined figure, including VAT fraud, is in the region of €4 billion.

We would welcome the recovery of even 50% of that, although I would support going for 100%. We must step up and deal with this issue in the next budget. We will require additional personnel and better co-operation between An Garda Síochána and Revenue. This is the model the British use and it has proved successful. It is all very well for some Members and several members of the media to get excited about social welfare fraud, but they seldom write about or raise the issue of the €4 billion that is owed by guys in fancy suits and fast cars. They manage to get away scot free. They certainly got away scot free during the Celtic tiger period.

I do not present the figure of €4 billion as totally accurate, as it is a figure from the fraud authority in Britain. We could argue all day as to whether we are better at fraud than the British. I think we are probably better at fraud, but we must do something about it or we will not be able to deal with the issues that need attention, such as social housing. We should not have people sleeping in doorways while there is €4 billion owed to the State. This figure is the figure for just one year, so we must tackle the issue. I have supported every budget and I look forward to supporting budget 2015 and whatever initiatives the Department of Finance proposes to take to recoup these moneys owed to the State.

I thank the Minister, the Minister of State, Deputy Brian Hayes, and the backroom people in the Civil Service who facilitated the Bill being brought so quickly to the House. Often this work is not recognised. I recognise the diligent work done in bringing the Bill here so quickly.

Often the Chamber is quite empty when Deputies are speaking, but I know most Deputies use the televisions in their offices to listen in, as I did yesterday. I listened to Deputy Richard Boyd Barrett's call for us to default on the interest payable on the national debt. I was a little shocked, but I suppose I should not have been; I certainly was not surprised. Since he came into the House the Deputy has been more interested in protest than people. We have worked extremely hard to right the finances of the country. The debt about which the Deputy spoke is approximately €200 billion, of which one fifth, or €40 billion, is tied to the banking crisis. This is a huge amount of money and I am as angry as anyone else about it. Anglo Irish Bank has a role in this regard and I hope it will be dealt with in the manner it should be in due course.

The Deputy is provoking the Speaker of the House, I suspect.

For the first time he is muted.

The Chair has total composure.

I read the transcripts of the Anglo tapes published by the Sunday Independent. Yesterday I listened to Deputy Pearse Doherty state he had had similar tapes in his possession for more than three weeks. It reminds me of a military tactic where when an army is in retreat, it puts up a smokescreen. That is very much what we have seen this week. We have seen the tapes being held for three weeks by what is called a democratic party. They were not handed over to the Garda or the Governor of the Central Bank but held as a smokescreen knowing what was coming down the line in documentaries on RTE and other stations.

The size of the rest of the debt is approximately €160 billion. I know the Acting Chairman is biting his tongue to correct me on the figures, but we will work on rough figures.

The Deputy is right.

The €160 billion has been spent on public services, social protection payments, capital investment projects and salaries. Defaulting on the €9 billion interest payment per year, as called for by Deputy Richard Boyd Barrett, would destroy many sectors of society and be a highly irresponsible policy. A wing of this House is more interested in protest than solutions. We listen to it day in and day out from the height of the back benches. Such a default would result in the loss of tens of thousands of jobs in the economy reliant on foreign direct investment, but this may suit those more interested in protest than the people. It would block Irish companies and semi-State bodies from borrowing for investment in future job creation, which would mean higher unemployment figures. Tax revenues would collapse and the State would not be able to provide a safety net as no one would lend to us on reasonable terms.

In the past three years we have slowly closed the deficit, while protecting public spending and the budget will result in a primary surplus. That is the target at which we are aiming and moving towards. This has caused grave difficulties for citizens and the Government. However, through hard work and diligence and the pain inflicted on Ireland, we are slowly coming through. Default, as Deputy Richard Boyd Barrett wants us to do, would destroy the very same services which he articulates in passionate terms that he wishes to protect. Are parties represented in the House more interested in protest than in solutions? The Government must take some credit for the renegotiation of our debt rates and promissory notes. We always hear that this would have been obtained anyway, but it would not; it was delivered through hard work and diplomacy.

Deputy Mary Lou McDonald stated she did not want to hear Labour Party or Government backbenchers crowing. I do not come to the House to crow. Deputy Timmy Dooley, the face of what happened to the country, sits there and laughs. I celebrate every additional job created in my community. I celebrate every child being taught in a classroom rather than in a prefab. During the boom years children were in prefabs 12 or 14 years old. The Government is building classrooms, which should be remembered. Deputy Timmy Dooley should take his giggle and go. Fianna Fáil promised us constructive opposition, but this promise faded very quickly with the submission made on the budget. This is not surprising, given that Deputies Micheál Martin, Willie O'Dea and Billy Kelleher put the country in hock, caused the bailout and brought the troika here; therefore, they should cost their budget submission. Out goes responsible opposition and in comes a policy of spend and bust again, one which Fianna Fáil has given to the country for decades.

I thank the Minister for Finance, Deputy Michael Noonan, for his remarks that he will consider amendments on Committee Stage to the proposed single parent child carer credit. All of the calls to my office on this issue have been from fathers, many of whom are responsible and pay maintenance week in and week out. I ask the Minister to consider a range of proposals to alleviate and improve the measure. If the partnership tax relief can be phased out over four years, there is no reason the same could not be done in this regard. Many maintenance costs are established through court proceedings. I accept the Minister's commitment to examine this issue in a favourable manner.

The retention of the 9% VAT rate for the tourism and hospitality industry is very welcome. Many people in my constituency have secured jobs in restaurants, hotels and related tourism activities. Many high-tech companies such as Facebook and Google have expanded in recent years in my constituency. Many of those who have become unemployed are unable to take up these positions.

I give a guarded welcome to the abolition of the travel tax and look forward to seeing Ryanair deliver the promised 1 million extra visitors. I ask the Minister to examine this issue next year because if the extra visitors are not delivered, we should consider reintroducing the tax. It should be conditional on the delivery of the extra visitors. The tourism industry has delivered jobs in restaurants and hotels and we have seen economic growth. If this measure works, it will be very welcome, but if it does not work and does not deliver the extra visitors, there should be no problem with reintroducing the tax. This should be put down as a benchmark.

I urge the Minister not to change the tax filing date as it will be very hard for people in small and medium enterprises to accurately forecast after six or eight months their end of year tax bill. The Department of Finance and the Revenue Commissioners have shown their ability in recent years to accurately forecast tax returns. There is always a risk that no matter what the filing date is that the outturn will be different.

Deputy Penrose raised with me that this is also quite a concern in rural Ireland, as it certainly is in urban Ireland. I ask the Minister to look at this issue. Self-employed people could be asked to submit through Revenue online an estimate of their end-of-year return to help budget forecasting but no interest or penalties should apply if it proves to be wrong. This would allow us to maintain the current arrangement and give the Department some needed data. We have moved to help SMEs with cash flow by adjusting the VAT threshold so it would be bizarre to do the opposite for the self-employed by moving the file and pay date.

I welcome the home renovation incentive. I recall my colleague, Deputy Derek Nolan, raising this issue last year. He believed we could stimulate employment in this area, particularly as there are so many people from the building industry who are unemployed. This will help to tackle the black market in the building trade, reward compliant builders, encourage people to spend and help growing families who may need more space in their homes. The move is very welcome.

The extension of the Living City initiative to Dublin and to all properties built before 1915 has the potential to transform our Georgian core and urban villages. I hope that approval can be sought from the EU under state aid rules without delay, given we need to move on this very quickly. In my own constituency, there is a glut of pre-1963 houses, which are mostly Georgian or Edwardian. This initiative will help to return them to being family units because older houses are extremely expensive to renovate. Having these homes come onto the market will help to build up a strong community in areas like Rathmines, Rathgar and Ranelagh, where families are moving back in. I will conclude on that point. I thank the Minister.

I wish to share time with Deputy Dooley.

I welcome the opportunity to speak. To many people, the Finance Bill seems unfair. It provides no clear vision and no sustainable solutions to the major challenges that Ireland faces into the future. There are a number of changes included in the budget that will have a significant effect on people's lives, including the increase in DIRT tax, the reduction of the tax credit on medical insurance and the abolition of the single-parent tax credit. People who saved either by putting money aside for their pension or on deposit in a bank are being hit by these punitive taxes. While I welcome a certain number of measures which are designed to help the construction sector, there is a complete lack of action on the spiralling mortgage crisis.

The Minister talked about the €500 million jobs package and, certainly, some of the measures in the jobs package are very welcome. However, we are now in a situation where there is a two-tier Ireland. Dublin seems to be moving on and expanding, with a lot of good news in the Dublin area. However, in rural Ireland there are major issues in small towns that are dying on their feet, with retailers under pressure and small businesspeople unable to get funding, while the banks treat them as second class citizens. Not alone are the banks not giving money to develop or expand, they are actually withdrawing or reducing overdrafts. I have come across many people in my own constituency who have had their overdrafts substantially reduced by the banks, which is making it very difficult for businesses to survive.

This is an area that needs serious reflection. It is important to recognise that small businesspeople and retailers provide huge numbers of jobs up and down the country, but, certainly in the smaller towns, there is a major difficulty at present. As I said, retailers are under pressure, they are letting go employees and closing down their shops. If one walks the streets in any of our urban centres at present, one will find anything up to 15 or 20 shops closed down, with the subsequent loss of jobs.

The extension of the pension levy into 2015 is an about-turn by the Government given it had said it would end this year. The levy is taking €2.25 billion from pension funds, many of which are already in deficit. It is important to ensure that the pension system is secure, fair and straightforward. Given the manner in which benefits for the elderly have been systematically eroded by the Government, there has never been a greater need for such a safety net. The Minister for Finance claimed that extending the levy would make provision for potential State liabilities which may emerge for pre-existing or future pension fund difficulties. This underlines the unfairness of the levy as it will also hit defined contribution pension schemes even though they cannot benefit.

The medical insurance tax relief is an area the Minister for Finance should revisit. The Government said this change would affect gold-plated policies but we are all aware that it will impact on approximately 90% of all private health insurance products currently on the market. Customers will end up paying more for their health insurance but more important, and of greater concern, is the fact many people are now being driven out of the private health insurance market despite the Government's stated intention of creating a system of universal health insurance. While we do not know when that will happen, as the Minister is aware, many people are leaving the private health insurance market at present because they just cannot afford to pay. This will add to the burden on hospitals in the public sector, which, as we know, are already overburdened, with people waiting a long time for assessments and operations. To have an extra burden placed on them through people leaving the private health market and going into the public system will only add to the problem.

Of all the issues in the budget, the change to the one-parent tax credit is the one that has caused a major storm. I have had a huge number of representations from people affected by this change. The manner of the change will discriminate against fathers in particular because the new single-parent tax credit will only be available to the recipient of child benefit. I welcome the fact the Minister for Finance said in his opening speech he would revisit the situation. I received a letter from a constituent which I have sent on to the Minister. It asks a number of questions, and states:

Before the credit can be split, it must first be designated. To whom would the Minister propose to designate it? If it goes in the first instance to the primary carer, then we are firmly looking at indirect gender discrimination and I trust that the State would not willingly enact such a measure.

A lot of concern is being expressed about this change. As I said, I welcome the fact the Minister will re-look at this because it seems to cause major problems. Fathers in particular have been writing to me on a large scale to express serious concern. I hope the Minister will see fit to change this because it will be discriminatory and will drive people on lower incomes into further poverty. It is generally accepted from the pundits out in the real world that the proposal will hit very hard on separated and divorced fathers in particular.

The retention of the 9% VAT rate is welcome. The restaurant owners and hoteliers certainly did a good job of lobbying and they were successful. We hear that up to 10,000 jobs have been created in this area. If it is so successful in creating such a significant number of jobs, why not expand it into other areas?

The simple answer is cost.

Those involved in construction were seeking to have it expanded into their industry. This is a win-win situation.

Before the debate on this Bill concludes, I ask the Minister of State to re-examine the proposal from the motor industry in respect of a swappage scheme. Again, this proposal would have presented the Government with a win-win scenario. Obviously, it would also have been a win-win situation for the motor industry. It would have increased the level of car sales and given rise to job creation. In addition, it would have brought in huge amounts of money to the Exchequer in the form of excise, VAT and other forms of taxation. The Minister of State should consider the proposal to which I refer. I read a newspaper report yesterday in which the chairman and managing director of Ford Ireland, Mr. Eddie Murphy, stated that he is quite confident that there will be a swappage scheme in 2015. Why not launch the scheme in 2014 and give the motor industry a break in order that jobs might be created and money brought into the Exchequer? I ask the Minister of State to give consideration to this matter.

I welcome the home improvement tax credit, which will certainly help the building industry. However, one in four of those people currently on the live register is a former construction worker. A significant proportion of these individuals do not require retraining and if the building industry received a boost, then we would certainly see an increase in the number of people going to work. A couple of weeks ago I raised with the Minister of State the point that 20,000 couples get married each year in Ireland. If 10,000 of them bought or built houses, this would provide a major boost to the building industry. The problem we face at present is that the banks will not give adequate mortgages to couples that have reasonable incomes. We need to return to the 80-20 mortgage arrangement that existed prior to the boom, whereby the banks supplied 80% of the finance and those buying or building houses were obliged to supply the other 20%. When we moved to a position where people could obtain 100% plus mortgages, major problems arose. The banks should be encouraged to re-examine the position with regard to mortgage lending in order that people might have the opportunity to buy or build their own homes. If this happens, there would be substantial improvement in the position of the building industry and an increase in job creation.

The budget is generally unfair but there are some good aspects to it. The two issues which must be reconsidered are those which relate to the car swappage scheme proposed by the motor industry and the one-parent tax credit. I welcome the fact that the Minister for Finance has already committed to re-examining the position with regard to the later.

I welcome the opportunity to contribute to the debate. I will take up where my colleague, Deputy Browne, has just left off in respect of the one-parent tax credit. If the Acting Chairman will allow me to do so, I propose to read into the record of the House an e-mail I received from a constituent whom I will not identify. The e-mail in question sets the tone with regard to why we really need to re-examine the position on this matter. It states:

It is with deep regret that I learned about the proposed Single Person Child Carer Tax Credit in the most recent Budget - it effectively means that I now face the reality of having to reduce the contact time I am currently granted with my two children in order to save this Govt ... a paltry €18 million.

Should it be passed I will lose approximately €40 per week in a tax credit, or €160 per month. I currently pay over a third of my salary in maintenance towards my kids - and this is right & proper; I am a responsible parent, whose first thought is ALWAYS what is best for my children. I continue to pay maintenance even when I have my children for a weeks holiday over each of the holidays and every second weekend. I try to feed them with healthy foods but consequently cannot afford cinema trips, fun activities at weekends, etc.

I live 40 miles away from my kids, do all the driving out to collect and driving out to drop them off.

I have to pay rent on a place that is comfortable enough to act as a second home to my two kids, and all the utility bills that accompany such a home.

My home is in negative equity. I am in considerable arrears on my mortgage. I also continue to pay off debts accrued during the course of the marriage.

My weekly expenditure averages at just under €500, which my weekly wage does not currently cover. The withdrawal of the current One Parent Family Tax Credit effectively means an 8% reduction in my weekly income...

... something has to go in order to accommodate this loss; the only thing I can cut is petrol money, which will inevitably mean I will have to reduce the amount of time I can spend with my children.

He proceeds to refer to the necessity for us to do something.

The e-mail I have just read into the record clearly highlights the desperate straits in which people find themselves. There are individuals who, through no fault of their own, find themselves separated and some of them never married in the first instance. The additional costs associated with managing a second home are burdensome. It was partly this fact that led to the introduction of the relevant tax credit in the first instance. In the context of budgets introduced by the Government, this move has been identified by the ESRI as being particularly regressive. Prior to the most recent general election the Labour Party promised that there would not be any cuts to social welfare rates and Fine Gael promised that there would not be any tax increases in terms of a broadening of the bands or the rate at which people pay. This has forced the Government into taking an awful lot form a small cohort of individuals. In my view, this is deeply unfair and it is making life intolerable for those affected. I really hope the Minister of State will be able to bring his good offices to bear in respect of this matter.

Pensions have again been targeted in the budget. When the pension levy was first identified as a method of stimulating the economy, it was stated that it would be in place for a relatively short period until this year. However, it is now being extended for a year and a little kicker has been included, namely, that there will be a reduced pension levy into the future. The levy currently stands at 7.7%, which is relatively small in real terms but it will of course be escalated as the Government needs to generate additional revenue. It seems that the Government will be returning to pensions time and again. Many pension plans and funds are experiencing significant funding difficulties at present and this is adding further to their woes. The long-term impact will be to discourage people from saving. We try to encourage people to put money aside in order that they might invest in pension funds and thereby save for a rainy day. People are living longer and pensions are an important part of their managing their existence beyond the end of their working lives. We are now in the process of discouraging them from saving and that is a matter to which consideration is going to have to be given in due course. People save money, they pay into their pensions and they expect to be able to deal with and pay nursing homes, live their lives, etc.

Another matter about which I am deeply concerned is the statement made by the Minister for Finance on budget day to the effect that medical insurance, particularly gold-plated schemes, would attract an additional charge or tax. There is nothing gold-plated about the policies of the people upon whom the provision in this regard is going to impact. When I realised the amount of money the Minister intended to raise from the move he is making in this regard, it became clear to me that it would affect a much wider group than initially appeared to be the case. This will hit families in a particularly hard way and it will be a deciding factor for some in the context of whether to retain their health insurance. Fine Gael's policy in this area is to create a system of universal health insurance but this measure will drive people away from health insurance. That is regrettable.

I always listen with interest to Deputy Kevin Humphreys, who offers the odd nugget but, unfortunately, most of the time one is obliged to search for it. The Deputy referred to all the classrooms which have been opened and the efforts the Labour Party is making in this regard. Earlier this week the Chairman of the Joint Committee on Finance, Public Expenditure and Reform - I suppose in an effort to beat the Tánaiste onto the front page of the Sunday Independent - informed us when he appeared on "Morning Ireland" that he was in the process of writing to the Chairman of the Revenue Commissioners. The object of the exercise was to bring her in for a show trial, which defies logic. This matter is fairly straightforward. The Chairman of the Revenue Commissioners is implementing Government policy and she is doing so in line with legislation. However, we still had the spectacle of the Chairman of the joint committee taking to the airwaves. The matter will play out today at a meeting of the committee and everyone will get through it.

I am a member of the Joint Committee on Finance, Public Expenditure and Reform and some time ago I asked the Chairman to bring before it the chief executives of the private health insurance companies in order that members might discuss with them their views on what will be the implications of the changes announced in the budget. I received a response which indicated that the matter would be addressed in due course. However, that has not proven to be the case. These are the kind of matters on which we must focus rather than the mock battle between Labour and Fine Gael in the context of who is going to take responsibility for opening the next door.

It is nauseating that it has come to that.

The changes in DIRT tax announced in the budget will discourage people who are putting aside money to educate their children or providing for the eventuality that they may experience ill health or unemployment for a period. Savings will be subject to a DIRT tax of 41%, and an additional 4% PRSI levy will be applied to unearned income. The cumulative effect of these measures will be to discourage people from saving, which is regrettable. While I accept that in the current economic climate it is necessary to discourage people from saving excessively, we must not return to circumstances in which people do not save anything. As the Minister of State will be aware, a previous Fianna Fáil-led Government introduced helpful measures during better times to encourage people to put a little money aside. I will have serious concerns if the Government goes further down the slippery slope of discouraging saving.

The retention of the 9% VAT rate for certain sectors has been the subject of some positive comment. While I also welcome this decision, I fail to understand the reason this measure could not have been funded through moneys collected last year when the Government decided to take money from private pension pots. The reasons for doing so was to fund a reduction in the air travel tax and the VAT rate applicable in the tourism sector. It did not use this money to fund the reduction in the travel tax, however. I do not know where it has gone. Furthermore, the Government had decided to reduce the travel tax for only six months this year. A pot of money taken from private pension funds is missing, as it was not used for the purpose the Government indicated. I do not believe the Government has continued to invest the money in the manner that was expected.

Debate adjourned.
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