Dáil Éireann Debate, Thursday - 16 December 2010
185 Deputy Joan Burton asked the Minister for Finance if measures to combat fuel poverty have been examined and are foreseen in the context of the proposal set out in the national recovery plan to double the rate of the carbon tax to €30 per tonne; and if he will make a statement on the matter. [48067/10]
Amharc ar fhreagraThe proposal over the period of the National Recovery Plan to double the price of carbon from €15 to €30 per tonne underlines the commitment to actions to reduce emissions and mitigate climate change. It was decided not to increase the carbon tax rate in 2011 because of other tax increases faced by householders. The carbon tax will be increased on a phased basis in 2012 and 2014. The Government has been, and remains, fully committed to protecting vulnerable households from energy poverty. The Minister for Communications, Energy and Natural Resources is working closely with the Ministers for Social Protection and Environment, Heritage and Local Government, to deliver a fully cohesive Government response to the challenges of addressing energy affordability in Ireland through a combination of institutional supports, investment in improving the energy efficiency of housing stock and the wide availability of advice on energy efficiency. I understand the new Strategy will be brought to Government in the coming weeks.
The affordable energy strategy will be the framework for building upon the many measures already in place to protect households at risk from the effects of energy poverty. These measures include social welfare supports such as the Fuel Allowance and the Household Benefits package, as well as thermal efficiency-based measures such as the Warmer Homes Scheme (WHS), which provide significant energy efficiency improvements in low-income homes. The number of homes that were upgraded under the WHS in 2008 were 5,343, 16,240 in 2009 and 22,949 to date in 2010.
186 Deputy Joan Burton asked the Minister for Finance the preparatory work undertaken to date by him on the implementation of the site value tax as foreseen in both the programme for Government and the national recovery plan; and if he will make a statement on the matter. [48068/10]
Amharc ar fhreagraAs the Deputy is aware, the National Recovery Plan included a site value tax which will be introduced with a fixed household charge of €100 per annum in 2012, with a value-based addition being introduced in 2013. Initial consultation on the implications of a recurrent annual tax on property has taken place with relevant stakeholders. Work is currently under way in preparation for relevant legislation to be published in Finance Bill 2011.
187 Deputy Joan Burton asked the Minister for Finance the rationale for eliminating the property based tax incentives over four years, as envisaged in the national recovery plan, as opposed to eliminating them in 2011; and if he will make a statement on the matter. [48069/10]
Amharc ar fhreagraIn the Joint Programme for Government we committed to end unnecessary tax reliefs. The National Recovery Plan sets out the measures by which we will achieve the phased abolition of the property-based "legacy" tax reliefs over the period of the Plan. The Government has sought to adopt a pragmatic and balanced approach and provide for an orderly winding down of these schemes to reduce and eliminate the remaining cost to the Exchequer.
In the Budget I announced measures targeted at passive investors which will restrict the carry forward of capital allowances and limit Section 23 relief to income from the individual Section 23 property.
In addition a "guillotine" provision will ensure that all unused capital allowances after 2014 and Section 23 reliefs are lost. This provision will effectively terminate all property-based reliefs in 2014.
An Impact Assessment will be carried out to identify any significantly anomalous and unfair effects of the proposed changes in advance of the 2014 guillotine.
191 Deputy Joan Burton asked the Minister for Finance his views on the distributional impact of the 2011 budget; the likely distributional impact of the national recovery plan; and if he will make a statement on the matter. [48073/10]
Amharc ar fhreagraI am advised by the Revenue Commissioners of the distribution effects on income earners as set out in the table below. The table includes the distributional effect on income earners on a pre and post Budget 2011 basis and the corresponding distribution of the impact of the income tax changes proposed in the National Recovery Plan 2011-2014 in terms of projected 2011 incomes. A distribution in terms of projected 2014 incomes is not available. The figures are estimates from the Revenue tax-forecasting model using actual data for the year 2008, adjusted as necessary to take account of the most recent data available for income and employment trends in the interim. They are, therefore, provisional and likely to be revised.
|
Exempt |
Standard Rate* (incl. those whose liability at higher rate is fully offset by credits) |
Higher Rate liability not fully offset by credits |
Total number of cases |
||||
|
Number of cases |
As % of all cases |
Number of cases |
As % of all cases |
Number of cases |
As % of all cases |
||
|
2010 |
982,900 |
44.3% |
925,500 |
41.7% |
311,900 |
14.0% |
2,220,300 |
|
2011 on a pre-Budget basis |
975,600 |
43.9% |
930,400 |
41.8% |
318,800 |
14.3% |
2,224,800 |
|
2011 on a post-Budget basis |
843,400 |
37.9% |
978,500 |
44.0% |
402,900 |
18.1% |
2,224,800 |
|
National Recovery Plan** |
799,200 |
35.9% |
956,200 |
43.0% |
469,400 |
21.1% |
2,224,800 |
*Includes those benefiting from the system of marginal relief taxation.
**In terms of projected 2011 incomes.
Numbers are rounded to the nearest 100.
A married couple who has elected or has been deemed to have elected for joint assessment is counted as one tax unit.
As set out in the National Recovery Plan 2011-2014, it is proposed to reduce the level of credits and bands by 16.5% beginning with a 10% reduction as announced in Budget 2011.
It is estimated that the measures introduced in Budget 2011 will reduce the numbers of income earners exempt from Income Tax to 38% in 2011. The numbers with a liability at 41% will increase to 18% in 2011. The estimates for 2014, assuming a total reduction of 16.5% in credits and bands, indicate that about 36% of income earners will be exempt from Income Tax and about 21% will have a liability at 41%.
These changes are necessary in the context of the National Recovery Plan 2011-2014 to rebalance the income tax system which is unsustainable and fails to provide the adequate yield.
